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IN BRIEF

Simon wins at cards

Bank-issued mall gift cards are not subject to state consumer protection laws, a federal judge ruled in August. The ruling is a victory for Simon Property Group and other mall owners that sell these cards, observers say. Simon sued New Hampshire, arguing that its Simon Visa Giftcard is not subject to a state law prohibiting expiration dates and service charges and similar fees on gift certificates. Simon insisted that because the cards are bank-issued they fall under federal laws governing interstate commerce. U.S. District Judge Steven McAuliffe agreed. “If there are to be any restrictions on fees associated with the gift cards, or limitations imposed on expiration dates, they must come either from Congress or the federal agencies empowered by Congress to oversee national banks and federal savings associations,” McAuliffe wrote.

Ivanhoe Cambridge ups China ante

Montréal-based Ivanhoe Cambridge is expanding its presence in China by linking up with an Asia-based investment firm to offer development, leasing, management and investment expertise to mall owners and investors there. The venture, called The C2 Group, will be 50-50 owned with the Chia Tai Group, part of the Thailand-based Charoen Pokphand Group. C2 will be headed by Robert F. Welanetz, SCSM, CEO of Shanghai Kinghill, itself a subsidiary of Chia Tai. Ultimately, Ivanhoe will invest in real estate in China, said Hélène-L. Brault, Ivanhoe’s communications director. “In China our initial goal is to put our experience in shopping center management [and] development to work for the benefit of local and foreign owners,” she said. “Then, as our relationships build and opportunities arise, we intend to acquire interest in various properties.”

Venezuela mall first to kick butts

Grupo Sambil, owner of the six Sambil malls, became the first shopping center operator in Venezuela to ban smoking in all its malls. The regulation was set July 1, to coincide with the celebration of Children’s Month. The company estimates that 10 percent of the shoppers at its six malls smoke, but executives say they do not expect the ban to hurt sales. Grupo Sambil launched an advertising campaign about the negative effects of the habit on smokers and nonsmokers alike. Grupo Sambil also started work on expanding Sambil Margarita, a five-year-old mall in Isla Margarita. The 108,000-square-foot expansion will bring the mall to a total 645,700 square feet of leasing area. The new space is fully leased with 42 tenants, including Nike, Nine West and Sony Store.

Federal retools Galaxy building

Federal Realty Investment Trust is nearing completion of its redevelopment of Hollywood, Calif.’s Galaxy building. Federal bought the building, located near the Hollywood & Highland development on Hollywood Boulevard, with partner CIM Group about seven years ago. After investing some $12 million in the property and bringing in new anchor tenants L.A. Fitness, Longs Drugs and, most recently, DSW, says president and CEO Donald Wood, the firm expects to achieve a double-digit return.

CBL’s post-Parisian anchor shuffle

Belk’s $285 million purchase of the Parisian department store chain is an opportunity for landlord CBL & Associates Properties, one of Parisian’s major mall partners, to reconfigure anchor space, executives said on a second-quarter conference call. Chattanooga, Tenn.-based CBL has seven Parisian stores, accounting for 929,000 square feet, in its portfolio. Of that, CBL owns 647,000 square feet, and Parisian owns the rest, said Stephen D. Lebovitz, CBL’s president. Belk plans to convert all the Parisian stores to the Belk banner by the third quarter of 2007. Belk will control overlapping stores in three CBL malls once the deal is completed in the third quarter of this year, Lebovitz said. “It’s an opportunity for us to bring in new retailers and enhance those properties,” he said. Parisian’s 38 stores total 4.6 million square feet in nine Southeastern and Midwestern states. Parisian generated some $723 million in revenue last year. Belk acquired the McRae’s, Proffitt’s and Saks businesses in July 2005.

Sky-high sales

Pittsburgh International is the top performing North American airport when it comes to sales per passenger, according to a survey conducted by trade journal Armbrust Aviation. The airport’s stores, clustered in what England-based operator BAA calls the AirMall, bring in $12.27 per departing passenger. Second place is New York City’s John F. Kennedy International, which is home to high-end shops such as Hermès and Ferragamo and averages $9.62 per departing passenger.

Other sales-friendly airports include: San Francisco International ($9.16); Newark (N.J.) Liberty International ($9.05); Calgary International, Calgary, Alberta, Canada ($8.98); and Honolulu International ($8.81).

Bethesda Row gets bigger

Federal Realty Investment Trust is expanding its 500,000-square-foot Bethesda Row project, outside Washington, D.C., with new retail and residential space. Festival Street, as the 1.7-acre addition will be called, is to open in the spring of 2008 with 43,000 square feet of retail and 180 apartments. New dining concepts from local restaurateurs will anchor the Main Street-style development, and among the new retailers is luxury apothecary and spa chain Blue Mercury and custom apparel maker J. McLaughlin. Federal redeveloped a collection of former industrial buildings into Bethesda Row 10 years ago.

Retail thrives on U.S. border

The illegal immigration controversy along the U.S.-Mexico border has not hurt sales at CBL & Associates Properties’ malls in the region, said Stephen D. Lebovitz, the firm’s president, on a second-quarter earnings call. Sales at Mall del Norte, in Laredo, Texas, are up 6 percent, while business at Sunrise Mall, Brownsville, Texas, has increased 5 percent, he said. Meanwhile, occupancy at Plaza del Sol, in Rio, Texas, is the highest it has ever been, at 97 percent, and the recently opened Imperial Valley, El Centro, Calif., is posting strong sales. “Laredo has had a lot of problems across the border,” said Lebovitz, “but it hasn’t hurt that mall at all.”

SoDo green-lighted in Orlando

North American Properties and Kimco Realty Trust subsidiary Kimco Developers plan to transform a block of former industrial buildings in Orlando, Fla., into a 700,000-square-foot, mixed-use project. The project, which will be called SoDo (an abbreviation for South of Downtown), is to contain 400,000 square feet of ground-level retail space topped by 300 luxury residential units and 54,000 square feet of office space. Construction is set to begin later this year for a fall 2008 completion.

Latin nabe gets mixed-use center

Primestor Development is building the 241,000-square-foot La Alameda Regional Shopping Center, a mixed-use development in Walnut Park, Calif., that will contain 233,000 square feet of retail and 18,000 square feet of office space. The $64.4 million project, which is slated to open in the fall of next year, provides such tenants as Office Depot and Chuck E. Cheese a rare opportunity to open in one of inner-city Los Angeles’ strongest Hispanic trade areas, the developer says. The County of Los Angeles is a partner in the project.

Building costs rise in Florida

Construction costs are so high in Florida that even Simon Property Group, with its favorable economies of scale, is feeling the heat, executives said on the firm’s second-quarter earnings call. “The market has run away from us. This is the worst scenario we’ve ever faced,” said David E. Simon, CEO of the Indianapolis-based REIT, about the firm’s $213 million development in Bonita Springs on the Florida’s west coast. High demand and the impact of hurricanes past drove costs through the roof at the firm’s 1.2 million-square-foot, mixed-use Coconut Point Town Center, which is on track to have all stores open by December. From a year ago, construction costs — including raw materials and wages — have increased between 8 and 10 percent in Florida and along the Alabama and Mississippi coasts, according to construction planning firm Davis Langdon. Fortunately for Simon, its tenants are holding up under cost pressures that might cause some chains to postpone opening. “We’re under the gun to get stores open, but no tenant has backed out of a deal,” Simon said. COO Richard Sokolov credited Simon’s internal tenant credit review team with helping the landlord assemble a group of retailers financially strong enough to withstand the rising costs. Coconut Point tenants include Dillard’s, Barnes & Noble and a Muvico Cineplex.

Arenas anchor towns

Arena developer and manager Global Entertainment Corp. will open two new venues on the West Coast next month. Santa Ana Star Center, a $47 million, 8,000-seat arena for New Mexico Scorpions hockey games, concerts, rodeos and other events, is slated to open in Rio Rancho, N.M. Officials of the growing city say they hope the arena, which is projected to draw 600,000 visitors annually, will help establish a downtown district. In Phoenix, Global Entertainment is completing the Prescott Valley Convention & Events Center, a $38 million, 6,400-seat arena that will anchor a 700-acre master-planned community containing about 500,000 square feet of retail and entertainment space. The Arizona Sundogs hockey team will call the Phoenix arena home.

Lifestyle center inspired by Italy

The Palladio at Broadstone, an open-air lifestyle center named after Renaissance architect Andrea Palladio and featuring his trademark arched windows, loggias and porticos, is scheduled to open in Folsom, Calif., in the fall of 2008. Residential developer Elliott Homes hired General Growth Properties to develop the 770,000-square-foot project. The center is the retail portion of Elliott’s 2,000-acre, master-planned Broadstone community.

Regency loves Trader Joe’s

Trader Joe’s has a new fan: landlord Regency Centers Corp. “They’re a perfect fit for our centers,” said Mary Lou Fiala, Regency’s president and COO, on a second-quarter earnings call. “We have a handful of stores in our portfolio, and they’re earning in excess of $30 million [yearly] and more than $3,000 per square foot.” Regency is welcoming two new Trader Joe’s stores to its portfolio in coming months — including North Carolina’s first, a unit at Shoppes of Kildaire, in Raleigh. Fiala says that store was a Winn-Dixie whose leasehold Regency acquired at a bankruptcy auction for $1.

The Gateway blitzes senses

Is South Gate, Calif., trying to channel Times Square? Perhaps, with a multimedia showcase as part of The Gateway, the 600,000-square-foot lifestyle center set to open there by May 2008. The $175 million project, a joint development of Santa Ana, Calif.-based Red Mountain Retail Group and Newport Beach, Calif.-based Allied Retail Partners, will feature digital and graphic signs displaying animation, sports and entertainment programming and streamed commercials. “The building-mounted signs will essentially become a second skin on the buildings,” said Doug Beiswenger, an Allied Retail managing principal, “creating a colorful and dynamic experience that will transfix all who enter The Gateway.” Irvine, Calif.-based KTGY Group is architect.

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