Universitv Daily Kansan / Tuesday, April 24, 1990
11
Downtown business not hurt by mall
Rv Stan Diel
Special to the Kansan
In light of the reputation that suburban retail malls erode small towns' downtown business districts, Lawrence businessmen could have worried about the opening of a Lawrence Riverfront Plaza this month.
But even those businessmen who said they were worried, now report that business has improved with the factory outlet mall's opening.
"It definitely hasn't taken away any business," said Jon Francis, manager of Francis Sporting Goods, which stocks MTS. "It's kind of surprising."
Francis said he found that the store's retail prices were competitive with the outlet mall's prices on some goods; and people who came to town to shop at the mall also were shopping downtown.
His customers said they had been pleased with the mall, Francis said, and the only complaints he had heard were about inadequate parking.
Downtown merchants agree that the initial effects of the mall have been favorable.
"We can already say that it has had an impact, and it has been very positive. We've seen the additional traffic it's created," said Wim Cumpbell, owner of Campbell's Men's and Women's Clothing, 841 Massachusetts St. "As for the long term, nobody really knows yet."
The Lawrence Riverfront Plaza is a factory outlet mall that offers factory close outs and other goods at prices reportedly 40 to 40 percent less than retail prices. The 55-store mall along the Kansas River next to City Hall is managed by the Chelsea Group, a developer that has built similar malls on the East Coast and in California. More than 30 of the 55 spaces already have been leased in the mall. About 70 percent of the stores are expected to be open by the grand opening, which begins April 27.
Local Chelsea Group and mail officials refused to comment.
Success in New Jersey
Jean Smith, Chelsea Group vice president for public relations, said the outlet mall concept succeeded where retail malls failed because it targeted a larger group of potential consumers. By offering lower prices than retail stores and malls, the outlet malls draw customers from farther away.
Smith said the Chelsea Group's outlet mall in Flingington, N.J., the Liberty Village Factory Outlet, served as a big enough attraction that downtown businesses 'losses in
revenue due to added competition were offset by the new customers the mall attracted from surrounding areas.
Advocates of the outlet mail concept said the mails often spurred economic growth in a community beyond that which might be expected. Because the consumers spend their money in the outlets, they spur growth and provide communities with tax revenues.
But because a large proportion of the consumers are from out of town, they don't burden the city services, they help to finance through corporate charities that sees the same type of revenue as one that has a strong tourism industry.
Smith said this was the case in New Jersey.
"The mail had an enormous effect on the revitalization of the entire community," she said. Smith said the 65-store New Jersey mail provided more than 200 jobs including employment for high school and college graduates, and citizens. The revitalization of the city's downtown has calmed the fears of businessmen who were worried that their businesses would suffer.
Dawn Coleman, Communications Manager for the Hunterdon County Chamber of Commerce, Hunterdon County, N.J., agreed with Smith that Hunterdon mail had had a desirable effect on the community and its downtown.
"It has attracted a lot of other businesses to the area," she said. "It really started the ball rolling."
Coleman said that because the outlet malls sell factory goods at prices lower than retail, they promote recreational shopping. Because customers never know exactly what to expect, they browse more and spend more time in the mall and the surrounding community, bringing with them money for hotel rooms and restaurants.
In fact, Coleman credits much of the town's economic success and revitalization to the revenue the mall has produced through recreational shopping and tourism. A Hunterdon County Chamber of Commerce report said that five years after the mall opened, downtown retailers still were experiencing growth in sales, and new businesses were moving in. The value of downtown property increased from $4 a square foot to almost $20. The Chamber of Commerce even credits a renovation of old neighborhoods to prosperity created by the outlet mall.
Plaza may force downtown to keep the light on longer
Before the construction of the mall, most consumers chose to shop in retail malls in metropolitan areas
By Marcelle La Garde
Special to the Kansan
Competition from the new Riverfront Plaza may cause Massachusetts Street shop owners to keep their doors open longer, some downtown merchants said last week.
"Once the mall opens more stores, you'll see more stores downtown stay open later," said Ron Adrian, owner of Safes at 922 Massachusetts St.
Ariyan said he wished downtown merchants would adopt extended hours.
Most Massachusetts Street stores traditionally have closed at 5 or 6 p.m. during the week and are open until 8 or 8:30 p.m. on Thursday.
The Riverfront Plaza, which has scheduled its grand opening of 35 stores for five days, is open on Sunday through Saturday, 9 p.m. Thursday through Saturday
"I imagine that you're going to see in the next month that the outlet center goes to 9 p.m. every night," Adrian said.
and noon to 5 p.m. Sundays.
Mark Carter, facility operations manager for the Riverfront Plaza, said he did not think the mall hours an effect on downtown businesses.
Beth Castle, assistant director for Downtown Lawrence, A Kansas Corporation, said the mails hours would affect business on Massachusets Street. She said it was important for Lawrence merchants to realize that they probably would need to extend their hours to compete with the new mall.
The Buckle, 805 Massachusetts St., is one of the few Massachusetts Street stores that stays open during the evening. It is open until 8 p.m. on weekends, open until 9 p.m. Mitch Rodriguez, manager of the Buckle, said he got some of his best business during evening
hours.
Rodriguez said downtown merchants should open and close at set times.
"I think that if a lot of downtown did it now, it would be spontaneous," he said. "People work and they get off at 5 p.m. How do they expect to go shopping when the stores are closed? Our policy is to always be convenient for our guests."
Chris Hurt, manager of Mister Guy, 920 Massachusetts St., said he did not have plans to extend the hours, or the customers wanted
Sharon Cox, owner of College Shoe Shop, 837 Massachusetts St., said if the mall started bringing back the discount store might increase its hours.
Peggy Mc Call, Dallas junior,
said downtown was not open when
she needed to shop.
"I think the younger people will be out there at the mall because it's open later," she said.
about 45 miles from Flemington, according to the Chamber of Commerce report. The report said that the outlet mail not only recaptured $120 million but also that bit into the metropolitan retail mall's share of the retail market.
chamber of Commerce officials have said the tourism industry, for which they give the mall partial credit, brings more than $100 million annually. The big problem they report is a lack of parking.
Problems in Hutchinson
Woodward said a retail mall, because of its narrower consumer
"I would say it has been unfavorable," he said of the impact of the retail mall, which has contributed to more downtown vacancies. "We've been fighting that battle since the mall opened."
Howard Woodward, the Downtown Development Director for Hutchinson, favors the outlet mall concept as a tool for bringing in new consumers. He has seen Hutchinson's downtown development out of the city's suburban retail mail.
base, would need at least 90 percent occupancy by its fifth year in order to be successful. The Hutchinson Mall, 62 percent of operation, is on only 62 percent.
Hutchinson Mail officials could not be reached for comment.
Woodward said an outlet mall closer to downtown could have had the opposite effect on both the mall and the downtown.
"A factory outlet mall will draw people from a wider area," he said. "If we had an outlet mall here people would drive from Wichita and the surrounding area. If it was closer to our city, it would spill over into downtown."
Overall, Woodward predicted success for Lawrence's downtown because of the proximity of the mall to the downtown business district.
the Lawrence mail will draw people from Topeka and Kansas City, and they will want to shop downtown," he said. "They will see some spillover, but some stores also will be hurt. If a store downtown carries the Pendleton line, and you can buy a Pendleton shirt for 50 percent less at the mall, where are you going to shop?"
Optimism in Lawrence
Lawrence used a number of tactics to lure Chelsea Group developers to build the mall, including building and operating a parking garage and offering a 50 percent property tax abatement for 10 years. The mall also will get some state income tax relief because it was built within an enterprise zone, which are zones in which some businesses can qualify for tax breaks for building or expanding.
According to a cost/benefit analysis prepared for the city by City Manager Mike Wildgen, the city will begin to show a profit in 2000 when industrial revenue bonds that were issued to pay for construction are paid off.
City costs for the mall will exceed revenue by $830,811 in 1990, according to the report. But in 2000, the city will receive more than $200,000 in sales taxes, more than $174,000 in property taxes and more than $130,000 in revenue from the city-owned parking facility. The city's net profit for 2000 is projected to be more than $400,000.
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