This is an open letter to the Common Council members and the Redevelopment Agency, sent as public comment:
Previously I wrote to you to speak to the LDA/URP amendments with respect to removing the hotel from the plan after a long string of other concessions by the city. Now I want to focus on the other change being proposed—the change in the definition of “Mall Classification.”
Here is the proposed change:
It is the understanding of the parties that the Redeveloper shall maintain anchors of high quality (i.e., Bloomingdales, Nordstrom’s, Saks Fifth Avenue, Neiman-Marcus, Lord & Taylor, Macy’s and Von Maur) for a minimum of fifteen (15) years. The Redeveloper agrees that for a period of ten (10) years after issuance of a final certificate of occupancy, it shall not dispute the City tax assessor from considering the Project at a minimum as a Class A Mall for assessment purposes. A “Class A Mall” shall be defined as the dominant retail property in a metropolitan market, with two or more major anchors, and at least $425 per square foot in retail sales.”
It is the understanding of the parties that the Redeveloper shall maintain anchors of high quality, which includes high quality tenants located in regional shopping centers further defined as Class A Malls herein, including but not limited to high-end department stores, high-end entertainment concepts, high-end fitness centers, high-end or specialty grocers and high-end furniture stores, for a minimum of fifteen (15) years. The Redeveloper agrees that for a period of ten (10) years after issuance of a final certificate of occupancy, it shall not dispute the City tax assessor from considering the Project at a minimum as a Class A Mall for assessment purposes. A “Class A Mall” shall be defined as the dominant retail property in a metropolitan market, with two or more major anchors, and at least $425 per square foot in retail sales.”
Since all of the “anchors of high quality” in the original definition tend to be in A or above class malls earning in excess of $500 per square foot, the muddying of the definition of what a Class A mall is should be eliminated by trying to qualify what the anchors can be. The industry already has a clear standard on what a Class A mall is. There is a simple chart and explanation in this article: https://www.ten-x.com/company/blog/for-elite-class-a-malls-its-good-to-be-king/
However, the definition of what constitutes “retail” will come into play. High end entertainment concepts in malls can be things like bowling alleys, laser tag, aquariums, theme-park type places (Snoopy Camp, Legoland), racetracks, etc. (See: http://eatertainmentvenues.com/retail-tainment.pdf
Fitness centers and theatres are also not “retail.” By embedding these possibilities into the LDA for future anchors, we are permitting the retail square footage in the mall to change in the future from what is in the current agreement. This has real consequences in a city that hosts multiple “fitness center” chains anchoring other retail strips along Connecticut, Westport and Main Avenues, as well as multiple small theatre chains (including those right in SONO).
Entertainment concepts that compete with activities in other area of the city could also cannibalize other areas of the city. (Indoor driving range? Aquarium? Bowling alley?)
High-end or specialty grocery is redundant in a city that hosts the original regionally-drawing “concept” grocery store – Stew Leonard’s. Why would anybody from south of Darien or north of Westport drive past multiple Whole Foods, Fairways, Mrs. Greens or Trader Joe’s, to get to another specialty grocery store in a mall?
Norwalk also needs to learn the lessons from past failures and thoroughly review this amendment asking the “what if” questions?
For example, what if, after receiving the certificate of occupancy, GGP chooses to sell the development to another mall operator? Will the guarantee to not challenge the Class A mall assessment bind the next owner?
What if one of the current anchors exercises an out in their contract with GGP and GGP cannot replace the anchor with a tenant that helps keep the mall’s retail sales revenues at the appropriate threshold? Will GGP be back to ask us to amend the agreement to lower the class of the mall voluntarily?
What if the occupancy rate of the mall lower the retail sales per square foot benchmark, even though the current anchors remain in place? Will GGP be back to ask us to amend the agreement to lower the class of the mall voluntarily?
GGP gambled, when it bought this property, that it could convince Norwalk to let them build a mall (whether all retail, or with some concessions). At what point does Norwalk stop being responsible for modifying its own plans for its downtown to ensure that that gamble pays off?