Colorado Real Estate Journal - October 21, 2015
As we have all figured out, retail is different today than in its prerecession heyday. Since 2008, many national retailers have had to change their real estate strategies to survive, which meant focusing on fewer stores in major, high-density locations. This shift has left many older, traditional-style malls in smaller markets in a state of decline as retailers, led by department stores, close underperforming stores. But when an old mall dies, the challenge lies in re-engaging the community with a new, more sustainable concept – when people are still expecting that old mall. Meet Village at the Peaks. This new, all-outdoor development is being built on the site of the former Twin Peaks Mall in Longmont, which experienced a dramatic decline over many years. During this long, steady decline, other malls were built in the vicinity, tenants vacated the old mall and retailers altered their real estate strategies. What this meant for Longmont is that national fashion retailers, which were now located at Centerra, Orchard Town Center, FlatIron Crossing and Twenty Ninth Street, were not likely candidates to come back to Longmont. Unlike the shopping center before it, there would most likely be no large, national fashion retailers anchoring this new location – and the developers, and the community, would need to think outside the mall-style box. Which is exactly what’s happened. The development under construction today includes a mix of stores, restaurants, entertainment options and services the Longmont community has said it wants, from a state-of-the-art Regal Cinemas – the No. 1 most-requested element of the new project – to a top natural grocer, Whole Foods, plus a sales tax-generating giant, Sam’s Club. Beyond these big retail guns that will meet daily needs and deliver sought-after entertainment, the new mix also includes general merchandise, soft goods, food, fitness, health and beauty, wine and spirits, electronics and more. In all, 85 percent of the merchants committed to the space in the project to date are new to Longmont. That means they have made the difficult decision, during a historically tough time for retail, to move in and invest a total of more than $100 million (excluding inventory) in Longmont, and that’s in addition to the $90 million the developers and the city of Longmont are investing in this project. What’s more, retailers are enthusiastically embracing the project, which is now almost 85 percent preleased. But retail is only one part of the development planning. A major focus at Village at the Peaks is planning the consumer experience. At the new property, retail will surround an intimate and engaging village that includes $2 million of special amenities – fountains and park space, an amphitheater and play area, fire pits, lighting, lush landscaping and music, plus a full calendar of exciting community events and activities. The experience and environment has to entice the neighbors to come and spend their free time there, which doesn’t happen overnight. The development team has been working hard to build relationships with the Longmont community since long before we ever purchased the old Twin Peaks Mall in 2012. Hosting successful community events, even before the project is complete, is an important part of that strategy. Both the development and its retailers have been working with and helping local charities and schools for years before this point. Working with I Have a Dream Foundation of Boulder County connects the new village with a nonprofit that is also committed to improving the community. And it’s all coming together better than we expected. The groundbreaking event for the new retail destination held in August 2014 had twice the attendance expected with nearly 400 people, and the recent back-toschool block party and property preview event held in August brought nearly 1,500 people to the construction site. This event not only helped build key connections with local residents, but it also supported our nonprofit and community partners (including the St. Vrain Valley School District, Boy Scouts and I Have A Dream Foundation) and participating Village retail partners, which were on site, familiarizing the community with their concepts via complimentary sampling, giveaways, tastings and demonstrations. Horse-drawn carriage rides around the property – including free popcorn on the way to see the under-construction Regal Cinemas – helped build excitement among the community for the retail, dining and entertainment experiences soon to come with the first phase of store openings slated for late fall. This focus on creating meaningful shopper experiences and strong community connections to the property is more than just a nice thing to do – it’s an important business strategy that supports retailer success. This is one reason our company chooses to voluntarily fund the merchant associations of its properties. This helps increase tenant sales volumes through the production of events and marketing efforts that appeal to local shoppers to generate traffic and help developers operate a sound shopping center. The increase in e-commerce means that physical retail settings have to deliver more to shoppers than ever before. Today, there must be more – more activities, more special events, more places for people to picnic, enjoy fire pits and water features, and more entertainment. It’s a different experience, based around providing the community with a new place to gather. And so who will gather? Millennials ages 18 to 34 already are driving the retail market. The millennial generation is larger than the baby boom generation and three times the size of Generation X, with 80 million in the U.S. as of last year. Forbes reported this powerful demographic is expected to spend $200 billion annually by 2017. That’s why any new shopping destination must not only consider teens and young adults as part of the development process, but also shape the property around that growing shopping population. Experiences drive decision-making for this population. They expect fast, up-to-the-minute technology and ways to connect to each other. To attract teens and 20-somethings, as well as families, Village at the Peaks is designing a positive, safe and attractive experience. Adirondack chairs, water features, fire pits and a free gigabyte speed broadband network are just a few of the amenities coming to Village at the Peaks that will help millennials feel welcome. Guests will be able to post or hashtag directly to the project’s five full-sized monitors to connect with friends and have electronic fun. Visitors can charge their phones right from their seats at a charging bar, and the entire property is wired for sound and light for future concerts or staged events. Truth be told, traditional malls in many parts of the country are dying, but it may not be all bad. In fact in Longmont, it’s looking pretty good.