Midtowne Little Rock

[Architect]

I was driving down university today and saw that they were removing furniture from Bennigans. The sign on the street and the sign on the building was also removed. Does anybody know anything about this?

Dude...first time I read that I read "Brandon House" instead of "Bennigans." Admittedly, it was worn to the bone, but that place is a landmark....if not for merely lasting as long as it has...what, close to 30 years? Wonder what's to become of it?

[Aporkalypse]

Dude...first time I read that I read "Brandon House" instead of "Bennigans." Admittedly, it was worn to the bone, but that place is a landmark....if not for merely lasting as long as it has...what, close to 30 years? Wonder what's to become of it?

I thought it always did a good business.

Weird. I do think restaurant pads in that part of town are rare enough it will be easily replaced.

[Nomadic]

I found out a little more information regarding University Mall today. The land owners were there to inspect the mall. The catch is that Simon wants to keep the mall and sign another 99 year lease (I would assume that means they want to do some sort of renovation). There lease only runs another 20 years which means they wouldnt get any real ROI on any major work done b/t now and then. The land owners I dont think want Simon to keep the property as they probably have plans for it already or some things in the works. I still think that if Simon would have perhaps kept the mall up, this wouldnt be a problem. But they are the ones who let it go to crapville..

[Aporkalypse]

I found out a little more information regarding University Mall today. The land owners were there to inspect the mall. The catch is that Simon wants to keep the mall and sign another 99 year lease (I would assume that means they want to do some sort of renovation). There lease only runs another 20 years which means they wouldnt get any real ROI on any major work done b/t now and then. The land owners I dont think want Simon to keep the property as they probably have plans for it already or some things in the works. I still think that if Simon would have perhaps kept the mall up, this wouldnt be a problem. But they are the ones who let it go to crapville..

Interesting. There are two good solutions to this but both Simon and the owners may be too stubborn to budge.

99 year lease? I don't blame the owners for thinking Simon will quick-fix it and then let it run down again.

If Simon wants to keep it they need to spend a HUGE amount of money to turn it into a decent retail project again. I'm sure the owners have plenty of alternate proposals to work with assuming they can break their lease with Simon. I wonder exactly what the owners have in mind and what Simon has in mind.

I just hope we don't have to wait the twenty years for the lease to expire.

[theman]

I found out a little more information regarding University Mall today. The land owners were there to inspect the mall. The catch is that Simon wants to keep the mall and sign another 99 year lease (I would assume that means they want to do some sort of renovation). There lease only runs another 20 years which means they wouldnt get any real ROI on any major work done b/t now and then. The land owners I dont think want Simon to keep the property as they probably have plans for it already or some things in the works. I still think that if Simon would have perhaps kept the mall up, this wouldnt be a problem. But they are the ones who let it go to crapville..

If Simon would have made the $10 million in repairs, thay may have shown enough good faith with the property owners that they may have been willing to negotiate another lease. But with the way Simon has let the property run down, I wouldn't blame them for not signing a lease.

[turboturtle]

If Simon would have made the $10 million in repairs, thay may have shown enough good faith with the property owners that they may have been willing to negotiate another lease. But with the way Simon has let the property run down, I wouldn't blame them for not signing a lease.

A couple of ponderings...

At what point does someone recall the University Mall property owners become engaged in the livelihood of Midtown?

My recollection is this. During the Summit Mall controversy, the propery owners sat on the sidelines. I attended many of the Board Meetings during this time. I did not see the property owners or a representative at these meetings. Also, during the Midtown Task Force Meetings, the property owners did not attend or send a representative. I believe Claude Ballard or Mark Spradley (Task Force Members) spoke to the Patterson Family at some point during our meetings. Other than that, the owners were on the sidelines. The Midtown Task Force beget the Midtown Redevelopment District (Stacy Hurst is the City Representative).

My understanding is that the property owners receive a monthly lease payment from Simon regardless of the property value. The current lawsuit may be more about positioning the property value to charge a higher lease than the redevelopment of Midtown.

Before I wander off and totally lose the point I am trying to make...

I am not convinced that the Patterson Family has been much better than Simon with the care of the Property. Maybe some of you know otherwise?

I'd like to see Simon and the Patterson Family out of the picture. This property should be owned and redeveloped by the same entity. The University and Park Plaza Malls have some unnecessary risks to them. The risks I am referring to are the land-lease at University Mall and the Dillards' ownership of the anchor buildings at Park Plaza Mall. I believe if a tenant is looking to locate in Little Rock these business arrangements are an additional layer of risk to their assessment.

The risk is mitigated at Park Plaza by allowing the tenants to exit their lease should one of the Dillards stores close down. This clause in their contract is what created the concern for the future of Park Plaza Mall had the Summit Mall been developed. The negative effect of this risk at the University Mall is apparent now. The propery manager (Simon) can choose to manage the balance sheet by running the property value into the ground to reduce the tax burden. As long as Simon is making their payments, their in no incentive for the property owner to maintain or improve the property until it comes time to negotiate a new lease. The tenants and economic viability of the Midtown take the hit.

My other pondering...

If Simon loses out on a new lease deal, do they get shut out from the Little Rock Market? To re-enter the market, wouldn't they have to pay a premium that they currently would not have to pay.

This whole saga makes an interesting economic development case.

[Nomadic]

Something else to think about. I know that the mayor of NLR made a proposal to Simon when they were thinking of opening the Summit Mall. He wanted them to do something of a similar scale in NLR. If Simon gets a bad taste in their mouth from the dealings with the City of LR, do they renovate in NLR. I am sure with the constant competition b/t two cities that NLR would do everything they can to assist Simon in their redevelpment of McCain just to compete with retail developments on the other side of the river...

[Aporkalypse]

A couple of ponderings...

At what point does someone recall the University Mall property owners become engaged in the livelihood of Midtown?

My recollection is this. During the Summit Mall controversy, the propery owners sat on the sidelines. I attended many of the Board Meetings during this time. I did not see the property owners or a representative at these meetings. Also, during the Midtown Task Force Meetings, the property owners did not attend or send a representative. I believe Claude Ballard or Mark Spradley (Task Force Members) spoke to the Patterson Family at some point during our meetings. Other than that, the owners were on the sidelines. The Midtown Task Force beget the Midtown Redevelopment District (Stacy Hurst is the City Representative).

My understanding is that the property owners receive a monthly lease payment from Simon regardless of the property value. The current lawsuit may be more about positioning the property value to charge a higher lease than the redevelopment of Midtown.

Before I wander off and totally lose the point I am trying to make...

I am not convinced that the Patterson Family has been much better than Simon with the care of the Property. Maybe some of you know otherwise?

I'd like to see Simon and the Patterson Family out of the picture. This property should be owned and redeveloped by the same entity. The University and Park Plaza Malls have some unnecessary risks to them. The risks I am referring to are the land-lease at University Mall and the Dillards' ownership of the anchor buildings at Park Plaza Mall. I believe if a tenant is looking to locate in Little Rock these business arrangements are an additional layer of risk to their assessment.

The risk is mitigated at Park Plaza by allowing the tenants to exit their lease should one of the Dillards stores close down. This clause in their contract is what created the concern for the future of Park Plaza Mall had the Summit Mall been developed. The negative effect of this risk at the University Mall is apparent now. The propery manager (Simon) can choose to manage the balance sheet by running the property value into the ground to reduce the tax burden. As long as Simon is making their payments, their in no incentive for the property owner to maintain or improve the property until it comes time to negotiate a new lease. The tenants and economic viability of the Midtown take the hit.

My other pondering...

If Simon loses out on a new lease deal, do they get shut out from the Little Rock Market? To re-enter the market, wouldn't they have to pay a premium that they currently would not have to pay.

This whole saga makes an interesting economic development case.

The only flaw in this that I see is that the family that owns the mall is stuck with the property taxes. I admittedly haven't seen the lease and don't know all of the details of it but I remember this issue came up once before.

A few year ago when the tenants were really exodusing from University the owners (not Simon) requested the city reassess their property taxes and wanted the value of the property LOWERED as they felt they were being taxed unfairly at levels indicate of what they would pay for a viable mall. The property was appraised by a neutral party and found exactly what the owners said. The reassessed value of the property was much lower and actually they estimated the land was more valuable WITHOUT the mall on it. It's pretty uncommon, I think, to have that situation.

I have no doubt that the owners are positioning themselves to redevelop the land or sell it and want to force Simon out of the lease just as you said. That land they own is one of the most valuable parcels in Arkansas.

I'm glad to have your insight about the meetings, these are things most of us don't know.

Something else to think about. I know that the mayor of NLR made a proposal to Simon when they were thinking of opening the Summit Mall. He wanted them to do something of a similar scale in NLR. If Simon gets a bad taste in their mouth from the dealings with the City of LR, do they renovate in NLR. I am sure with the constant competition b/t two cities that NLR would do everything they can to assist Simon in their redevelpment of McCain just to compete with retail developments on the other side of the river...

McCain Mall is already there. It couldn't really be redone in a way to make it as nice as the Summit was to be. Simon really wanted big retail anchor malls at both ends of the metro to reach the population easily. If you're going to build two of anything in this market, you want one in West LR and one on US 67 in NLR.

Simon has no incentive to improve McCain, and really McCain is getting rather old and is in dire need of improvement as well. Where's the motivation to do so when Simon controls the market? If Midtown really thrived and became such a retail destination it lured shoppers away from McCain in droves, then they might rethink their approach. Simon's way of doing things, though, would be just to build a new mall out on Crystal Hill and let the old one rot.

[turboturtle]

The only flaw in this that I see is that the family that owns the mall is stuck with the property taxes. I admittedly haven't seen the lease and don't know all of the details of it but I remember this issue came up once before.

A few year ago when the tenants were really exodusing from University the owners (not Simon) requested the city reassess their property taxes and wanted the value of the property LOWERED as they felt they were being taxed unfairly at levels indicate of what they would pay for a viable mall. The property was appraised by a neutral party and found exactly what the owners said. The reassessed value of the property was much lower and actually they estimated the land was more valuable WITHOUT the mall on it. It's pretty uncommon, I think, to have that situation.

Apork

The value of University Mall was lowered to around 18 million at one point. Simon tried to get it to around 12 million. How do you reconcile what you state above with the following from a search on University Mall at http://library.ardemgaz.com/ArchiveSearch.asp?

230. LR mall to ask for lower tax valuation

Abstract: Simon Property Group Inc. will send representatives before the Pulaski County Board of Equalization on Monday to perform what has become an annual tradition: asking county assessors to lower the value of University Mall and in turn the company

[Aporkalypse]

Apork

The value of University Mall was lowered to around 18 million at one point. Simon tried to get it to around 12 million. How do you reconcile what you state above with the following from a search on University Mall at http://library.ardemgaz.com/ArchiveSearch.asp?

230. LR mall to ask for lower tax valuation

Abstract: Simon Property Group Inc. will send representatives before the Pulaski County Board of Equalization on Monday to perform what has become an annual tradition: asking county assessors to lower the value of University Mall and in turn the company

Edited August 4, 2006 by Aporkalypse

[turboturtle]

Tenant signage is going up on the facade along University. Chicos (ooooh Aaaah) was first today. Work was ongoing on another sign when I drove by after work.

[gmariam]

This was posted on ARKANSASBUSINESS.COM today......

Little Rock

[Aporkalypse]

Something has to give. With Penney's leaving and MM Cohn on just one floor they won't be making enough money to keep the mall operational.

So, Simon does pay the property taxes which are way down. The landowners get a share of the rent and this has plummeted and I'm sure their incomes from the property are much less than they were a decade ago.

I still think it's a viable mall but I think the amount needed for renovations is going to be astronomically higher than what's being spent. If Park Plaza is spending $12.5 million University would need at least $25 million in renovations just to make it competitive.

I'm glad Penney's is leaving, it may force Simon's hand a bit.

[theman]

Something has to give. With Penney's leaving and MM Cohn on just one floor they won't be making enough money to keep the mall operational.

So, Simon does pay the property taxes which are way down. The landowners get a share of the rent and this has plummeted and I'm sure their incomes from the property are much less than they were a decade ago.

I still think it's a viable mall but I think the amount needed for renovations is going to be astronomically higher than what's being spent. If Park Plaza is spending $12.5 million University would need at least $25 million in renovations just to make it competitive.

I'm glad Penney's is leaving, it may force Simon's hand a bit.

Agreed. With the loss of Penney's, University Mall is going to dry up. Penney's is the only reason why it gets the traffic it does. Simon is going to have to fish or cut bait. That property is still a valuable asset and can make it as a retail center, but it is going to take the right developer to do. Simon may finally give in and do a substantial renovation to the center in order to keep a presence in LR.

[RemusCal]

Here's my take. 25 million dollar renovation...add in Lord and Taylor and Macys or Nordstrom and make it a high end destination with all upscale shops. It could be the retail destination in Central Arkansas. They could even add a movie theater and a Target.

Idea:

Nordstrom or Lord & Taylor

Macys

Target

Malco Theaters

Cheesecake Factory

California Pizza Kitchen

Other high end shops

Little rock moves up as a retail destination for once. Problem solved.

[mcheiss]

Malco Theatres....

Go for something like United Artist Theatres.

[Aporkalypse]

Malco Theatres....

Go for something like United Artist Theatres.

UA, Cinemark, and Rave are the main theater groups in Central Arkansas with UA being dominant.

There is a study going on to determine what to do with War Memorial Park and Midtown in general and it will be interesting to see what they have to say. I still think there is a big deficit in upscale retail space and without Saks Parisian coming in there is a big need for quality department stores in Little Rock, Dillard's is just about it besides the lower tier (Sears, Penney's). There already was as study showing a movie theater is needed in Midtown LR since the one in Park Plaza closed. The theater in Riverdale is outdated and would shut down if a new Midtown theatre opened.

I wouldn't be surprised to see regional Macy's affiliate Foley's enter LR and NWA before long, they're already in TX, OK, and LA in similar markets. I would love to see Nordstrom's or Saks but I can't see the market pulling it off though surprisingly Tulsa is a similar retail market and they have a Saks 5th Ave.

There is a huge need for restaurants in the area.

Regardless, with the city making Midtown development a priority and the study coming out soon and JC Penney and the owners putting pressure on Simon to do something, I think there is a real good chance we'll hear something soon.

[gmariam]

This is a bit off topic, but has anyone heard of Blue Coast Burrito?

Apparently there is one on McCain in NLR. (I'm guessing next to the Wal-mart, I haven't been there in a while) I went to their website and they have West Little Rock listed as Coming Soon. Anyone have any idea where it's supposed to go?

Edited August 9, 2006 by gmariam

[mcheiss]

This is a bit off topic, but has anyone heard of Blue Coast Burrito?

Apparently there is one on McCain in NLR. (I'm guessing next to the Wal-mart, I haven't been there in a while) I went to their website and they have West Little Rock listed as Coming Soon. Anyone have any idea where it's supposed to go?

I've heard of them. They're like a West Coast/Fish Taco Burrito Joint.

I'm not sure when they West LR Location is opening, my guess would be somewhere near Chenal.

[Architect]

I've heard of them. They're like a West Coast/Fish Taco Burrito Joint.

I'm not sure when they West LR Location is opening, my guess would be somewhere near Chenal.

It is similar to "Flying Burrito" which just opened in the River Market district...in fact, its just as good in my opinion. Similar to Chipotle, Qudoba (or whatever its called/spelled), etc...

[theman]

This is a bit off topic, but has anyone heard of Blue Coast Burrito?

Apparently there is one on McCain in NLR. (I'm guessing next to the Wal-mart, I haven't been there in a while) I went to their website and they have West Little Rock listed as Coming Soon. Anyone have any idea where it's supposed to go?

I think the new location is suppose to be in the Highway 10 area.

[Nomadic]

I mentioned before that Simon isnt going to do anything with University that nears a $25M investment being that their lease has only aprox. 25 years left. The ROI wouldnt be there, not to mention most anchor stores want at least 50 year leases. So there is a catch that has to be solved before anything "big" happens with University Mall.. Just my opinon...

[turboturtle]

I mentioned before that Simon isnt going to do anything with University that nears a $25M investment being that their lease has only aprox. 25 years left. The ROI wouldnt be there, not to mention most anchor stores want at least 50 year leases. So there is a catch that has to be solved before anything "big" happens with University Mall.. Just my opinon...

I agree.

Here, the property owners are in the driver's seat. If the current litigation does not end in favor of the property owners, they can wait out the lease. Simon Properties would be out of the University Mall business. If this happens, what would the property owners do?

My hope is that they would sell the property, (something they could probably do now) or find a way to develop it themselves. Signing another long-term lease would resolve the issue in our lifetime, but it would probably return at some point.

I am intrigued by the question of whether the City could/would exercise immonent domain on the lease agreement between Simon and the property owners. This action by the City could return the property to its "highest and best use" in less than 25 years.

[Aporkalypse]

I agree.

Here, the property owners are in the driver's seat. If the current litigation does not end in favor of the property owners, they can wait out the lease. Simon Properties would be out of the University Mall business. If this happens, what would the property owners do?

My hope is that they would sell the property, (something they could probably do now) or find a way to develop it themselves. Signing another long-term lease would resolve the issue in our lifetime, but it would probably return at some point.

I am intrigued by the question of whether the City could/would exercise immonent domain on the lease agreement between Simon and the property owners. This action by the City could return the property to its "highest and best use" in less than 25 years.

I bet the owners are looking for quicker return than 25 years down the road. I bet they are trapped and couldn't sell if they wanted to with the current lease situation. I would rather see the owners develop it themselves but I have a feeling they will find a way to settle this with Simon out of court for a major renovation. I bet they would settle with Simon and agree to a longer lease if Simon would spend enough to make the mall an "A" mall again or redevelop it as a profitable multiuse property. Simon's going to lose money with it becoming increasingly vacant and being stuck in the lease for 25 more years. I bet Simon will eventually cave and a patch job like the one they're currently intending isn't going to bring in significant tenants, they will either have to abandon the mall to the owners or spend the money for major renovation.

I wondered about the city using eminent domain as well. The city is going to make midtown revival a big issue over the next few years and the University property and War Memorial Park are really the two main potential sites. I don't see Little Rock having the courage to push a large city-owned and financed mixed use centerpiece development the way Southlake, TX did but I think this would undoubtedly work and everyone would be very happy with it. Perhaps the city could incorporate a science museum or something similar into its redevelopment plan for the area and use this as an excuse for eminent domain. It's tough to use eminent domain to acquire land from one developer just to give to another, I would think. It would be a VERY expensive piece of property for the city to purchase for this kind of use but by clearing the land and selling most of the rest of it for handpicked projects they could probably recover it.

Regardless, I just don't think this waits another 25 years to resolve.

[hartford]

This is a bit off topic, but has anyone heard of Blue Coast Burrito?

Apparently there is one on McCain in NLR. (I'm guessing next to the Wal-mart, I haven't been there in a while) I went to their website and they have West Little Rock listed as Coming Soon. Anyone have any idea where it's supposed to go?

I have heard that they have recently signed a lease in one of the new strip malls on hwy 10. I am not sure exactly which one but I know that it will be coming soon.