Simon Property Group has signed up Saks Off Fifth, the luxury fashion retailer's off-price unit, to anchor a new outlet mall that would open in Wesley Chapel in 2014.
The world's biggest real estate company and owner of Ellenton Premium Outlets in Manatee County, the Indianapolis-based developer has been gathering tenants for the past few months for what would be its second major outlet shopping center in the market. This one is named Tampa Premium Outlets.
While Simon declined to confirm it will take over the controversial site of an ill-fated big-box retail project at Cypress Creek by Interstate 75 in Wesley Chapel, local retail real estate brokers and local development regulators see little doubt that is where Simon is going. The landowners prevailed in December, ending an environmental advocacy group's legal challenge that had stalled the development.
The Cleveland-based Richard E. Jacobs Group, which owns 140 acres on the south side of SR 56, refused to confirm it was involved in the deal, but said it remained committed to commercial development in the area.
However, Jacobs executive Thomas Schmitz said in February that Jacobs would develop half the 100 developable acres it owns, while "the other group" would develop the other half.
Bob Sierra, a Tampa land broker who owns property surrounding the site, said his company talked with Simon but is not involved in an outlet deal.
"It's in my best interest to have it nearby," said Sierra, who opted to lie low after the housing bust and a lawsuit filed by the Sierra Club against the U.S. Army Corps of Engineers over the mall's permit.
Simon did confirm both the Wesley Chapel location and 2014 center opening date in announcing it signed Saks Off Fifth to a seven-store deal nationally over the next three years.
While new retail development shows signs of a comeback, the value-oriented outlet mall business barely missed a beat in the downturn.
Few outlet loyalists cut spending while many mall regulars traded down to what they consider better prices. While outlet shopping's appeal is a treasure hunt pawing the racks for a deal on last season's leftovers, the fact is more than 75 percent of what's sold there is made to be sold at full price. It's just missing some embellishments and made from less pricey fabric.
Meanwhile, many retailers shifted new growth to their outlet divisions during the downturn. Retailers have been objecting less to manufacturers supplying outlet stores with the same brands within a 30-minute drive.
That's why only one new conventional mall is opening nationwide in 2012 while nine outlet centers are, the most in 16 years, reports Value Retail News, the Clearwater-based outlet industry trade journal. Three of them are from Simon, which owns 80 of the nation's 187 outlet centers.
Simon owns virtually all Florida outlet malls after a buying spree swept up Prime Retail, Chelsea Property Group and Mills Corp.
In eastern Pasco, outlet mall builders have jockeyed for position for 20 years. That's because growth moving up I-75 built a population center convenient to outlet shoppers from Tampa north to Ocala. Indeed, Simon 10 years ago had a site under contract farther north on I-75 at SR 52, but let the deal lapse during the recession.
Wesley Chapel is 52 miles, an hour's drive, from Ellenton.
Simon has been more guarded than usual playing its Pasco County cards. On an earnings call, Simon chief executive David Simon said he was "excited" about a new outlet mall project in Florida, but declined to say more until more T's were crossed.
Mark Albright can be reached at [email protected] or (727) 893-8252.