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Friday, Jun 23, 2017
Business News

Outlet builder sold on Tampa

TAMPA - Outlet mall shoppers of Tampa, your world soon could get much better. The nation's largest operator of outlet malls is looking for a location in the Tampa area, potentially building a property in the style of Ellenton Premium Outlets. And though no deal or specific location is public yet, the bull's-eye is just over the line in Pasco County at the Cypress Creek Town Center site. A new outlet center would mark a new chapter for Cypress Creek, which never left the drawing board because of environmental litigation, and showcase the evolution of outlet malls from a sideshow in the retail world to a major driver of growth. One reason for that rise: Shoppers love a discount.
Foot traffic at outlet centers has been surging in recent years, especially during the holidays. Outlet centers that once held only castoffs and overstocks now have full-size stores run by some of the country's biggest brands: Nike, Brooks Bros., Kate Spade, Gymboree, Levis, Kenneth Cole, Saks Fifth Avenue and others. "Outlets are one of the hottest development areas in the whole country," said John Crossman, president of the commercial real estate brokerage Crossman & Company. "People love a discount, and outlets are a way for people to spend less money, or feel like it anyway, and still get name brands." The Tampa project is led by Indianapolis-based Simon Property Group. Recently, Simon started circulating proposals to retail tenants and developers for new outlet malls. Now, Simon has started promotions in retail trade magazines, with four sites under construction or in development: Merrimack, N.H., Phoenix, Toronto and Tampa. "Grow your business in style," the company tells potential retailers in promotional material. Simon is dedicated to the outlet concept and is "offering you the ability to build your business as well through new growth and acquisition." Simon officials say they cannot talk specifically about locations or a timeline for the Tampa project. But spokesman Les Morris noted that Simon recently bought 22 outlet centers nationwide, including a half-dozen in Florida, and the company now holds 58 outlet centers in 27 states and one in Puerto Rico. Morris noted that Simon has announced the start of construction in Merrimack, and soon a site in the Galveston, Texas, area. And Simon has deals to build premium outlets in Chesterfield, Mo., Japan and Malaysia. The Tampa-area center could end up in any of several locations, though one area stands out, retail brokers say: something 30 minutes north of Tampa on the Pasco County line. That's because Simon already has the other directions covered. The Ellenton outlet is 45 minutes south of Tampa, and to the east, there are two Simon outlets in Orlando. Because outlet operators tend to locate their sites on major freeways just outside cities, that leaves the north — and Cypress Creek — a likely prospect, said Jim Kovacs, a retail broker with Colliers International. "It makes sense there because it can draw from Tampa and everywhere north, even to Ocala or Gainesville," Kovacs said. "If Simon can do a prime outlet there, that would be a big deal for Tampa Bay. You wouldn't have to drive all the way to Orlando," he said. The Cypress Creek site sits right up against Interstate 75 and State Road 56, corridors through areas of Pasco County that saw rapid expansion before the housing collapse. It's always possible Simon could pick a location outside Cypress Creek along Interstate 75. But if not, there's an opportunity now with litigation over the Cypress Creek site entering a new phase. Controversy over the site arose in 2004 when Cleveland-based mall developer the Richard E. Jacobs Group and Tampa-based Sierra Properties announced plans for a 1.3 million-square-foot shopping center there. The Sierra Club environmental group, no relation to the Sierra developer, sued to stop the project, saying it violates the Federal Clean Water Act and threatened two endangered species: the wood stork and eastern indigo snake. As litigation dragged on, several major retailers dropped out of the mall project and two other major centers opened for business in Pasco: The Shops at Wiregrass open-air mall and The Grove. Then in December, the U.S. Court of Appeals overturned much of a lower court opinion that had placed the Cypress Creek project on hold. Developers took that as a green light. Jacobs officials this week declined to comment on the outlet center or their plans for the site, but executives recently wrote to Pasco County officials about the court ruling, saying they are "confident that this development will now finally proceed forward." The other major landowner in the area, Sierra Properties, also declined to comment. As for the Sierra Club, it has no plans to give up the fight. "Heck no," spokeswoman Denise Layne said. "As a matter of fact, I'd be really interested to see how they plan to handle the whole wildlife thing around a mall, because there is nowhere else for them to go."

rmullins@tampatrib.com (813) 259-7919 Twitter: @DailyDeadline

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