Investors in Macerich, the California-based mall landlord
that agreed in 2014 to invest $107 million in Center City's Gallery at Market
East, and Pennsylvania Real Estate Investment Trust, the mall's longtime owner,
expect to learn more in the next few months about how the companies will fund
improvements, boost sales, and squeeze more profits at the aging three-story
mall.
At a meeting with investors last fall, Art Coppola,
Macerich's chairman and chief executive, sketched the Gallery owners' plans.
Based on my review this past week of a transcript of that
meeting with investors, here is what Coppola and Macerich are betting on:
New stores: "We're really bullish on the leasing
conversations that we've had with retailers to come to the property,"
Coppola told investors.
He named Primark, the largest clothing retailer in
Britain, as having a "particular" interest in exploring Philadelphia
sites.
Primark, British-owned by Associated British Foods, has
already said it will open a location at the former Sears store at King of
Prussia, and six other ex-Sears sites from Boston to Baltimore.
The chain plans to hire 480 for its 80,000-square-foot
King of Prussia store, spokeswoman Colleen Cleary told me. She said Primark was
looking for more locations in the Northeast, but wouldn't say if Center City
Philadelphia (or the Gallery) was on its list.
"We expect to have them all open by late 2016,"
Cleary added.
Taxpayer aid: Coppola has had numerous meetings with city
and state officials about collecting public "entitlements" to help
Macerich meet its target of earning 8 to 10 percent, or up to $10.7 million, in
yearly profits from its investment in the Gallery, he told investors in the
conference call.
PREIT is "heading in the right direction" in
its efforts to arrange a public-aid package, Coppola added.
PREIT wouldn't return calls asking about retail
subsidies. Deputy Mayor Alan Greenberger confirmed city officials have met with
the mall's owners, but added that they haven't yet laid out plans for financial
incentives, or learned which new stores the Gallery hopes to open.
Good neighbors: "SLS is doing a new luxury hotel
just a couple of blocks away from the Gallery, and that's a great sign,"
Coppola told analysts on the conference call, after questions were raised about
the neighborhood and noted it had been considered for a casino.
The SLS International hotel that developer Carl Dranoff
hopes to build would be at Broad and Spruce Streets, four blocks west and four
blocks south of the Gallery.
Primark deepened its Pennsylvania focus last week when it
agreed to lease a 677,000-square-foot warehouse in Bethlehem, on the former
Bethlehem Steel Co. property, now owned by investors Trammell Crow Co. and
Clarion Partners.
CBRE Inc.'s Joe McDermott represented Primark, while his
colleagues Vincent Ranalli and Jake Terkanian repped the landlords.
The industrial park is also home to new shipping
facilities for Walmart, Crayola, and the online retailer Zulily, thanks to its
location near I-78 and other highways that offer trucks a free alternative to
the costly Pennsylvania and New Jersey Turnpikes.
Primark says it can afford to offer women's, men's, and
children's clothing at competitive prices because it doesn't advertise, buys
clothes in large lots and does so well in advance of each fashion season, and
pays suppliers promptly.
Besides its investment in the Gallery, Macerich's
Philadelphia-area properties include the Deptford Mall in South Jersey.
Source: Philly.com
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