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Southridge redevelopment, new department store plans delayed

Land and Space

Journal Sentinel business reporter Tom Daykin talks about commercial real estate and development.

March 17, 2011

By Tom Daykin of the Journal Sentinel

March 17, 2011 0

In November, we learned about Southridge Mall's $52.5 million redevelopment plan, including the possible addition of Macy's department store.

Six weeks later, the Greendale Village Board approved $16 million in public  financing for Southridge owner Simon Property Group Inc.

Since then, however, it's been quiet. An anticipated official announcement of Macy's as the mall's new anchor store has yet to be made.

The Village Board held a closed meeting about Southridge Tuesday night. The state Public Meetings Law allows closed sessions when discussing real estate negotiations.

"We're still working hard to get it done," said village Administrator Todd Michaels, who declined further comment.

Said Greg Turay, a board member, "There's something that is holding it up. I'm not at liberty to discuss what's keeping this from going forward."

Allow me to suggest one possibility: Bon-Ton Stores Inc., which operates the Boston Store department store chain, might be using its contractural right to prevent a competing anchor store, i.e., Macy's, from entering Southridge, where Boston, Kohl's, Sears and J.C. Penney all operate.

Bon-Ton has used similar tactics to keep the Von Maur department store chain out of Brookfield Square. That led Von Maur to instead proceed with plans to build a store as part of a new retail development planned in the Town of Brookfield.

Bon-Ton could be negotiating for compensation from Simon in order to allow Macy's into the former Younkers department store space at Southridge, Wisconsin's largest mall.

Spokesmen from Bon-Ton and Indianapolis-based Simon declined to comment.

Simon has said it plans to make renovations at the mall, and develop new buildings.

Neither village officials nor Simon executives have yet named prospective new tenants for Southridge, which was built in 1970 and has 1.2 million square feet.

However, Michaels in December said Simon was very close to reaching a lease agreement with an anchor tenant for the former Younkers space.

Commercial real estate sources say that anchor store is Macy's.

That 210,000-square-foot former Younkers space was nearly filled in 2005 with three retailers, but two of the stores--Linens 'n Things and Steve & Barry's--closed in recent years. The remaining store, Cost Plus World Market, would need to be relocated to make way for Macy's.

The Village Board in December approved a 25.5-acre tax incremental financing district for the Southridge site. The total estimated costs for the village will be $15.85 million, including $10 million provided to Simon, and $5 million in interest expenses for borrowing the money.

All the village's costs will be paid back within an estimated 15 years by property taxes on the improvements at Southridge, which will total $52.5 million, according to the tax district plan.

Meanwhile, Kohl's Corp. announced Thursday morning that its newly remodeled Southridge store will have a "re-grand opening" on March 25. 

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About Tom Daykin

Tom Daykin covers commercial real estate and development.

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Helpful Links and Resources

Check the Milwaukee Assessor’s Office website, which includes tools to look up property assessments.

Find property assessments for other communities throughout the state at AssessorData.org.

The Milwaukee Department of City Development website includes information on the city Plan Commission and Redevelopment Authority.

The Commercial Association of Realtors Wisconsin offers information on commercial realtors and real estate.

The Milwaukee chapter of the Institute of Real Estate Management serves the needs of real estate management professionals

The Wisconsin chapter of the NAIOP Commercial Real Estate Development Association aims to serve developers and owners of commercial real estate.


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