Robust. Vibrant. Optimistic. Moving forward. Such are descriptors by economic development professionals with the Town of Prescott Valley and the City of Prescott regarding their retail industries.
Quad Cities Business News caught up with Ben Hooper, economic development coordinator for the Town of Prescott Valley; Wendy Bridges, economic development coordinator and film commissioner for the City of Prescott; and John Heiney, community outreach manager for the City of Prescott, to obtain insights. Capitalizing on the allure of their municipalities for retailer prospects, these experts employ strategies to satisfy local and tourist consumers in their buying habits.
Among the topics was Prescott Gateway Mall (PGM), sitting atop Bullwhacker Hill 4.5 to six miles from the communities’ central shopping districts. The mall, purchased from receivership in 2013 by Tabani Group Inc. of Dallas, Texas for $16.3 million, was auctioned in April to an undisclosed bidder for $10 million. Under Tabani’s ownership, several parcels earlier had been sold off, including those under Texas Roadhouse, Cost Plus World Market, and cell towers. Anchors Dillard’s, JCPenney and Sears have owned their parcels since the mall opened in 2002.
“With the data we have and existing contacts in our area already, we will always stand ready to assist the new owner with retail recruitment,” Heiney said. “We hope to partner with them and assist in any way possible, once we know who they are and what their goals are. We have some tools to assist them. They are an important piece to our retail mix. Their success is our success.”
Shortly after the April auction, Wildflower Bread Company – one of the mall’s most popular establishments – announced an anticipated move to construct a stand-alone restaurant to replace its current location at the mall’s round-about.
“We have met with Wildflower already,” Heiney said. “We are excited about their investment in the city. They wanted a larger location to meet criteria for a flagship type of store. We are working with them to meet their objective of opening by the holidays.”
Rumors continue to fly regarding the mall and its future. There is no indication whether the premises will remain a standard mall, be reshaped as a discount complex, or repurposed to something else entirely. Disclosure of the new owner’s identity is anticipated within 60 days, following close of escrow.
Stating that the recession hurt the mall “considerably” and citing recent estimates of occupancy at 60 percent, Hooper advised: “We’ll have to wait and see. Time will tell if it can come back [and] what new ownership wants to do with it.”
That occupancy rate, which had been around 72 percent when Tabani took over management of the property, “pretty much signals the end, unless [the new owners] change its use,” Hooper shared. “I am not a developer and can’t predict what they know ahead of buyers, but they may want to work to diversify what’s in there away from retail. A satellite [university] campus would not be a bad idea, certainly,” though he cautioned that moving away from retail then could present challenges to retaining the three anchor department stores.
“In my experience, retailers are not innovators,” Hooper said. “They want to make money and have a method of making money. If that doesn’t align, they will relocate. Some will relocate into Prescott Valley. You’ll see more of that as people continue to recognize that Prescott Valley is more the center of retail in the county. Crossroads is a fantastic location. It’s the same thing at 89A and Glassford Hill Road. We can draw from both areas, and neither location is a far drive.”
Of the mall location, Hooper said, “If there [were] no mall there, it would not be my first choice for a retail center. There’s terrible visibility from the highway. It took an enormous amount of grading and site work to get ready. All of that adds cost to a retail model.”
Nationally, the trend is toward more lifestyle centers and open-air malls, Hooper said, “Consumers don’t want to spend 45 minutes searching. They don’t want to walk all the way through a mall. That had changed by the time they built that mall.”
Heiney hesitated to speculate what could occur with the mall, but acknowledged that “we’ve seen malls struggle across the country. A lot of malls have been remade. They were brought to their knees, almost completely empty, and yet remade. There are a lot of successful models out there that the new ownership can look at and work with. I am very confident that they can work with and make something of the mall. The city stands ready to assist with whatever their goals and objectives are.”
The mall’s struggles to date fortunately have not rubbed off on the overall retail environment of either Prescott or Prescott Valley.
“We are the fastest growing community in Yavapai County and the largest in Yavapai County,” Hooper said. “And we are the only community in [the county] that is growing younger every year,” with the average age hovering around 37 years.
Prescott Valley’s last fiscal year ended June 30 with $440 million in retail sales, and 2017 is projected at $460 million to $456 million, Hooper said. Walmart has been a significant contributor to that growth. Average dollars per square foot mirror Arizona’s 4th Congressional District encompassing most of Yavapai County and some of Maricopa County at $256 per year, he noted. Hooper estimated the town’s retail vacancy rate at about eight percent.
The town has “definite retail gaps,” such as restaurants, businesses specifically targeting niche markets such as babies, and geographic voids. Hooper said that he is “hopeful that with the massive increase in population we keep seeing, a new neighborhood-style retail center” will be built.
The most likely location, he explained, would be at the north end of Highway 89A at Glassford Hill Road or Viewpoint Drive to serve residents of Pronghorn Ranch, Viewpoint, Granville and surrounding unincorporated areas. His “perfect world” vision for that area involves a grocery-anchored retail development with nail, hair, pharmacy and similar amenities to “serve the residents on that end of town.”
Several locations in Prescott Valley comprise Arizona’s top performing storefronts for corporations such as Fry’s Food and Drug, Maverick and the Family Dollar Store, Hooper said. The latter two, near Quailwood subdivision, indicate that this area also is ready for retail development, Hooper explained to capture demand from Dewey-Humboldt residents.
Hooper’s wish list, if demographics support it, includes a smaller footprint Cabella’s store for the hunters and outdoorsmen in the area; another grocery store on the north or far east side of town; a discount storefront such as Burlington Factory as the region grows to support it; “lots and lots” of restaurants, both chain and locally-owned; hotel and conference room space to accommodate events and business meetings; and satellite car dealerships as offshoots of some of the big names in Prescott.
“We are a town that is ready for new business, a town that is ready to continue our growth,” Hooper said. “We have a plan, a managed plan to do it, one that is respectful of our water resources, respectful of our natural environment. Nature is always displaced, but there’s a way to do it [with reduced impact].”
The City of Prescott’s ongoing efforts in developing retail opportunities has been supplemented by a contract with Buxton Company, a retail recruitment strategy company and data aggregator. The Prescott City Council in December established a $48,000 one-year contract with the firm “to help evaluate our market and matching retailers that are a good fit for us,” Bridges explained. “There’s really a particular type of retailer we have set our sights on, although we are not ignoring others.”
That target is “destination retailers” or “lifestyle retailers,” Bridges clarified. “We are bringing people in from outside of Prescott to shop. Residents already are leaving our market to find retailers they want to shop. Some of our prospects are not even available [yet] in the north central part of the state.”
Employing the Buxton data and recruiting retailers are a “big focus for the next weeks and months,” Bridges said. “We are still very early in the process” and therefore not able to provide specific names of retailers being targeted. Existing examples are Trader Joe’s and Costco.
“Folks from the region coming to these destination retailers are actually spending the night in Prescott,” Bridges said, describing an identified trend. The plan also is to incorporate the Buxton data to assist hotel and business operators in knowing where visitors are coming from and where they are spending money.
“Little niche stores are very successful here,” Bridges said. “It’s harder for them in a larger market to be competitive. There’s a lot of new business coming in, and obviously, we are excited about that.”
Several of those new “mom and pop” ventures include Lavender Hill Farms in Bashford Courts, as well as John Hancock Barber Shop, a leather goods store and Union Home Mortgage in the Elks Opera Building.
“With a lot of downtown stores, it’s the experience of it,” Bridges said. “Downtown is a fun place to be. Meandering, one-of-a-kind unique propositions locally sourced. Those are the things that people seek out. The people running those businesses are your neighbors, too, so you feel good about doing business with them.”
Heiney, who, similar to Hooper, recently moved to Prescott from Michigan, said Prescott’s historic downtown “is one of the best I’ve seen. Locals and tourists seek it out. We are fortunate to have such a strong, healthy downtown. A lot of people work very hard to make that happen.” QCBN
By Sue Marceau, QCBN
Photo caption:
Grant Quezada, a veteran and owner of John Hancock Barbershop in Prescott’s Elks Opera Building, styles the hair of customer George Beitzel, also a veteran and a realtor with Realty Executives. Quezada’s shop is one of the city’s newer retail establishments.
Photo by Sue Marceau
Leave a Reply