Fashion Place has a new owner, and it may get a new look.
The Rouse Co., a real estate development firm based in Columbia, Md., Monday announced that it will buy Trizec-Hahn Corp.'s interests in Fashion Place and six other malls for up to $1.1 billion.The deal is part of a joint agreement between Rouse and Westfield America Inc. of Los Angeles to acquire 20 regional shopping centers from Toronto-based TrizecHahn for up to $2.55 billion.
David L. Tripp, Rouse Co. vice president and director of investor relations, said the company will not disclose separate values for each mall.
"We have stated publicly for a number of years that our objective, at least on the retail side, was to own large regional shopping centers with at least three department stores in large metropolitan areas," Tripp said. "Fashion Place clearly fits the bill."
Rouse does not own any other Utah properties, he said. Deals for the properties will close individually, and all should be completed by the end of the year.
Tabb Davis, TrizecHahn vice president of corporate communications, said the company wanted to sell the shopping centers so it could focus on other retail development.
"It's a very competitive and challenging industry, and it's driving consolidation," Davis said. "We saw we could either be an acquirer or a seller in the consolidating market, and from our perspective, it made more sense to be a seller."
Tripp said Rouse wanted to buy Fashion Place because it has a good location, has performed well in the past and has growth potential.
Located in Murray on State Street and 6100 South, Fashion Place is 95 percent occupied and generates the highest sales per square foot of any mall in the valley, said Tamara DeMilt, the mall's marketing director. Fashion Place was built by what was then The Hahn Co. and opened in 1972.
Tripp said TrizecHahn already was planning for expansion that could increase Fashion Place's current gross leasable area of about 971,000 square feet by another 200,000 square feet. He said Rouse will review that plan, which includes addition of new retailers and a 20-screen cinema complex, as well as renovation and expansion of the food court, overall remodeling and expansion by some department stores.
Tripp said construction could start as early as this fall, with some new stores opening by spring of 2000.
"There will be some demolition and reconfiguration and some new stores," he said. "I think we have 14 major expansions and renovations under way (at other properties) now. I would certainly believe that there's potential for Fashion Place."
One of the stores that may expand is ZCMI II, which has been a Fashion Place tenant for about 10 years, said Keith Saunders, ZCMI executive vice president.
"We hope we can build a full-line store there," Saunders said Monday. "I know the mall was looking at remodeling the entire center and adding to it. We would just hope we are part of that."
Other major department stores now in the mall are Dillard's, Nordstrom and Sears.
Tripp said Rouse has good relationships with most national retailers, and expansion of Fashion Place may bring some new names to Utah.
"If they're not now in the market, rest assured that we're going to try to get them here," he said.
But Tripp said Rouse is not planning to make immediate changes in the mall's management.
"I hope that we will be able to bring really top-notch leasing people and a lot of exciting new tenants to the marketplace," he said. "What we don't want to do is either spoil it or destroy any good relationships that exist."
DeMilt said local mall management knew the sale was coming, but they do not yet know all the ramifications of the ownership change.
"We just haven't had a lot of time to digest it," she said Monday.
The other six properties Rouse is buying from TrizecHahn are Bridgewater Commons in Bridgewater, N.J.; Park Meadows in Denver; Towson Town Center in Baltimore; The Fashion Show in Las Vegas; Fashion Outlet in Primm, Nev.; and Westdale Mall in Cedar Rapids, Iowa.
Rouse was founded in 1939 and currently operates more than 250 properties, including 53 regional retail centers.