Artist rendering of the new food court area at Opry Mills.
When the May 2010 floodwaters receded, Nashville set about rebuilding downtown landmarks and emptying sodden basements. But out on Briley Parkway, Opry Mills just dried out and sat vacant.
A post-flood lawsuit between Simon Property Group, which owns a majority stake in the joint venture entity that owns the mall, and its property insurers and broker left the property in limbo. For its part, Simon held that the $50 million payout it received was $150 million shy of what it was rightfully owed, and once it got that cash it would begin to rebuild the property.
Industry analysts and local pundits weren’t so certain. The sour national economy, particularly in retail, meant that the property’s future was uncertain at best, and the lawsuit could go on for years, further eroding the property’s value.
That certainly seemed the case until the one-year anniversary of the floods, when Simon announced that it had new financing and was going to renovate and reopen the property by early 2012. (The company also has said that it will continue its lawsuit as a separate action.) Returning tenants, new stores and many other improvements were touted by Simon, which has kept up a steady stream of press releases with every new agreement that it inks.
“Things are very much on track, that’s really all we can say,” says Michael Goodman, a spokesperson for The Mills, one of Simon’s five subsidiary real estate platforms. “Our goal is to build on the strong momentum that we’ve had since announcing the reopening. There’s a lot of interest, and we are very much on track.”
New lenders Helaba Bank and Nord/LB are fronting the rebuilding, perhaps in hopes of recouping that investment after the existing lawsuit makes its way through the courts. No state or local incentives are being added to the mix, according to Simon, which added that at maximum capacity the property created more than 3,000 jobs and contributed mightily to local tax rolls.
Simon’s most recent announcement set a reopening date of March 29, 2012, with its four major anchors -- Regal Cinemas Opry Mills Stadium 20 & IMAX, Dave & Buster’s, VF Outlet and Sun & Ski Sport – opening in time for the 2011 holiday shopping season. Bass Pro Shop reopened on its own last fall.
Returning vendors include Forever 21, Brooks Brothers Factory Store, Saks Fifth Avenue OFF 5TH, Banana Republic Factory Store, J. Crew Factory, Ann Taylor Factory Store, Vitoria’s Secret, Tommy Hilfiger Company Store and Off Broadway Shoes. Eateries making their way back so far are Rainforest Café and the Aquarium Restaurant, as well as the mall’s food court.
New faces signing the dotted line include The LEGO Store, Armour Factory House, White House Black Market, Coach Factory Store, Calvin Klein, Tommy Bahama Outlet, Talbots and Chico’s.
Given that the national recovery is still far from robust, the decision to not only reopen but to aggressively court new business is a sign that retail is making its way back from the abyss. Locally, it may be a sign that the Opry Mills location is too good to just let go, says Alex Goldfarb, associate director and senior RETI analyst in the research department at Sandler O’Neill & Partners, who follows Simon and other major retail developers.
“People always like to write off retail, talk about the end of retail and how the Internet is going to kill retail,” Goldfarb said. “The fact that Simon is going ahead and reopening, and that they’re getting their former tenants and also signing new lease, shows that if you have a good retail center, and a good location, it’s going to attract tenants. People like to shop.”
Other improvements include additional family and children’s play areas, and there are likely to be many further enhancements to the 1.5 million square foot, 11-year-old property between now and its second ribbon cutting. The fact that is happening at all shows just how much Simon wanted this property generating revenue again, Goldfarb adds.
“Any time you have a negotiation, people stake out their sides,” he says of the ongoing litigation. “If one side is able to achieve its objectives without getting the other side to come to the table, that works. The fact that they are going forward shows that retail is continuing to thrive, and that this is a strong market for them.