Galleria moves forward in tough economic times
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The Galleria at Jordan Creek, a 96-acre development southeast of Jordan Creek Town Center in West Des Moines, is moving forward, though at a slower pace than before.
Since Harry Wolf came onto the project full time in summer 2007, activity has slowed down dramatically. “The economy has been conservative and getting more conservative,” said the managing director of Buyers Realty Inc., a partner in the project with Knapp Properties Inc. “But that being said, people are still out there working on deals. It just takes longer and is sometimes more competitive.”
The developers are going through the city approval process to build another strip center on the north side of Mills Civic Parkway and plan to begin construction this fall. They also are working with city planners on an update to the entire master plan, which Wolf expects to be approved over the winter.
With the city’s approval, he said, “we would expect quite a bit of activity come spring.”
The project is a little more than half complete, with a Wal-Mart Supercenter taking up the main space to the south. It is surrounded by chain restaurants, a day-care center under construction and a half-occupied strip center next to 2nd Wind Exercise Equipment. An Iowa Health clinic is open on the southeast edge and a Casey’s General Store will open at South 64th Street.
To the north of Mills Civic Parkway, T.J. Maxx, OfficeMax and Petland stores take up most of a major strip center. A Holiday Inn recently opened. The area also includes a smaller strip center, an office building, a First National Bank office and a Red Robin restaurant.
Though national retailers have slowed or halted expansion and developments near Galleria are seeking retailers, Wolf said Galleria isn’t lowering its lease rates to attract tenants. Rather, the developers are taking a sit-and-wait attitude.
“We may have lost some opportunities,” he said, “but we want to keep the quality high and we’ve been able to do that so far.”
Galleria has had interest from a few potential tenants, but Wolf believes they won’t commit until the city approves the revised plan.
West Des Moines city planner Lynne Twedt said the re-approval process isn’t abnormal and that by the developers submitting a revised master plan, it will update the city’s documents with what has already been built, new traffic counts and signage as well as other changes.
“In our minds, it’s a slam dunk of a thing,” she said. “It’s more a hoop to have to jump through.”
The developers went before the Plan and Zoning Commission last week to reduce the size of the building planned west of T.J. Maxx by about 700 square feet, with the idea that it could attract smaller retailers, such as Maurices and Famous Footwear, which have already committed, eliminating the need to search for junior tenants. Part of this was because Kohl’s Corp. and other larger retailers have opened stores in adjacent developments.
“We just felt that with everything else that is happening in the area, certainly with the economy the way it is, that this was a better strategy for us moving forward,” Wolf said.
Galleria also hit a snag when Regency, whose commercial arm was the construction manager on the project, shut down. Edge Commercial LLC, a partnership between the former Regency Commercial Services principals and Denny Elwell Co., finished building the Iowa Health clinic at Galleria, but for future projects, Wolf said the developers will ask for other bids. “The economics of the project are still very sound,” he added.
The decision to make changes “just underscores how flexible this process needs to be,” Wolf said.