Albany shopping hub builds its lineup of merchants
By Alex Paul
For the Gazette-Times
ALBANY - Heritage Mall will get some improvements in coming months - both inside and out - as new owners put a fresh face on the 17-year-old regional shopping center in a bid to attract more national tenants.
Mall manager Donna Green said exterior remodeling would have begun already had the property's $34 million August sale to Steadfast Commercial Properties of California been completed earlier.
"With Oregon weather unpredictable this time of year, and the fact that it will take some time to line up contractors, it's better to wait until 2006 to begin the remodeling," Green said. "We're also going to wait on the interior work until January so that tenants can get through the busy holiday season."
The mall has dug itself out of a financial hole in the last 11 years. In December 1994, the mall's owners filed for bankruptcy protection after they were sued by the development's contractors for $9.16 million in back payments on the $21 million project.
Green has managed the facility since 1995, and says creative thinking and aggressive marketing have resulted in a strong lineup of major tenants. Today the center is anchored by Target, with 81,427 square feet being remodeled to 94,510 square feet; Gottschalks, with 43,260 square feet; Sears, with 67,968 square feet; Ross Dress for Less, with 34,451 square feet; and the newly opened Old Navy store, with 18,810 square feet.
The mall has also finished building out the pad areas in the parking lot, with such tenants as Red Robin and LoveLove Teriyaki.
The only open spaces are in the main complex, which encompasses 103,851 square feet outside the anchor spots. Some 6 percent of leasable space remains available.
Although Heritage Mall does not own neighboring Heritage Plaza, that area's development - including the July opening of an Applebee's restaurant - has been welcome news, Green said, because it enhances the drawing power for all area retailers.
The picture hasn't always been so rosy for Green, who has weathered the loss of J.C. Penney and Emporium, both anchor stores when the mall opened in 1988. But luring tenants has become a little easier in recent years, she says, as the city's population has grown.
"'Why here?' is a question that I'm asked a lot," Green said. "The answer is there are many, many families moving to the Albany area because there are good-paying jobs and yet our housing prices aren't as high as Corvallis or Portland, for example. There's also a better quality of life here than some areas. It's a great place to raise a family."
Although Corvallis may have a more glamorous image due to the presence of Oregon State University, Green said she promotes Albany as the shopping hub of the area. Corvallis relies on 20,000 OSU students who come and go each year for nearly half of its population, while Albany has a stable base and can also draw thousands of shoppers from communities such as Lebanon and Sweet Home.
The mall's successful push forward started in part with the development of Pizza Hut in the late 1990s. It was followed by Red Robin in 2000. Ross moved into the former J.C. Penney space that same year, and Gottschalks replaced The Emporium in 2005.
"I'm very happy," said Green. "Our tenants are happy. Our new owners are planning to spend money to renovate and modernize all of the mall. They want to change its looks and bring it more up to date."
Green said part of the infusion of capital will be used to purchase several retail merchandising units, portable sales carts that will be uniform in style.
"We plan to bring standardization to all that we're doing," Green said. "We hope to have some RMUs in place by Christmas. We also plan to spend money for tenant improvements to help bring in more national tenants. The new owners plan to take the mall to the next level, which will be even better for our customers."
Green said attracting national tenants has become a major undertaking.
"There are leasing conferences held around the country every quarter at which mall representatives and national business representatives get together," Green said. "The May conference, which was held in Las Vegas, drew 30,000 people. It's become a very sophisticated process. The tenants now have real estate brokers and lawyers who represent them. They want to get the most bang for their money."
There are some 70 tenants in the mall, not including those such as vending machine owners, etc.
Lease contracts are based on several factors, Green said, including type of merchandise, gross sales, amount of space needed, etc.
"We also have a specialty leasing program to help small businesses get started," Green said. "We can help someone get into a kiosk or in-line space depending on their past retail experience and their resume. That information gives us an idea of how well they are prepared to deal with business."
Nationwide, Green said, lease costs are rising as the economy heats up, and sales of Heritage Mall stores are up 9 percent on a per square-foot basis over last year.
"I'm happy with our numbers," she said. "Of course, we're always looking to increase sales more."
Assisting Green on her mall management team are Peggy Linville, property administrator; Melody Clark, customer service; Josefine Fleetwood, marketing director; and Dave Magdefrau, operations supervisor. There are 17 full- and part-time mall employees. Stores within the mall employ several hundred people, Green said.
"We're actually a major employer within the community," Green said.
The mall's newest tenant will be A&G Phone Toys, which will open soon in a kiosk near Harry Ritchie Jewelers. "They provide fun accessories for all cell phones," Green said.
Green said her goal is to have 100 percent of the in-line tenant space occupied, along with the major retailers and pad spaces, in the next two or three years.
"The end result is going to be great," Green said. "I love my job."
Reporter Alex Paul can be reached at 812-6076 or email@example.com.