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Retail market chilling outlet mall proposals for Tulsa area, developer says

A softening retail market has worked to place two planned outlet malls for the Tulsa area on hold, a developer for one of the projects said.

Stephen Coslik is chairman of the Fort Worth, Texas-based Woodmont Co., which is partnering with Cherokee Nation Businesses to bring the Cherokee Outlets to Catoosa. That project, along with Simon Property Group’s proposed Tulsa Premium Outlets in Jenks, has been in the pipeline for several years but hasn’t started construction.

“Retail is going through a major upheaval as we speak,” Coslik said by telephone this week. “That upheaval is cause for most retailers to say, ‘We need to take a breath or two before we decide to jump into new deals.’

“So new deals are few and far between right now. We are still wanting to do an outlet in Tulsa, and we still believe our site is a better qualitative site than the Simon site. But until the retail industry gets to what I will call a state of equilibrium, you’re not going to see many outlets in America undertaken, including one in Tulsa. That’s a pretty broad consensus.”

Woodmont has backed a reported $80 million development at the Hard Rock Hotel & Casino Tulsa. Simon Property Group has pushed for an 80-retailer mall across the Creek Turnpike from the Oklahoma Aquarium in Jenks.

When the Jenks City Council rezoned the land, Simon said it would break ground in 2016 and open in the summer of 2017. The groundbreaking didn’t happen. Assessor records, which can be several months behind, show the land has not changed hands yet.

A representative from Simon couldn’t immediately be reached, but an online company brochure indicates the mall is scheduled to open in 2019.

“It’s a challenging time in retail,” Coslik said. “There have been 6,000 stores that have closed this year in America, projected to be 10,000 before the end of the year. You have more bankruptcies than ever before. It’s all a function of the fact that to be a successful retailer, you have to be willing to turn on a dime. Many of the retailers turn too late or still haven’t turned.”

After a stint as economic development director for the city of Owasso, which welcomed the $55 million Smith Farm Marketplace in 2005, Rickey Hayes founded Retail Attractions, an economic development consulting firm.

“What happened in a nutshell is that during this interim time of due diligence and waiting and trying to get all the stars and tenants lined up, the market softened,” he said by telephone. “We had a presidential election. Retail has changed for the last several years, and it’s still changing. This online-purchasing-versus-brick-and-mortar-stores argument continues, and nobody knows where that’s going to stop.”

E-commerce retail sales in the second quarter of 2017 accounted for 8.9 percent of total sales, according to a U.S. Department of Commerce report released last month.

“Ninety-one percent of the people still want to go into a store and shop,” Coslik said. “But it’s where they are shopping now that is different.
“People want to have their own unique experience. You don’t get that going to Sears or a department store because they have 30 of one thing on a rack. How is that unique?”

An existing outlet mall in the state, The Outlet Shoppes at Oklahoma City, was sold earlier this year to The Outlet Resource Group in Maryland for $130 million. The roughly 400,000-square-foot development posted revenues of $140.6 million in fiscal year 2016, up from about $130 million two years ago, said M. Brent Bryant, Oklahoma City’s economic development program manager.

But even it endured a rocky beginning. The economic downturn of 2008 forced the original developer to find a new investor, pushing back the scheduled opening a couple of years to 2011, he said.

“We’re seeing more investment in that area on the out parcels,” Bryant said. “There is still room to expand. An OnCue was built next to it so people can stop and fill up. There is a Tesla charging station on the premises. They are about to go through an entire renovation of the exterior. The TORG group, which bought the property, we’re very excited about their approach. We think they are going to take it to the next level.”

After Creek Turnpike interchange improvements near the proposed Simon project were completed this year, Jenks Chamber of Commerce President Josh Driskell said in a statement that “we have every indication the project will be built.”

“Jenks is fortunate to have prime property in a prime location with the supporting infrastructure and incentives. We are already experiencing tremendous growth in restaurants and retail throughout the city. We can only anticipate this trajectory will continue.”
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