January MSCA Backup12.40 - Minnesota Shopping Center

2006 Corporate Sponsors
news
American Engineering Testing, Inc.
The Avalon Group
Barna, Guzy & Steffen, Ltd.
Bremer Bank, N.A.
CB Richard Ellis
Volume 20, Number 1
January 2006
CSM Corporation
Cambridge Commercial Realty
Colliers
The Collyard Group, L.L.C.
Dalbec Roofing
F eWhat
a tEvery
u r Real
e Estate Professional Should
Know About New Market Tax Credits
Fantastic Sams
General Growth Properties, Inc.
Great Clips, Inc.
Griffin Companies
H.J. Development, Inc.
J.E. Dunn – North Central
Jones Lang LaSalle
KKE Architects, Inc.
Landform
by Tony Pasko, Bremer Bank, N.A.
W
hat if you could borrow 100% of the
cost of developing or substantially
renovating your new shopping
center project, only pay debt service on 70%
and have the government pay a return on the
remaining 30%? While it may take some time
and effort, New Market Tax Credits can help
you do just that.
New Market Tax Credits (NMTC) came into
being in December of 2000 as part of the
Community Renewal Tax Relief Act of 2000.
These tax credits are intended to stimulate
investment in “low income communities” as
defined by census data. While NMTC’s are
directed at businesses, many commercial
Tax Credits continued on page 2
Larkin Hoffman Daly & Lindgren Ltd.
M & I Bank
Madison Marquette
Messerli & Kramer, P.A.
S nShops
a p at
s hPlymouth
o t Creek – Lot 5
Midwest Maintenance & Mechanical, Inc.
Morcon Construction
Location: Southwest Corner of Project
Entrance at Hwy 55 and Vicksburg, Plymouth
Northstar Partners/Cushman & Wakefield
Oppidan, Inc.
Opus Northwest LLC
PCL Construction
Park Midwest Commercial Real Estate
Month/Year to Open: Under Construction.
Anticipated Tenant Delivery: April ‘06
Lot 5 Ownership: Plymouth Creek
Ventures, LLC
Underlying Owner: CSM Corporation
Paster Enterprises, LLC
RLK Incorporated
Lot 5 Developer & Managing Partner:
Mosborg Ventures, LLC
RSM McGladrey, Inc.
RSP Architects
Reliance Development Company, LLP
Robert Muir Company
Solomon Real Estate Group Inc.
Center Manager: Allied Properties &
Management, LLC
Leasing Agent: Steven Mosborg
(651) 209-9626, Suntide Commercial Realty, Inc.
Architect: Architectural Consortium
Stahl Construction Company
TCF National Bank Minnesota
U.S. Bank
United Properties
Venture Mortgage Corporation
Weis Builders, Inc.
Wells Fargo Bank, N.A.
Construction Contractor: Stotko Speedling
Construction
GLA: 6,000 sf
Current Occupancy: 1,800 sf Dunn Bros with
drive-thru and outdoor patio; 3,000 sf Umbria
Pizza with outdoor patio
Number of Stores: 3
Welsh Companies, LLC
Westwood Professional Services, Inc.
Project Tenants: This 230,000 sf project is
99% leased, and occupied by Lowe’s,
Michaels, Walgreens, M & I Bank, Chin’s Asia
Fresh, Potbelly Sandwich Works, Salsarita
Fresh Cantina, Super Cuts, T-Mobile, Palm
Beach Tan, Massage Envy and Jamba Juice
Market Areas Served: Plymouth, Wayzata
and Western Suburbs
Construction Style: Masonry & Steel
Additional Facts: Only one 1,200 sf space left
in this padsite development at the primary
entrance to the project. The building is highly
visible from Vicksburg and directly adjacent to
Plymouth Crossings, a new 96-unit senior housing project. Highway 55 pylon signage is still
available for this last space in the entire project.
TAX CREDITS
continued
properties qualify. In fact, 52% of the
services proposed by allocatees in the first
NMTC offering were for development or
rehabilitation of real estate. The latest 2005
awards included $1,340,000 (67%) to
Community Development Entities (CDE)
whose predominant financing activities are
real estate. The largest allocations by
property type are mixed-use at $587
million and retail at $556 million. Multifamily rental properties are specifically
excluded from NMTC benefits.
A low-income community is defined as at
least 20% of households are below poverty
level or median family income below 80%
of the statewide or metropolitan median
family income level. About 39% of census
tracts nationally qualify as low-income
areas. The same 39% applies to Minnesota
where 510 of 1303 census tracts fall in this
category. An investor in a “Qualified
Equity Investment” receives tax credits
totaling 39% of its investment over a
seven-year period.
The program is administered by the
Community Development Financial
Institutions (CDFI) Fund in coordination
with the IRS and US Treasury. The total of
NMTC established by the 2000 legislation
is $15 billion over seven-years, beginning
in 2001. The NMTC’s are distributed via
CDE’s that are certified by the CDFI.
CDE’s are entities whose primary mission
is providing capital to low-income
communities or persons. Some of these
entities are community development arms
of financial institutions. There are 12 Twin
Cities’ based CDE’s on the CDFI Fund’s
website. However, it is not necessary to
deal with a local CDE. A full 33% of
NMTC’s awarded in the first round were
for entities that proposed uses in multiplestate or national locations.
Each year these CDE’s submit competitive
applications for that year’s allocation of
NMTC’s. The total authorization of $15
billion was divided as follows. 2001: $1
billion, 2002 and 2003: $1.5 billion each,
2004 and 2005: $2 billion each and 2006
and 2007: $3.5 billion each. A CDE cannot
apply for additional credits until it has used
50% of the previous years’ allocations.
Currently, applications are in for the sixth
year (2006) allocations of $3.5 billion that
will be awarded in April/May of 2006.
msca news 2006
While $15 billion in NMTC’s may seem a
lot of money, it is really a very scarce
resource. The first two allocations of $1
billion and $1.5 billion were combined in
the initial offering. Applications were
submitted by 1,033 CDE’s totaling nearly
$26 billion. Only 66 allocatees received
NMTC’s totaling the $2.5 billion offered.
Once a CDE receives an allocation it has
the ability to direct the New Market Tax
Credits to projects that are consistent with
its mission. And as you might imagine, a
successful allocatee is suddenly inundated
with many investment opportunities.
Albert Einstein once said man’s greatest
invention was compound interest. The real
magic in NMTC is achieved through
another one of man’s great inventions —
leverage. For example if you have a $1
million project and are fortunate enough to
connect with a NMTC allocatee that has
available allocations it can use for your
project, you can raise $300,000 in equity
from a third-party investor and obtain a
$700,000 loan from your financial
institution. This results in the investor’s
qualifying investment of $1 million. The
financial institution has what should be a
sound loan at 70% of project cost that
should also translate into good loan-tovalue and debt service coverage that will
produce a cash return to the developer. The
third-party investor is credited with a $1
million qualifying investment that generates
$390,000 of NMTC’s that are taken as
credits against payment of the investor’s
federal income taxes over the next seven
years. At the end of seven years, the thirdparty investor accepts perhaps some small
residual interest, but it has essentially
received its return through NMTC.
There is a catch in these leveraged deals
called recapture. If the lender were to
foreclose on the real estate during the first
seven years, a recapture event would be
triggered. In that event all previous tax
credits resulting from this transaction
would be recaptured. Not surprisingly the
NMTC industry has developed a response
to that potential threat – forbearance. The
financial institution loan needs to be
structured in a fashion where the lender
will not foreclose and repay its loan in the
first seven years. Depending on the
negotiation between investor and lender,
the lender may be allowed to take certain
enforcement actions short of foreclosing
and retiring its loan. That’s a tough sell
2
with a lender. But, if the investor and
lender are related entities, that may give
the investor enough comfort to
compromise on the no-foreclosure
requirement.
So what should you do as a real estate
professional interested in NMTC’s?
Norman L. Jones of the Minneapolis law
firm of Winthrop & Weinstine, P.A., who
has completed several of these NMTC real
estate transactions, makes the following
suggestions:
Determine whether your project(s) is in a
low-income area. You can find this
information on the CDFI Fund website
after first finding the correct census tract
for your project.
Call a NMTC-knowledgeable banker,
lawyer or accountant to see how NMTC’s
could financially benefit your project.
See how you can connect with a current
NMTC allocatee (again listed on the CDFI
Fund website), whether by having your
banker, lawyer or accountant introduce you
and your project, by contacting the
allocatee yourself, or by attending one of
several New Markets Tax Credit conferences.
Read more at
www.newmarketstaxcreditcoalition.org.
Those who want to master all the details
themselves should get the 2005 New
Markets Tax Credit Handbook
www.novoco.com.
In preparing this article, I have been
surprised at how little application this
powerful tool has found in the Twin Cities’
marketplace. Those who have worked with
it are convinced of its effectiveness in
stimulating investment in low-income
areas through its strong benefits to
investors/developers. The program’s
scarcity is probably due to the lack of
available allocations, which may not end
any time soon. But the good news is there
is still time to learn about NMTC and
position yourself and your project to use
the existing allocations or the fresh 2006
allocations that come out in April/May. MSCA And The
Newsletter Committee
W i s h Yo u A n d Yo u r s
A H a p p y N e w Ye a r !
www.msca-online.com
M eBrad
m bSteiner
er Profiles
Title: Relationship Manager
Company: Bremer Bank, N.A.
Education: Finance degree from University of Wisconsin - LaCrosse
Family: Wife, Beth, and daughters Melanie (7) and Katie (5)
Dream Job: Professional race car driver or owner of my own hardware store
or restaurant
Favorite Food: Anything Asian, Mexican, or Spanish
Janele Taveggia, P.E.
Title: Associate, Studio Designer
Education: Bachelor of Civil Engineering from the University of Minnesota
Family: Recently married my husband (Steve) this past November
Secret Talent: Baton twirling (including fire baton)
MSCA Involvement: Member of the Sponsorship Committee
Barnard Joins Northstar Partners
Aaron Barnard has recently joined Northstar
Partners as a retail broker.
Reynolds Joins Ryan Companies
Nick Reynolds has joined Ryan Companies as a
Retail Sales and Leasing Manager. He will be
doing sales and leasing for Ryan owned and
developed projects.
Architectural Consortium LLC
Spalon Montage celebrated its grand opening
on December 1 at the new location on the
second floor of Market Street Station in
Chanhassen. Architectural Consortium LLC
and Lanak Design provided design and
construction documents.
1st Vice President
Jay Scott, Solomon Real Estate Group
2nd Vice President
Bruce Carlson, United Properties
Treasurer
Ken Vinje, Kraus-Anderson Co.
DIRECTORS
Wendy Aaserud, Madison Marquette
Peter Berrie, Faegre & Benson LLP
Cindy MacDonald, Kraus-Anderson Co.
Bill McCrum, Cuningham Group Architecture, P.A.
Stefanie Meyer, United Properties
Anthony Pasko, Bremer Bank, N.A.
Robert Pounds, SCSM, Welsh Companies, LLC
Immediate Past President
Paul Sevenich, CCIM, Kraus-Anderson Co.
COMMITTEE CO-CHAIRS
Awards
Kim Meyer, United Properties
Margaret Jordan, Great Clips, Inc.
Press releases are printed based upon availability
of space and relevance to the local market.
Westwood Professional
Services, Inc.
Westwood Professional Services, Inc. is pleased
to announce the appointment of Dwight Jelle as
president of the firm. Sixteen of Dwight’s 20
years as an engineer have been with Westwood.
Former president, Dennis Marhula, remains on
as CEO. Dennis has been with Westwood for
over 23 years and served as Westwood’s
president from 1992 to 2005.
McGannon Joins Edwards
& Kelcey
Tom McGannon joins Edwards & Kelcey as a
Project Manager of clients for Commercial
Development and Industrial Projects as part of
the Midwest Region in their Minneapolis office.
Search Me
Looking for ways to keep you organized in the New Year and get strategies for a stress free life.
Check the following web sites out to help you stay on task in the New Year.
www.mygoals.com www.flylady.net www.memotome.com www.ehow.com/how_12076_keep-new-years.html www.pickmeupbooks.com/subscribefw.html msca news 2006
President
Sara Stafford, LandAmerica Commercial Services
Secretary
Kevin Krolczyk, Dalbec Roofing
Company: Landform Engineering Company
D eMember
c e mNews
ber
2006 LEADERSHIP
OFFICERS
3
Community Enhancement
Nikki Aden, Faegre & Benson LLP
Shelley Klaessy, Brooks Mall Properties
Golf
Luann Sawochka, Rochon Corporation
Peter Armbrust, United Properties
Legislative
Howard Paster, Paster Enterprises
Todd Johnson, Steiner Development
Marketing and Communications
Tom McGannon, Edwards & Kelcey
Matthew Mock, Braden Construction
Membership
Cynthia Hable, Kraus-Anderson Co.
Sam Smolley, Smolley Consulting Group
Newsletter
Deb Carlson, Northstar Partners LLC
Christopher Naumann, KKE Architects, Inc.
Program
Tom Madsen, Benson-Orth Associates, Inc.
John Tramm, Griffin Companies
Retail Report
Stephanie Carleton, Welsh Companies, LLC
Molly Bird, United Properties
Technology
Cindy MacDonald, Kraus-Anderson Co.
Skip Melin, Colliers Turley Martin Tucker
Sponsorship
Ned Rukavina, United Properties
Bill McCrum, Cuningham Group Architecture, P.A.
MSCA STAFF
Executive Director - Karla Keller Torp
(P) 952-888-3490 (C) 952-292-2414
[email protected]
Associate Director - Stacey Bonine
(P) 952-888-3491 (C) 952-292-2416
[email protected]
8120 Penn Avenue South, Suite 114
Bloomington, MN 55431
(F) 952-888-0000
www.msca-online.com
Consolidation Trepidation
Gift Card Headaches
According to the accounting firm Deloitte and
Touche, a recent survey of nearly 18,000
consumers revealed that almost two-thirds of
American shoppers bought an average of more
than four gift cards each, for the holidays this
holiday season. According to the survey, only
48% of the respondents had actually redeemed
their cards from the previous year.
Since most retailers do not record sales until the
time of redemption, a large influx of cash tends to
appear on the books of retailers who do a large
volume of “pre-sales” using these cards.
Essentially, this causes large amounts of liquid
liability on balance sheets of retailers who “owe”
consumers goods and services not yet redeemed
by gift card recipients. In fact, the Security and
Exchange Commission is currently examining the
practice of questionable retailer accounting
practices due to misrepresentation of gift card
sales. Retailers have reacted by adding expiration
dates or devaluations of unused cards, but some
states are beginning to outlaw such practices with
some states even requiring unused balances of
cards to be turned over to the states.
by Christopher Naumann, KKE Architects, Inc.
The year 2005 was filled with a
frenzy of consolidation activity in the
retail sector.
Saks Inc. sold its northern department
store group for $1.1 billion in cash to
Bon-Ton Stores Inc. Shortly there
after, Saks announced it was selling
its Proffitt’s and McRae’s brand
stores to Belk Inc. for $622 million.
Not to be outdone, The Neiman
Marcus Group was purchased by a
private equity partnership for $5.1
billion. However, the biggest deal of
the year is the $30 billion merger of
Federated Department Stores and the
May Department Store Company.
This merger will bring together some
of the most well known retailing
icons in the nation together into one
family of department stores.
What does this all mean as we enter
the year 2006? Firstly, we should get
used to seeing a significant amount of
2006 Event Schedule
re-branding and repositioning of
store concepts. Federated has already
started the to redefine their retailing
structure by re-branding such
longstanding concepts as Marshall
Field’s, Hecht’s, Filene’s, and
Kaiffmann’s. In their place, the
Federated Macy’s concept will be
expanding to over 850 locations
nationwide.
We also should also expect Federated
to restructure their retailing
operations in order to be more
efficient and better able to adjust to
market trends in merchandise and
fashion apparel. Utilizing similar
models and methods of national big
box retailers, we will be seeing
Federated stores applying new
tracking and shipping methods for
merchandise. By linking technologies
Consolidation continued on page 9
Our monthly program meeting date is the first
Wednesday of every month. All meetings will be
held at 8:00 a.m. (registration at 7:30 a.m.) at the
Sheraton Bloomington Hotel unless otherwise
noted or publicized before the program. Program
topics and location are subject to change.
2006 The Year of the
Plateau
Wednesday, February 1 – Geographic Focus
Wednesday, March 1 – Industry Trends
Thursday, April 6 – Legislative/Business Day
at the Capitol, Location: TBD
Wednesday, May 3 (afternoon) –
Retailer Focus
Wednesday, June 7 – Development
before
AFTER
Phone (952) 894-5111
☺
Fax (952) 894-0687
e-mail: [email protected]
msca news 2006
(Source: Christian Science Monitor)
According to Economists, the housing
market will be a key indicator to the
performance of the United States
economy in 2006. Since late 2001,
the national housing market has been
on fire, with record-breaking housing
starts and sales. Fueled by record low
interest rates, activity has increased
real estate values nationwide. Many
new consumers entered the housing
market or refinanced their existing
mortgages. The added income from
home this home equity and
refinancing added to consumers
discretionary spending and in-turn
consumer spending across the board
has been high.
Unfortunately, this economic nirvana
will not last. Some forecasts predict
4
that if interest rates increase ate their
current levels and the real estate
market slows, the nation’s economic
growth rate could be halved as early
as 2007. Real estate sales and home
construction will certainly slow down
and consumers will have less and less
income available for spending.
Inevitably this will impact the
retailing industry.
Although most economists agree a
slowdown in growth will happen this
year, there is some debate over how
severe it will be. One thing is certain,
2006 will offer some sort of cooling
from the pace we have become
accustomed to. The year of the
plateau has arrived.
www.msca-online.com
President’s Letter
Welcome to 2006! We
have an exciting year
planned and I invite you
to join in the festivities.
You won’t want to miss
our great line up of
monthly programs.
Where else can you take
advantage of excellent networking
opportunities while qualifying for
continuing education credits?
About the STARRSM Awards
The MSCA’s Year End Ceremonies, Shopping Center Tribute Awards for Retail Real
Estate Awards and Holiday Party were held December 6, 2005, at Midland Hills
Country Club in St. Paul. Over 280 members and guests attended the evening event.
The annual MSCA STARRSM Awards honor outstanding projects and extraordinary
individuals in the retail and shopping center industry.
MSCA is a fabulous resource for
anyone involved in the retail real estate
industry. Our diverse membership,
consisting of developers, shopping
center owners, brokers, property
managers, retailers, attorneys, architects, contractors, title insurance
companies, etc. is exploding – the
highest in our 17 year history. We
currently have 676 members and know
we will surpass the 700 mark in 2006.
There are many opportunities to get
involved. Whether it be on the golf,
legislative, marketing or program
committees, did you know that there are
11 different committees where you can
serve? It’s easy, just pick one of the
many committees that best suits your
interests and jump in. I challenge you to
get involved…and make a difference.
You won’t be disappointed as you will
find the rewards to be satisfying, both
professionally as well as personally.
2005 Committee
Members
2005 STARRSM Awards
Judges
Front row (left to right):
Kim Meyer ~ Robert Muir Company
Jeff Blackwell ~ RLK-Kuusisto Ltd.
Margaret Jordan ~ Great Clips, Inc.
Sara Stafford ~ LandAmerica
Commercial Services
left to right
Tom Moorse ~ HTG Architects
Laurie Paquette ~ General Growth
Properties, Inc.
Steve Eggert ~ Target Corporation
Laura Ramme Giertson ~ LRG, LLC
Hans Rasmussen ~ Opus Northwest
LLC
Kris Schisel ~ Welsh Companies, LLC
Back row (left to right):
Bill McCrum ~ Cuningham Group
Architecture, P.A.
Ronn Thomas ~ United Properties
Dan Parks ~ Westwood Professional
Services, Inc.
Peter Lund ~ The Cornerstone Group
Brett Christofferson ~ Weis Builders,
Inc.
Not pictured:
Anthony Pasko ~ Bremer Bank
I encourage you to do business with
fellow members.
Cheers to 2006,
Not pictured:
Tricia Pitchford ~ United Properties
Mike Sims ~ United Properties
msca news 2006
Thank you for believing in me to serve
as your 2006 president. It is an honor to
be surrounded with a very talented team
of officers, board of directors, committee co-chairs, and the many volunteers
that contribute to the success of the
organization. In addition, we wouldn’t
be where we are today without the
commitment, dedication and expertise of
Karla Keller Torp, Executive Director
and Stacey Bonine, Associate Director.
Their passion for serving all of you is
truly remarkable.
Sara Stafford
LandAmerica Commercial Services
2006 MSCA President
5
www.msca-online.com
Interior Design: Restaurant/Food Service
Tryg’s Restaurant ~ Minneapolis
Owner:
Architect/Designer:
Contractor:
Consultants:
Nominees:
Tryg’s Restaurant
Tryg Truelson
Shea, Inc.
Zeman Construction
Mattson Macdonald
Buffalo Wild Wings Grill and Bar, Maplewood ~
Stahl Construction Company
Caribou Coffee, Moundsview ~ Paster Enterprises
DQ Grill & Chill, MSP Airport ~ Architectural Alliance
French Meadow Bakery and Café, MSP Airport ~ RSP Architects
Kozy Restaurant, Edina ~ Shea, Inc.
Northern Lights Grill, MSP Airport ~ RSP Architects
Sköl Café & Bar, MSP Airport ~ Morcon Construction
Interior Design: Retail/Non-Food Service
Kowalski’s Market ~ Lakeville
Owner:
Architect/Designer:
Contractor:
Nominee:
Kowalski’s Market
Paster Enterprises
Gorski & Associates / Harriss Architects
Zeman Construction
LIV Aveda Salon and Spa, Mankato ~ Paulsen Architects
Design & Aesthetics: Retail under 50,000 S.F.
Market Street Station ~ Chanhassen
Owner:
Developer:
Architect:
Contractor:
Consultants:
Market Street Station
Market Street Station, LLC
Kraus-Anderson Realty Company
Bentz/Thomspson/Rietow, Inc.
Kraus-Anderson Midwest Division
Dahlgren Shardlow and Uban / Lan-De-Con Inc. /
Doody Mechanical / Weber Electric, Inc. / BKBM Engineers
Leasing: Kraus-Anderson Companies
Nominees: Minnesota!, MSP Airport ~ Architectural Alliance
Radio Road, MSP Airport ~ Architectural Alliance
Rosemount Crossing, Rosemount ~ Steiner Development, Inc.
Tamarack Village Expansion, Woodbury ~ Robert Muir Company
Design & Aesthetics: Retail 50,000 - 250,000 S.F.
Nicollet Plaza ~ Burnsville
Owner:
Developer:
Architect:
Nominees:
Nicollet Plaza
H.J. Development, Inc.
Opus Northwest LLC / Klingelhutz Residential Partners
KKE Architects, Inc.
Argonne Village, Lakeville ~ Weis Builders, Inc.
Lakeville Crossing Phase II, Lakeville ~ Paster Enterprises
Shoppes at Lyndale Green, Bloomington ~ United Properties
The Shoppes of Oak Park, Oak Park Heights ~
Solomon Real Estate Group
Design & Aesthetics: Shopping Centers Over 250,000 S.F.
Silver Lake Village ~ St. Anthony
Owner & Developer:
Architect:
Contractor:
Consultants:
Silver Lake Village
msca news 2006
Robert Muir Company
Architectural Consortium LLC / KKE Architects, Inc.
Muir-Doran Construction / Weis Builders, Inc. (Wal-Mart)
Anderson-Urlacher, P.A. / URS /
W.J. Sutherland and Associates, Inc.
Leasing: Robert Muir Company
Nominee: Woodbury Commons, Woodbury ~Robert Muir Company
6
www.msca-online.com
Development
Process
Design & Aesthetics:
Argonne
Village over
~ Lakeville
Shopping
Centers
250,000 sf
Owner & Developer: United
PropertiesVillage ~ Coon Rapids
Riverdale
Riverdale
Argonne Village
Village
Architect: KKE Architects, Inc. / Architectural Consortium LLC
Owner: Macquarie DDR Trust (MDT)
Contractor:
Properties
/ Weis Builders,
Inc.
Developer: United
Developers
Diversified
Realty Corporation
Consultants:
Westwood
Professional
Services,
Inc.
Architect: KKE Architects, Inc.
Contractor:
J.E. Dunn
– North Central
Leasing: United
Properties
Consultants:
Westwood
Professional
Services
Nominees: Shoppes at Lyndale
Green,
Bloomington ~ United Properties
Anderson-Urlacher,
P.A.
Silver Lake Village, St. Anthony ~ Robert Muir Company
Leasing: Developers Diversified Realty Corporation
Photography: PhilipRenovation
Prowse Photography
/ Remodel
Crystal Shopping Center ~ Crystal
Development Process:
Crystal Shopping Center
Crossroads Center Expansion
Shoppes at Lyndale Green
Famous Dave’s BBQ/
Kokomo’s Island Cafe
Fulton Lofts
Liberty Frozen Custard
Congratulations!
Thank you for your
dedication and for
enhancing our industry.
msca news 2006
Owner & Developer: Paster Enterprises
Crossroads Center Expansion ~ St. Cloud
Architect: KKE Architects, Inc.
Owner: Weis
General
Growth
Contractor:
Builders,
Inc.Properties, Inc.
Developer: General Growth Properties, Inc.
Consultants:
Associates
Architect: Nelson-Rudie
KKE Architects,
Inc. / RLK-Kuusisto Ltd.
Leasing:
Paster
Enterprises
Contractor: VCC
Nominees: Lupient
GMC
Pontiac, Golden Valley ~
Consultants:
Meyer Buick
Borgman
Johnson
Midwest
Maintenance
Michaud
Cooley
Erickson & Mechanical, Inc.
Minneapolis
City Center, Minneapolis ~
Schuler Shook
Brookfield
PropertiesServices
(US) LLC
Westwood
Professional
Rockford
~ Welsh
Leasing: Rockford
General Mall,
Growth
Properties,
Inc. Companies, LLC
Rivertown Village, St. Cloud ~ Robert Muir Company
Nominees: Mound Marketplace, Mound ~ Mound Marketplace LLC
South Fork Plaza, Lakeville ~ Welsh Companies, LLC
Southwest Station, Eden Prairie ~ North American Properties
South Lake Village Shopping Center, Prior Lake ~
Suntide
Commercial/Realty
Renovation
Remodel:
Southdale Square Shopping Center, Richfield ~
Famous Dave’sMadison
BBQ/Kokomo’s
Marquette Island Cafe ~ Bloomington
Owner: Two
TimRivers
and Pat
Buffman
Place,
Mankato ~ Paulsen Architects
Architect: RSP Architects
Redevelopment
Contractor: Zeman Construction
Shoppes
at
Lyndale
Green ~ Bloomington
Weber Electric
Yale Mechanical
Owner & Developer: United
Properties
Dakota
Plumbing
Architect: Design
Group
Services / Planmark / JSSH
Consultants:
Ericksen
Roed
AssociatesBuilding Corporation /
Contractor: United Properties&/ Copeland
Apropos
Weis Builders, Inc.
Shuler Shook
Consultants: Architectural
Consortium, LLC / Brauer & Associates
Themescapes
Leasing: United Properties
Nominees: Target, Crystal ~ J.E. Dunn – North Central
Additional: MSA
Environmental
Consulting
/ Bloomington
HRA
Yorkdale
Shoppes, Edina
~ KKE
Architects, Inc.
Nominees: Menards - Midway, St. Paul ~ Kraus-Anderson Construction Co.
MinneapolisRedevelopment:
City Center, Minneapolis ~
Brookfield
Properties
(US)
LLC
Liberty Frozen
Custard
~ Minneapolis
University Square Development, Mankato ~ Paulsen Architects
Owner: Woodbury
Vicky andCommons,
Steve UhrWoodbury ~ Robert Muir Company
Architect: KKE Architects, Inc.
Mixed-Use
Contractor: Watson-Forsberg
Co.
Fulton Lofts P.A.
~ Minneapolis
Consultants: Anderson-Urlacher,
th
Owner:
3100
50
Street
Developers
Nominees: Foley Plaza, Coon RapidsLLC
~ Gaughan Properties
Lofts, Hopkins
~ Kohnstamm
Communications
Developer/Contractor: Marketplace
Master: Engineering,
Real Estate
& Construction
Consultant/Leasing: Master: Engineering, Real Estate & Construction
Architect: Tushie Montgomery
Nominees: Hiawatha Square, Minneapolis ~
Master: Engineering, Real Estate & Construction
Market
Station, Chanhassen ~ Kraus-Anderson Companies
Thank you for your Street
dedication
Shoppes at Lyndale Green, Bloomington ~ United Properties
and for enhancing
ourVillage,
industry.
Silver Lake
St. Anthony ~ Robert Muir Company
Congratulations!
7
www.msca-online.com
Individual Awards
Thank you to our
2005 Corporate Sponsors
Shining STARRSM
Adolfson & Peterson Construction
The Avalon Group
Barna, Guzy & Steffen, Ltd.
Bremer Bank, N.A.
Brookfield Properties (US) LLC
The Business Journal
CB Richard Ellis
CSM Corporation
Cambridge Commercial Realty
Colliers Turley Martin Tucker
The Collyard Group L.L.C.
Commercial Partners Title, LLC
Cuningham Group Architecture, P.A.
Dalbec Roofing
Exeter Realty Company
Faegre & Benson LLP
Fantastic Sams
General Growth Properties, Inc.
Gray Plant Mooty
Great Clips, Inc.
H.J. Development, Inc.
Heitman Financial Services LLC
J.E. Dunn – North Central
J.L. Sullivan Construction, Inc.
Jones Lang LaSalle
KKE Architects, Inc.
Kraus-Anderson Companies
LandAmerica Commercial Services
Landform
Larkin Hoffman Daly & Lindgren Ltd.
LaSalle Bank N.A.
M & I Bank
Madison Marquette
Messerli & Kramer, P.A.
Midwest Maintenance & Mechanical, Inc.
NorthMarq Capital, Inc.
Northtown Mall/ Glimcher Properties
Oppidan, Inc.
Opus Northwest, L.L.C.
Park Midwest Commercial Real Estate
Paster Enterprises, LLC
RLK-Kuusisto Ltd.
RSM McGladrey, Inc.
RSP Architects
Reliance Development Company, LLP
Robert Muir Company
Ryan Companies US, Inc.
SUPERVALU INC.
Target Corporation
TCF National Bank Minnesota
Towle Financial Services
U.S. Bank
United Properties
Venture Mortgage Corporation
Weis Builders, Inc.
Wells Fargo Bank, N.A.
Welsh Companies, LLC
Westwood Professional Services, Inc.
Tedd Schuster
Madison Marquette
Nominated Project:
Southdale Square Shopping
Center ~ Richfield
Award of Excellence
Mike Scott
United Properties
Committee Members
of the Year
Cynthia Hable
Kraus-Anderson
Companies
Tom Madsen
Benson-Orth Associates,
Inc.
Member of the Year
Bill McCrum
Cuningham Group
Architecture, P.A.
msca news 2006
8
www.msca-online.com
CONSOLIDATION
2006 Store
Openings/Closings
Opening
Dollar General
Costco
Casual Corner
Target
Wal-Mart
Super
Discount
Neighborhood
Sam’s
International
Federated
Jos. A. Banks
Kohl’s
Circuit City
Walgreen’s
CVS
Lowe’s
Closing
800
28-30
525
110
550-600
270-280
20-30
15-20
30-40
220-230
6
50-65
200
25-30
475
275-300
150
Bookmark
Looking to revamp your financial
portfolio for 2006?
How to Get in and Out of the Market
with Huge Gains in any Climate by J.
Christopher Amberger. The trading
systems explained in this book have
perhaps the best track record in the
industry, and found nowhere else. They
use a combination of analytical
components, focusing on trading, as
opposed to investing and are all about
hard-core technical analysis.
continued
to stores will allow consumers access to
merchandise and fashion apparel in very
efficient cycles. This will allow stores to
follow fashion and seasonal trends in a
very effective manner. No longer will
some department store concepts be
wrestling with winter overstock in August.
No longer will we see the stale fashion
sense stigma of older, larger department
stores. Federated believes that with this
merger, it will become a leaner and meaner
retailing force with significant impact on
the entire industry.
The consolidation that has occurred with
retailers in the past year will not just cause
adjustments to brands and operations. As
these deals become solidified, store
concepts may be closed, or completely
absorbed by competitors. Companies will
be consolidating spaces, relocating staff,
and tweaking their operations. We may see
locations go dark or concepts simply
vanish. We may even see new concept
hybrids emerge with new stores or
renovations. We might even be witnessing
the re-birth of the great department store
becoming, once again, centric to the
retailing industry as a whole. Regardless,
department stores are currently reeling a
bit from the tumultuous atmosphere of
consolidation that was experienced in 2005
and we will continue feeling the
impact not only this year, but for many
years to come.
Top 10 Largest Shopping Centers in the Twin Cities
(as published by the Mpls/St. Paul Business Journal)
Mall of America: 2,789,000 sf; 96.7% occupied (Simon Debartolo)
Southdale Center: 1,400,000 sf; 100% occupied (The Mills)
Eden Prairie Center: 1,151,000 sf; 87.62% occupied (General Growth)
Burnsville Center: 1,056,000 sf; 98.47% occupied (CBL & Assoc Properties)
Ridgedale Center: 1,044,000 sf; 97.89% occupied (Ridgedale Shopping Center)
Brookdale Center: 1,013,157 sf; 62.46% occupied (Austin & Associates)
Northtown Mall: 976,239 sf; 71.52% occupied (Glimcher Properties)
Rosedale Shopping Center: 970,000 sf; 94% occupied (Jones Lang LaSalle)
Maplewood Mall: 913,000 sf; 92% occupied (NP)
Riverdale Village: 872,507 sf; 100% occupied (Developers Diversified Realty)
Top Biggest Real Estate Sales for Retail Centers
(as published by the Mpls/St. Paul Business Journal)
Out of the top 25 commercial real estate sales (ranked by sale price) that occured in
2004, three of the transactions were retail properties:
Bull Market: Tracking Todays Hottest
Investments by Dan Denning. A
personal road map to making big
money in the days ahead, detailing
exactly where you should be looking,
what you should be looking for (or
avoiding) and why.
No. 16: Birch Run Station, Maplewood
Tenants: JoAnn Etc, Marshalls, Office Max, Burlington Coat Factory
$26,360,000
No. 19: Rosedale Square, Rosedale
Tenants: Byerlys, Office Depot
$25,214,000
No. 25: Ridgehaven Mall
Tenants: Byerlys, Barnes & Noble
$20,000,000
The Demise of the Dollar: And Why It’s
Great for Your Investments by Addison
Wiggen. This book explores why the
dollar is in its current state, laying out
methods in which investors must adjust
their portfolios for successful results.
Rents and Vacancies 2006
Contact Deb Carlson at
[email protected] with
your reading recommendation.
msca news 2006
Shopping Centers Today reported in December that retail vacancies in the United
States will drop to an average of 8.8% in 2006. They also report that rent grown will
increase to 3.5% this next year. According to the Marcus and Millichap’s retail group,
tenant demand is driving 70% of developments planned for 2006. Cap rates are
predicted to remain at all time lows between 6 -7.5%. Retail values are predicted to
increase between 8-10%, about half the average 20% increase that occurred in 2005.
9
www.msca-online.com
M aRoseville
r k e t Rejuvenation
Update
by Sara Martin, Welsh Companies, LLC
I
n a metro area ripe with many
significant redevelopment projects, the
Rosedale Mall trade area has remained
one of the strongest in the region. Low
vacancy and high traffic has kept this trade
area among the most active, sought after in
the Twin Cities with more than 12 million
shoppers visiting the mall each year. For
years, Roseville has been a competitive
trade area with little to no new
development and very few opportunities
for new retailers to find space, but all that
is about to change with the addition of two
large projects that will significantly alter
this trade area as we know it today.
The first major project in the works is the
complete redevelopment of the 185,000 sf
former Mervyn’s wing of the Rosedale
Mall. A lifestyle center addition known as
“The Plaza at Rosedale Center” is
currently under construction and expected
to open in the fall of 2006. The project,
under development by Prime Property
Fund, is projected to cost more than $50
million and will include two stories of
outward facing storefronts that will be a
combination of entertainment and upscale
retailers. The Plaza at Rosedale Center will
be the first super regional shopping center
in the Twin Cities trade area to combine
entertainment, lifestyle and fashion
retailers in an open-air, mixed-use style
design. Convenience and easy pedestrian
access between the Center and Plaza are at
the heart of the project’s design. AMC
Theaters signed on as Prime Property
Fund’s first tenant for occupancy in August
of 2006 and is expected to bring a 14screen state of the art theater. The only
other tenant that has been announced at
this time is Granite City Food & Brewery,
a premier casual dining restaurant, which
will also be a great addition to The Plaza.
(residential) and a Roseville Properties
Affiliate, which is jointly owned by Daniel
Commers, John Johannson and Chris
Simmons. The project will consist of 940
housing units, 350,000 sf of retail space
and 280,000 sf of office space. The
housing component of the development
offers major relief to Roseville. While the
city is among the most dense and highly
profitable retail centers in the region,
Roseville currently has very limited
housing options and is in desperate need of
more space for small businesses. The retail
portion of the project will be anchored by
Costco and will include a good mix of
junior anchors and restaurants as well as
60,000 sf of small shop space.
The second new addition to the Roseville
landscape is the new 70-acre Twin Lakes
development, expected to break ground in
the spring of 2006. This mixed-use
development is bordered by County Road
C2 at the North, County Road C at the
South, Cleveland Avenue at the West and
Fairview Avenue at the East. Twin Lakes is
a joint development by Rottlund Homes
Given the historical high demand and high
volume of the Roseville trade area, these
new developments seem long overdue and
a welcome addition to the region.
Moreover, with several large tenants
signed on to the projects and a long list of
retailers who have been unable to find
space to break into the area in recent years,
both projects seem poised for success. R i The
s i nFitness
g SFrenzy
tar
by Betty Ewens, CLS, Kraus-Anderson Companies
I
t’s a new year and a great time for new
resolutions. One of mine is to shape up
and shed those holiday pounds. I don’t
need to go very far to find help. In my
neighborhood alone, at least two new clubs
have opened up within blocks of my home.
No frills exercise clubs conveniently
located in our neighborhoods are the
steady gainers this year.
Anytime Fitness is one of the newest
players in this field. Based in West St.
Paul, Anytime Fitness began in 2002 and
is now ranked 10th in the top 25 chains,
according to the International Health,
Racquet, & Sportsclub Association.
Founders Jeff Klinger and Chuck Runyon
msca news 2006
see nothing but growth ahead for this
franchise. They currently have over 60
centers either open or coming soon in
Minnesota alone and have close to quadruple that number of locations nationally.
Snap Fitness is another Minnesota-based
franchise with approximately 50 club
locations in the Twin Cities as well as
outstate Minnesota. They also feature 24/7
access by security card to ensure that busy
members can work out at all hours.
Founder Peter Taunton expects to continue
to open 5 to 7 new sites monthly through
Minnesota and nationally, looking
primarily for neighborhood center class
“B” locations.
10
Liberty Fitness, a nationally franchised
women’s exercise concept, is just about to
open its first Minnesota club in
Chanhassen, and more stores are planned
in Minnesota in the near future. Liberty
Fitness received a ranking in the top 50
new franchises in 2005 by Entrepreneur
Magazine. Founded by Liberty Harper, a
25-year-old entrepreneur, the club focuses
on a total body approach consisting of
fitness, nutrition, and wellness for women.
www.anytimefitness.com www.snapfitness.com www.libertyfitness.com www.msca-online.com
Around
the Marketplace
Retail Tidbits
compiled by Tim Hilger, Diversified Acquisitions, Inc.
● Private equity firms are advising
McDonald’s that it has huge undervalued
asset values hidden in real estate holdings.
These large investors want it to free up
some of these assets, estimated at $24
billion, by selling them through the
sale/leaseback process. Counting this
argument are others who believe that the
added rental expense will be at a higher
rate than McDonald’s ability to borrow at
lower rates.
● H&M trivia factoids: H&M stands for
Hennes & Mauritz; the name Hennes is
Swedish for “her”; home base is
Stockholm Sweden; founded in 1947 as a
women’s apparel store; it went coed in
1968; the founder’s son and present CEO
msca news 2006
is Stefan Persson and is one of the 50
richest people in the world; 1,100 + stores
world wide in 22 countries and 84 stores in
the U.S; 100 in-house designers create all
their fashions; sales exceed $6 billion
annually; nickname is “the Ikea of
clothing”; first Minnesota store is in the
Mall of America.
●
The Dayton Department Store name is
gone and soon to follow is the Marshall
Field’s name. Here are some factoid:
George Dayton was initially a merchant
banker not a retailer; the famous
Westminster Church first located at the site
where Marshall Field’s store is presently
located in Minneapolis; the church burned,
then relocated to its present location on
11
12th Street; George Dayton was asked to
buy the land, which he did; he bought out a
“dry-goods” retailer and opened a three story
department store in 1902 that flourished.
●
Marshall Field’s factoids: founded by
Marshall Field who entered retailing in 1852
in Chicago; at one point he had 2 other
partners; first store called Field, Palmer
and Leiter located on State Street; burned
in the great Chicago fire of 1871; operated
in a temporary building for eight years; the
new store opened on State Street site of the
present store; across State Street from the
main department Field operated a 20 story,
400,000 sf Store for Men; you could buy
golf clubs or a gun and test fire it in one of
the store’s three basement rifle ranges.
www.msca-online.com
“Lock” your low, long - term interest rate
today for up to 18 months until funding!!!
Offering over 40 years financing experience
for all types of commercial property. Over
$50.0 million in retail transactions in 2005!
Contact Jon or Ross
Dahlin @ 952-886-0944
Or visit www.itascafunding.com
MSCA 2006
Program Schedule
SEE INSERT!
Minnesota Shopping Center Association
8120 Penn Avenue South, Suite 114
Bloomington, MN 55431