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Developers hope to put outlet mall near Meadows
Sunday, April 03, 2005

Steve Tanger and his real estate people spent five years narrowing down where they wanted to build a new outlet mall in southwestern Pennsylvania.


Breaking ground:
Development in
and around Pittsburgh

Darrell Sapp, Post-Gazette
Construction work continues at the top of the new Del Monte building, along North Shore Drive. The $40 million building will house Del Monte's regional headquarters.
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Not Cranberry -- too close to Grove City's established outlet mall. Not east, where a small outlet mall in Somerset struggled, in part, because of the toll road. Not where it would not be visible from the highway. Not where there was no clover-leaf interchange. Not in West Virginia, where the North Carolina-based developer saw little call for an outlet mall.

Where they finally settled was 122 acres just off Interstate 79 near the Meadows harness racing track in Washington County, a location that is still a bit up in the air. Tanger says he needs tax-increment financing to make a go of it, and expects to know within three months whether the various government bodies will sign off on the deal. He said he has not looked for a back-up site.

The choice of the site by Tanger Factory Outlets Centers Inc. both delighted and dismayed Washington County residents. Some predict benefits will come from an explosion of long-predicted development near the racetrack, while others envision overloaded roads and public services strained further by shifting tax revenues to help pay for the requisite infrastructure improvements at the site.

Whether to its benefit or detriment in the public relations battle, Tanger's 420,000 square-foot project comes as the Meadows track is poised to add slots to its gambling options and as Missouri outdoor Bass Pro Shops has scoped out a 210-acre spot next to the proposed outlet center for a 225,000-square-foot outdoor store and lodge. The Victory Centre development, as it is being called, also would include restaurants and a hotel.

Tanger, chief operating officer of the company that carries his family name, claims to be thrilled with Bass Pro's arrival because the two tend to attract different, but complementary, shoppers. The outdoor store, with its guns, boats, aquariums and fly-fishing workshops, should keep the men in the family busy while the women shop the outlets. A nonshopping spouse can be a real drag on impulse sales.

Yet the confluence of projects and the dollar signs involved also has escalated the attention they are receiving. That can be good for the projects when it means the governor's office is supporting funding for road improvements. But it can hurt by stirring up potential opponents, such as a citizens group -- Citizens Against Tax Increment Financing -- that is raising questions and distributing petitions on a Web site, www.catif.info.

The nonpartisan Washington County Redevelopment Authority is now running the numbers to define what using tax-increment financing, or a TIF, would mean to Washington County, South Strabane and the Trinity Area School District, all of which will vote on the request.

Tax-increment financing generally commits a community to devote new property tax revenue generated by a development to pay for the infrastructure, such as roads, power and sewer lines, that make the development possible. Most TIFs are imposed for a limited number of years, and are linked to the increased property values only -- not the wage income and other sources of tax revenue that also are generated by new projects.

Both Tanger and Bass Pro officials have said they will not do the projects without the financing and warn the region will lose jobs and tourism dollars. In an echo of arguments heard against past TIF deals around the region, opponents argue the companies should be able to do their projects without public help. Data gathering is likely to take a month or two, said William McGowan, executive director of the redevelopment authority.

Though the decision will be a local one, if the Tanger Outlets and the Bass Pro projects get the go-ahead to open by late 2006 or early 2007, it will reverberate across both county and state lines.

Bass Pro rival Cabela's last year opened a 175,000-square-foot store and new distribution center, with considerable public funding support, off a new Interstate 70 exit five miles past the Pennsylvania border in West Virginia.

Another massive outdoor store with all the bells and bird calls in Washington County would likely cut into traffic coming to Cabela's from Pennsylvania, said CB Richard Ellis/Pittsburgh retail real estate broker Steven Esposito. "I don't see why anybody would drive past Bass Pro to go to Cabela's."

West Virginia officials a few years ago had discussed trying to put an outlet mall in Wheeling, or perhaps putting outlet stores near Cabela's. Now plans call for putting stores such as Wal-Mart and Home Depot near the massive outdoor sporting goods store.

Tanger said the tenants that fill his company's shopping centers did not want to go that far away from Pittsburgh. Outlet stores are run by manufacturers who often have excess goods to sell or are seeking additional sales for their brand. They do not want to open a lot of stores, just strategically placed ones.

"We're doing this for the Pittsburgh market," he said. "The Pittsburgh market is robust and, in our opinion, vastly under-retailed with factory outlets."

The manufacturers would not have accepted a Cranberry site, he said, because they may sell goods at the Prime Outlets at Grove City. That 140-plus store shopping center, opened a decade ago, is regularly rated as one of the top 20 outlet centers in the country by trade magazine Value Retail News.

A Washington County outlet mall also would draw away customers, but Tanger estimates less than 50 percent of the Grove City mall's customers come from the Pittsburgh area, with the rest driving from Ohio or coming from the north or east, perhaps along Route 80.

The owners of Prime Outlets -- a New Jersey company called The Lightstone Group -- are paying attention to the developments to the south but counting on their center's ability to continue to draw bus loads of customers who like driving out to the country for a change. Sales last year rose 4 percent for the center, said Carmen DeRose, the mall's general manager, and 4.7 million people walked through.

One advantage to being outside heavily developed areas, DeRose said, is that Prime Outlets owns quite a bit of undeveloped land, making future expansion easy and likely.

In fact, the site that Tanger is now so committed to probably would not have been even on the long list of potential locations for an outlet mall 25 years ago. In the initial outlet mall boom, manufacturers wanted the stores between 25 and 50 miles away from the department stores that sold the same brands at full price, which is a big reason why so many seem to just sort of pop up out of nowhere along major highways.

Washington County's project would be about 10 to 15 miles away from the nearest mall, he said, and that is acceptable now that manufacturers are convinced shoppers use the two retail formats differently. "We've learned to live side by side with department stores," Tanger said.

Tanger estimates its customers drive an average of 75 miles to get to its centers, while Grove City calculates people come from 60 miles away.

Though another outlet mall operator, Virginia-based Mills Corp., is preparing to open a new mall just to the northeast of Pittsburgh, the focus there will be full-line stores and neither Tanger nor the Grove City staff consider that direct competition.

First published on April 3, 2005 at 12:00 am
Teresa Lindeman can be reached at tlindeman@post-gazette.com or 412-263-2018.
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