Laurence C. Siegel has walked a lot of malls. In the decade that he has been chairman and chief executive officer of The Mills Corp., the Virginia-based company has grown from 6.7 million square feet of shopping space to more than 50 million square feet.
Turns out the arrangement came about when Iron City Beer maker Pittsburgh Brewing Co. recruited the homegrown sandwich chain to be part of a gift shop. Scott Sarti, group vice president of leasing, is hoping it will lead to another deal landing what arguably is the city's most well-known culinary treat. "If enough people go into the store and bug the employees," he said, maybe Primanti's will bring the food.
These men in dark suits walk the mall with a different view than the moms with strollers and the retired couples drawn by the seemingly never-ending grand opening hoopla that, on this particular day last week, included visits from PBS star Mr. McFeeley of "Mister Rogers' Neighborhood," Steelers quarterback Ben Roethlisberger and singer Amy Grant.
The executives are eager to offer insight into the sometimes awkward, definitely different mix of stores laid out in a racetrack-style loop that has a few Pittsburghers just as puzzled as Siegel was about the Primanti sandwich menu board. "What I'm hoping happens is that this becomes not only a fun, interesting ... place to be and spend a day but it also becomes a convenience," said Siegel, adding that when all the free-standing stores now under construction next to the mall open, this could be the biggest concentration of shopping on one site in the region.
That particular point is, at various moments, repeated by more than one of the mall executives, and is clearly an official "talking point." Of course, anyone willing to travel up and down Business Route 22 that cuts through Wilkins and Monroeville or McKnight Road in the North Hills has access to plenty of stores.
But, technically, that does require leaving one site to go to another.
Mills officials, who came into this long-delayed development project midstream and opted to open it in July when only about 80 percent of the corridor space for smaller stores was opened or leased, giving it a somewhat unfinished feeling, did not bring in the outlet stores often associated with its developments. Instead, they tried to blend traditional, already committed anchors such as Kaufmann's and J.C. Penney with such entertainment operators as a high-end bowling alley with dress code and an Imax theater.
The work in progress is getting closer to completion. About 90 percent of the stores are now either open, signed or committed to coming, Siegel said. But the leasing challenges continue, particularly the big picture stuff out of a leasing team's control.
For example, Siegel stops to gesture toward the still-shuttered site being held for a new Sears Grand store, now slated to open in early November. "This would have opened with the shopping center but for a merger between Sears and Kmart," he said.
Moreover, the Children's Place chain moved to acquire the Disney stores in the middle of negotiations for a Pittsburgh Mills site, delaying Disney's arrival. And to those who wonder why that mall staple, The Gap, is not in this mall, well, the leasing team expects it will arrive soon. Sites have already been built to the retailer's specifications.
The strategy of grouping stores by merchandise and customer area -- American Eagle Outfitters, Forever 21 and H&M, or Hennes & Mauritz, are all huddled together to create a haven for the clothing-hungry young -- can mean being forced to wait for the right deals. Soon, the executives said, a Men's Wearhouse will be joined by Brooks Brothers outlet on the southern side of the mall.
Mall sales overall were strong the first month, slipped a bit toward the end of August and now have started to pick up again, said Siegel. In about 24 months, he expects sales to be in the mid-$300-per-square-foot range; he said he would be "disappointed after five years or so if it's not in the low $400s." Ross Park Mall's owner, Simon Property Group, boasts that sales per square foot there exceed $400 (per year), the highest of the major regional malls in Allegheny County,
Mills has not limited its income generation to mall sales. Another tool is selling sponsorships. Alle-Kiski Medical Center, in Natrona Heights, sponsors Neighborhood #4, where the food court sits. Nick Chevrolet Pontiac, of Tarentum, is the official sponsor of the Sports Neighborhood, anchored by Dick's Sporting Goods.
Siegel sees the sponsors as generating activity in the corridors by hosting events, not to mention extra income. He expects more such deals in the next three to four years.
Pittsburgh Mills is just a small piece of the portfolio, and the company has much more glamorous projects under way in such places as New Jersey and Italy. But it adds up. In the most recent quarter, the company reported a loss of $19.3 million, in line with analysts' expectations, vs. a gain of $24.5 million in the year-ago period. It blamed some of the decline on currency exchange losses but said sales were up.
Siegel acknowledges opportunities for new development are not as plentiful as they once were, so the company is getting more creative. "There are a lot of very good acquisition opportunities out there," he said, plunging into an enthusiastic description of existing malls in Minnesota and California that Mills bought with plans to pour millions of dollars into renovating.
As the chairman moved on to the next event on his power visit, leasing executives will keep working on the right mix to get area residents to change ingrained shopping habits.
Maybe they will do a deal with for an H.J. Heinz Co. gift shop, although a year of talking with the Pittsburgh ketchup company did not get them too far.
They plan to keep bugging the Primanti operators, an effort that Philadelphia native Siegel supports. He admitted that he had eaten at the restaurant in the wee hours back when he was a college student visiting friends at the University of Pittsburgh.