Corporate News | Chouteau | Kennedy | Papillion | State Line

JANUARY 18, 2001

Papillion Mall's Developers Respected

On paper, the plans for Papillion Gardens Mall look great.

Five large anchor stores. Upscale retailers and maybe an ice rink. Spots surrounding the mall for places like a grocery and restaurants. In all, 118 acres of shopping pleasure wrapped in a $150 million package.

So far, it's just paper.

But the developers behind Papillion Gardens have proven they can make their shopping dreams come true, from three SuperTargets in the Kansas City area to Florida's luxurious Gardens of the Palm Beaches mall.

They also have faced a few problems turning paper plans into cash receipts. Plans for another Palm Beach County mall fell to a competing proposal. In Bellevue, the Kennedy Center proposal so far features only a mound of dirt after a mess of controversy.

Papillion Gardens is on its way after two years of planning, the developers say, and three major tenants are almost ready to sign on.

"I have been just thrilled with what's happened over the last two years," said developer Dick Hanor of Boca Raton, Fla. "It's amazing. There is no question about the desirability of this mall. None."

Set to locate southwest of 72nd Street and Nebraska Highway 370, Papillion Gardens would be the city's largest development ever. The City of Papillion, having approved part of the plans, could make final decisions in March.

The project still has hurdles to overcome. The Army Corps of Engineers will weigh in, and a decision from the city and the Nebraska Roads Department on an intersection into the mall has the potential to end the project.

In addition, mall proposals have come and gone before in Sarpy County. And outside Papillion, not all are convinced the latest idea will work.

As the review proceeds, the developers are pitching their ideas to stores, something the partners have done before.

Hanor calls himself one of two independent mall developers nationwide. In the Papillion Gardens project, he is joined by Jeff Peterson and Mike Hardy, shopping center developers from the Overland Park, Kan.-based Hardy Peterson Retail Group. Duane Soltau, a fourth developer who handled real estate for Dayton Hudson, died this month, but his sons will claim his duties.

The partners, formed as Papillion Gardens Regional Mall LLC, have left local leaders and people working with the project feeling that the developers can pull it off.

"I continue to hear good things about them," said State Sen. Jon Bruning, who represents the area. "Certainly, I think they're a legitimate organization."

Hanor develops "grade A" malls, said Jon Batesole, senior vice president of General Growth Properties Inc., which owns 130 regional malls nationwide, including Westroads, Oak View and Mall of the Bluffs.

"He's very reputable," said Batesole, who oversees mall development. "He's very well-qualified."

Hardy and Peterson have a history of working with "power centers" - shopping areas that have major retail stores anchoring a strip of smaller stores and offering front-door parking.

The partners have built or helped develop projects that included restaurants such as the Outback Steakhouse and stores including Kohl's, Wal-Mart and Circuit City. The Chouteau Crossings Shopping Center in Kansas City, Mo., will have a Festival Foods and an IHOP restaurant.

Bellevue's Kennedy Center fits that style.

Unveiled in 1997, the 64-acre shopping center off the Kennedy Freeway at Chandler Road was expected to have three major retail stores, a 16-screen theater, strip malls and restaurants. But neighbors opposed the project, and the shopping center was sued over its property-tax assistance.

Peterson said the lawsuit, settled seven months later, caused a theater envisioned for the Kennedy Center to look elsewhere.

"It really put us in a point we couldn't move," he said.

There are recent signs of progress.

In September, Bellevue officials approved new plans. And the developers' company says a Fleming Co. supermarket has been lined up.

Peterson said some projects simply take longer, citing a center in Independence, Mo., that took seven years to prepare.

"We're not displeased with it," he said of the Bellevue project. "Sure, I'd like it to go faster."

So would many people in Bellevue. Opinions about the inactivity range from disappointment to optimism that something will break. Others wonder what's taking so long.

"Needless to say, it's a disappointment," said Bruce Sorensen, who formerly represented the area on the City Council. "I'd like to see it there."

Councilman John Ott, who represents the area, said he hears some concern that nothing has happened. After Papillion Gardens was proposed, he said, he heard a few people say, "That's the same one that hasn't been doing anything" on the Kennedy Center.

Two inquiries into the Kennedy Center got Hardy and Peterson thinking about a mall. After JC Penney and Sears asked about the Bellevue site, the developers contacted Soltau, an old acquaintance with mall experience.

When Soltau couldn't take the project initially, he called Hanor, who joined in after research assured him that Sarpy County offered a viable market.

Hanor is a former senior vice president of Federated Department Stores, the country's largest department store chain and parent company to Bloomingdale's and Macy's. Nationwide, Hanor has worked with more than 50 malls, mostly in the Southeast and Northeast.

In Memphis, the Oak Court Mall is "big on class," one review says. New Jersey's Woodbridge Center Mall is one of the East Coast's largest. The Gardens of the Palm Beaches has been described as "in a class all its own" with lush surroundings and fountains.

Hanor typically works where older malls leave communities underserved. Hanor said he looks for areas where the population is growing, income is high and a different shopping experience would attract people.

Hanor is applying those concepts to the proposed $200 million Brevard Crossings mall in Cocoa, Fla.

Gary Rogers, the City of Cocoa's development manager, said Hanor has a good reputation in the area. People are looking forward to Brevard Crossings, he said, because other area malls are too small and outdated.

"I can't say enough about the guy," Rogers said.

Not all of Hanor's ideas become reality.

Around 1995, Hanor proposed a regional mall for Royal Palm Beach, Fla. Soon after, national mall company Taubman Centers Inc. decided it could do better nearby and eventually secured anchor stores before Hanor.

Hanor said he felt he had a commitment from Burdines, a Federated store similar to Younkers and familiar to Florida's market. But Taubman, Hanor said, struck a deal to bring Burdines to its Florida mall and another Federated store to Virginia.

Said Hanor, "I lost a lot of money.... That's the way the cookie crumbles. It's a competitive business."

Though Omaha developers have questioned the Papillion project's need and location, Hanor and his partners believe Papillion Gardens is a strong proposal.

Would-be competitors Oak View, Westroads and Crossroads malls all are at least eight miles away. The developers say Sarpy County's high incomes and growing population provide a market. A location along two major roads, they say, will help draw shoppers.

Before Papillion Gardens moves forward, the developers, city and state must resolve questions about an intersection outside the mall, an issue called crucial to the mall's success. With one intersection already in the immediate area, the state denied additional access for fear it would lead to clogged highway traffic.

Papillion is asking the Roads Department for an extra intersection but could close another intersection to give the mall access. If the mall doesn't get an intersection, that will stop the project.

Hanor said he has been through such struggles before.

"These things, they're very complicated. Every one of them is a war story.... It's second nature to me."