Commercial Real Estate and Mixed-Use and Simon Property Group and Retail Development and Premier Properties and Development/Redevelopment and Real Estate & Retail

Developers have new plans for corner

December 31, 2007

The retail juggernaut at East 86th Street and Keystone Avenue could get even stronger in the next several years.

Locally based Premier Properties USA Inc. revealed plans in 2007 for a $750 million redevelopment of a prime corner near The Fashion Mall at Keystone.

Plans call for a mall roughly the size of The Fashion Mall, a 575-room hotel that would be the city's third-largest after a new JW Marriott and the Indianapolis Marriott downtown, an office building with nearly as many square feet as One Indiana Square, and a 5,000-seat theater.

Mall giant Simon Property Group, which owns The Fashion Mall, has no plans to back down. The company responded quickly to Premier's volley, announcing plans to add 150,000 square feet to its 683,000-square-foot Keystone mall in 2008 and lure 20 additional tenants.

Most of the expansion--100,000 square feet--will be added to the second level on the west side of the mall, Simon said. Nordstrom will occupy a total of 130,000 square feet on two levels.

The remaining 50,000 square feet will be added to the east side, where Saks is located. New parking decks will also be built.

The Premier development, dubbed Venu, would replace an aging strip center and parking lots at the southwest corner of 86th Street and Keystone Avenue, adding up to 3 million square feet of space. The project's scope, coupled with Premier's trouble paying some of its bills for previous projects, raised some doubts about whether Venu is too ambitious.

But Premier CEO Chris White said he's plowing ahead. The company has acquired a fellow developer's Whole Foods Market project and hopes to bring the natural foods retailer into the Venu fold. Other possible tenants include a Barnes & Noble bookstore; Arhaus, an upscale furniture retailer; and REI, an outdoor-gear superstore that would be new to the market.

Venu plans also call for up to 15 restaurants with a total capacity of more than 2,000 people, 116 condos in two residential towers, and a 21,000-square-foot health club.

Three or four levels of underground parking with more than 6,300 spaces would span roughly 20 acres and offer access to the project in several locations. The developers plan to seek the highest level of Leadership in Energy and Environmental Design, or LEED, certification.

Perhaps the most dramatic detail revealed in a filing is that the development would feature retractable sections of wall and roof canopy that could open and close depending on the weather.

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