NEW YORK CITY—This week’s settlement between Simon Property Group and the New York State Attorney General Eric Schneiderman over geographic lease restrictions at its Woodbury Common Premium Outlets in Orange County may bring additional business to the Empire Outlets development on Staten Island that is slated to open next spring.
Don Capoccia, principal of BFC Partners and the developer of the 340,000-square-foot Empire Outlets, said in response to the settlement deal, “This is a huge win New York City residents who have for years demanded easier access to affordable shopping. We look forward to opening the city’s first outlet center on Staten Island’s revitalized North Shore, with a unique mix of shopping and dining that will provide an incredible destination for millions of residents and tourists. Our team applauds Attorney General Schneiderman for his commitment to supporting fair competition and giving more New Yorkers access to affordable retail options.”
James Prendamano, managing director for Casandra Properties, Inc. and exclusive leasing agent for Empire Outlets, tells Globest.com that he expects the revision of Woodbury Common’s 60-mile radius agreement to benefit the property that is expected to have approximately 100 designer outlet retailers when it opens in the spring of next year.
New York State Attorney General Schneiderman announced on Monday that Simon Property Group agreed to pay New York State $945,000 to settle charges it engaged in anticompetitive tactics to thwart the development of competing outlet centers in New York City. Specifically, the AG charged that due to its 60-mile radius provision with tenants at its highly successful Orange County, NY property, Simon prevented outlet store development in New York City’s outer boroughs and thwarted its tenants from opening locations at outlet centers in those markets. The settlement will allow for the opening of outlet malls in the Bronx, Brooklyn, the Bronx, Queens and Staten Island, according to the New York State Attorney General and tenants to open stores in those markets as well. The revised Woodbury Common tenant agreement will continue to extend to the entire borough of Manhattan.
Prendamano says that at present about 70% of the retail space is pre-leased and notes that several tenants that lease space at Woodbury Common have signed on at Empire Outlets. However, while he would not provide specifics, he charged that there were a number of potential Woodbury Common tenants that decided not to pursue a lease deal at Empire Outlets due to Woodbury Common’s 60-mile radius provision. However, news of the settlement with the Attorney General has perhaps changed at least some of their positions, he says.
“We have been contacted by multiple brands in the last 24 hours that are looking to engage again,” Prendamano says. “This is not an insignificant thing.” He adds, “It opens the floodgates” to dozens of new potential tenants.
He predicts that with the pool of potential tenants considerably larger, he expects the property to be fully leased by the time Empire Outlets opens its doors next spring.
“The only way we don’t get there is if there is some hold back, which is common sometimes that a landlord would like to hold a percentage of the space back.”
Among its tenants include: Nordstrom Rack, H&M, Gap Outlet, Banana Republic Factory Store, White House Black Market, Guess Factory Store, U.S. Polo Assn., Columbia Sportswear Company, Innovation Luggage, Wilsons Leather, G.H. Bass & Co., Lids, Obey Your Body, Starbucks, Walgreens, Ghirardelli Chocolate, Haagen Dazs, Krispy Kreme, Nathan’s Famous and Applebee’s. Plans also include a 190-room hotel.
Simon Property Group, in a prepared statement, was highly critical of the Attorney General’s probe calling the investigation “meritless” and noting that the “radius provisions have been upheld as lawful, reasonable and consistent with industry practice in the courts, as recent as 2010.”