Retail center planned

Mayfair owner wants to build at Pabst Farms

Milwaukee Journal Sentinel, June 16, 2006

By TOM DAYKIN and DORIS HAJEWSKI

An open-air shopping and entertainment complex that would rank among the area's largest retail centers is being proposed for Pabst Farms in Oconomowoc.

General Growth Properties Inc., the company that owns Mayfair Mall, announced plans Thursday to develop a similar-sized center on 110 acres at the northwest corner of I-94 and state Highway 67. The center would include national department stores, upscale shops, a multiscreen theater and restaurants in about 1 million square feet.

If everything goes as planned, construction could begin by spring 2008, Pabst Farms Development President Peter Bell said.

One possible hitch: Development of the Pabst Farms complex might ride on whether a settlement can be reached in one of the region's most bitter legal disputes: Aurora Health Care's fight with the City of Oconomowoc over a proposed hospital.

The shopping mall project requires 43.5 acres of land in Pabst Farms controlled by Aurora, Bell said. Aurora has been trying to build a hospital there for five years, and last month it revived its efforts after a ruling in its long-standing lawsuit with the city cleared the way.

The proposed Pabst Farms Town Centre is the second major retail project news in Waukesha County along I-94 within two months.

In May, Delafield developer Robert Lang announced plans to build a $200 million lifestyle center on the southeast side of I-94 and Highway C - about four miles from the Pabst Farms site - that would include upscale stores, restaurants, offices, a hotel and as many as 527 residential units.

The Pabst Farms project could have two to four anchor tenants, but it's too early to know the exact number because plans haven't been drawn up yet, said Jim Graham, spokesman for General Growth in Chicago. There was no word on the identity of any retailers who might be part of the new Pabst Farms center. But a real estate source said Target, JCPenney and Kohl's were possibilities, as are Boston Store or Macy's.

Between the two projects, it's possible that the area will get the entry of a new department store: Von Maur, a small chain based in Davenport, Iowa, that is often referred to as "the Nordstrom of the Midwest."

Real estate sources said Von Maur has been mentioned as a prospective anchor for both projects, but it's too early to say whether the chain will come here and, if so, which project might get the store.

"I have no doubt that we will be talking to them and to many others," Graham said.

A staff member in Von Maur's real estate department who asked not to be identified said, "Milwaukee is definitely an area we're interested in."

Von Maur operates 23 stores in the Midwest, extending as far north as Glenview, Ill. The privately held chain will open its 24th store next year in Overland Park, Kan.

"We've had discussions with retailers about this location, and they're excited about it," said Graham.

The proposed Lang development in Delafield also has not announced any prospective tenants, but the developers say they expect to have a mix of local and national retailers in an open-air center that will place some residential units above the stores. That likely will put the Lang center in competition with the Pabst center for some of the same retail tenants.

"We feel that the missions of the developments are different," said David Treier, spokesman for Lauth Property Group in Indianapolis, which will build the Lang center. "We remain excited about what this development can bring to the community."

Thursday's announcement of the 110-acre retail center seems to assume that a future settlement of Aurora's lawsuit with Oconomowoc will result in the controversial hospital being built on another Pabst Farms site, also controlled by Aurora, in neighboring Summit.

The 43.5-acre Aurora site, known as Parcel 5, represents nearly half of the area needed for the shopping mall project.

"We would not be able to have an open-air, high-fashion retail center of the quality that General Growth does without Parcel 5," Bell said. "The project needs all of that land."

Oconomowoc Mayor Maury Sullivan and Aurora spokesman Jeff Squire said Thursday that negotiations have begun, but each declined to discuss the status of those talks.

Bell is not a party to those negotiations, but he said he wants the hospital to be in Summit, at the southwest corner of the I-94/Highway 67 interchange, where it is envisioned as an anchor for a larger health and wellness campus.

Aurora also prefers the Summit site, but county officials blocked its plans last year.

"Aurora remains hopeful that a negotiated settlement can be promptly achieved with the City of Oconomowoc that will clear the way for construction of both the Pabst Farms Town Centre retail development and the new Aurora Medical Center," Squire said.

The size of the Pabst Farms center is comparable to other regional centers in the Milwaukee area.

Bayshore will have about 1 million square feet when the renovation is complete. Southridge has about 1.3 million; Brookfield Square, about 1.1 million; and Mayfair, about 1.1 million.

Pabst Farms Town Centre's design would use several buildings, with separate entrances, instead of the traditional shopping mall design of one huge building. It will include outdoor seating areas, plazas and fountains. Polacheck Co. in Milwaukee handled the transaction for almost 67 acres with General Growth on behalf of Pabst Farms.

The 1,500-acre Pabst Farms project, which includes homes, a business park and a neighborhood shopping center, has long included a regional, higher-end retail development within its master plan, said Bell, of Pabst Farms Development.

The site is already zoned for retail. Pabst Farms and General Growth representatives will meet with city officials as the formal site plans are created, Bell said. He said those detailed plans could be completed by the end of this year.

The construction of regional shopping centers such as the Pabst project is an unusual event, according to a report from the International Council of Shopping Centers. The industry trade group has identified only one regional center scheduled to open this year in the U.S., the Kendall Town Center near Miami, a 1.35 million-square-foot Rouse Co. property.

In 2005, four regional centers opened in the U.S., all of them in the South and West, where most new centers have been built in recent years.

Labor market analysts say the retail development shouldn't have much trouble finding workers, given nearby pockets of labor force and the proximity to freeways.