Second outlet center in works

Memphis mall begins building

Developers of a new outlet mall in southwest Little Rock knew there would be another one going up in Memphis when they decided to proceed with theirs, Outlets of Little Rock. On Wednesday, Greensboro, N.C.,-based Tanger Factory Outlet Centers Inc. announced it is partnering with Poag Shopping Centers on a development in Southaven, Miss., just a few miles south of Memphis.

That center will be called Tanger Outlets Memphis.

Talk that an outlet mall would be built near Memphis has been ongoing for years. Southaven and DeSoto County officials approved a $15 million tax increment financing plan, or TIF, where bonds will be issued to pay for the infrastructure for the 310,000-square-foot center with potential for another 100,000 square feet of space for retail and other uses. The new Mississippi development also has approval for $34 million in sales tax rebates.

The shopping center is expected to have about 70 upscale brand name and designer outlet stores, the company said in a release. Outlets of Little Rock is readying for 75 stores in seven buildings with the potential for hotels, restaurants and other entertainment venues within walking distance. It's been said that a Bass Pro Shops store was the bait for New England Development of Boston, which is opening the Little Rock outlet center this summer near the Interstate 430 off ramp.

Prior to the recent Tanger announcement, the closest outlet mall was another, well-established Tanger project in Branson, Mo.

While the Little Rock center is well underway and construction in Memphis is just now starting, both expect to be open in time for the 2015 Christmas holiday shopping season.

New England officials said Thursday they expected "minimal impact" on the Little Rock mall from development of the Memphis project. Vice President Michael Barelli said the Little Rock center's core customer base -- up to 70 percent of sales -- is expected to come from a 60-mile radius of Little Rock. Residents within that geographic span have an average household income of about $60,400, he said.

More than 1.5 million people live within an hour of the Memphis site; some 1.2 million live within an hour of the Outlets at Little Rock.

Michael Pakko, a state economic forecaster and chief economist at the Institute for Economic Advancement at the University of Arkansas Little Rock, said traditional indoor malls are starting to disappear and outlet malls are taking up the slack.

"It's certainly true that having one closer than any had previously been is going to put some competitive pressure on this new outlet mall in Little Rock, but not in a devastating way," Pakko said. "It's still retail, which tends to be more local, even though an outlet mall expects to draw people from further away than your typical suburban shopping mall."

Outlets of Little Rock is about the same size of the Memphis project -- just 1,000 square feet larger. Mike Barelli, vice president of Newton, Mass.-based New England Development was adamant about not releasing names of potential tenants. Nor has Tanger released store names, though it's usual merchants from signs found on the Internet include The Gap, Ralph Lauren, Coach Factory, Ann Taylor, Saks OFF 5TH Fashion Outlet and Tommy Hilfiger USA.

Barelli said there would be some stores landing in both malls.

"It doesn't affect us much, just because of the distance," Barelli said.

"It will serve Memphis well, and we'll serve Arkansas just as well," he added. "There's definitely room for more outlet centers in the South."

Business on 01/09/2015

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