1984 Report for Downtown Regional Shopping Center CITY M ',11).GIER'S OFFICE
A DOWNTOWN CENTER
FOR
SALINA, KANSAS
REPORT TO THE SALINA
BUSINESS IMPROVEMENT
DISTRICT 4:11
AND SALINA CITY CENTER, INC.
AUGUST 10, 1984
AR1
SUITE 174
6600 FRANCE AVENUE SOUTH
EDINA, MN 55435
On February 17, 1984, ARI entered into a Preliminary
Development Agreement with the City of Salina, Kansas_: Salina
Business Improvement District #1 ; and Salina City Center.
Inc. , to investigate the possibility of and put forth a plan
for the development of a sheltered shopping mall facility in
conjunction with the further development of downtown Salina.
Salina , Kansas, is facing the same question which many
other cities in the midwest have had to deal with during the
last twenty years. The rapid growth of suburban housing
fueled by the development of interstate highways and
automobile ownership created the opportunity to build large
regional enclosed shopping centers in suburban areas. Most
large metropolitan areas witnessed the movement of retailing
to the suburbs during the decade of the 1960s. Smaller
midwestern communities did not experience the threat of
suburban malls to their downtown retail centers until the
1970s. Salina, however, has just begun to deal with the
kinds of issues involved in the construction of a suburban
regional center.
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While Salina has seen retail development on the fringe
of town, that develoment has not threatened main street
retailing because the centers which have been built have not
been filled with traditional ready-to-wear stores. Salina
has not had a traditional department store anchoring a center
along with a mass merchandiser resulting in the creation of a
predominantly soft lines oriented shopping center outside of
downtown.
Now, however, Salina is faced with the possibility of
the develoment of a major regional mall outside cf the
downtown area. If that development goes ahead, the face and
character of downtown Salina will undergo a significant
change during the next five to ten years.
As a result of the threat from development on the
.outskirts of town, Salina City Center, Inc. , and Salina
Business Improvement District #1 were formed to determine
what could be done to keep Downtown Salina viable.
American Redevelopers, Inc. has examined the
opportunities available to Downtown Salina and has reached a
number of conclusions.
First, sufficient market and market potential exists to
develop a major regional shopping center in Salina, Kansas.
There is, however, NO possibility of developing two retail
centers and having both become economically viable.
Second, in order for Salina to become a force in its
market as it competes with other communities in Kansas for
sales dollars more elements must be added to the community
than just new retail square footage.
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Third, Salina CANNOT add the other necessary elements to
attract customers and visitors by constructing its new retail
center on the outskirts of town.
Fourth, there exists at least one plan which ARI
believes to .be economically feasible which would allow the
major retail center to be built downtown.
Fifth, the development of the retail center downtown
would make possible the expansion of other elements such as
entertainment, hotels and restaurants needed to allow Salina
to effectively compete in the Kansas market.
Sixth, without strong and aggressive intervention cn the
part of the City of Salina, its citizens, and its merchants
the retail center needed to serve as a catalyst for other
development will not be built downtown, thus destroying the
opportunity to add those other elements so important in
making Salina a strong, viable commercial center.
COMPETING IN THE MARKET
In order to draw new customers to the Salina market and
to retain the sales dollars of current trade area residents
(many of which are currently finding their way to other towns
and cities) it is necessary to create a certain level of
retail "mass" and activity. What is needed in Salina is a
true regional center. Twenty-five years of history and
experience with the shopping center industry has taught us
that in order to be competitive the regional shopping center
must have the following ingredients: a strong mass
merchandiser (Penneys, Wards, Sears) , at least one and
preferably two traditional department stores, and small
tenant square footage enough to add excitement and choice for
the customer. In addition, the center must be tied together
in such a manner as to allow and encourage the flow of
customers from one place of business to another. Free and
ample parking must be present , preferably on the same level
as the center within easy walking distance (not more than 400
feet) of the major anchors within the center. Without any
one of the elements mentioned above, the liklihood of
developing a viable project is extremely remote.
The modern shopping center is an interesting combination
of elements all of which feed off one another and are very
necessary to survive. The large anchor stores provide the
advertising power and draw which attracts people to the
center. The smaller shops pay the high rents necessary to
allow the developer to subsidize the anchor stores. In
essence, both elements feed off each ether. Without the
presence of both the anchors and the small shops, the
development could not go forward.
There is, however, more than just retail space necessary
to make Salina competitive. There was a time when people
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would travel 200 miles just to shop. The escalation of fuel
costs was the primary factor which forced many families to
reconsider their shopping habits. Now, customers want to
accomplish in one trip what they used to be willing to handle
in three. Today, "one stop shopping" has become the by-word
for the market place. One stop shopping means that a family
can shop for clothes, eat a meal , see a movie, and do their
banking by only starting the car twice (once on the way, once
on the way back) .
In addition to the concern to bring customers into
Salina from outside the area to do their shopping, Salina
must also begin to compete for the convention business and
the relocation of business to its town if it is to compete
with other communities in Kansas. The community has taken a
dramatic step forward by constructing the Bicentennial Center
to house major conventions and events. Unfortunately, there
is no quality hotel in which convention visitors can stay,
there is no transportation system from the motels on the
fringe of town, there are few good restaurants within easy
reach of the new convention center, and there is a lack of
entertainment close to the facility. Communities which
compete effectively for convention dollars all have several
elements in common. Those elements are in close proximity to
each other and include: •
1 . Good convention' meeting facility
2. Class "A" hotel rooms
3. Fine restaurants
4. Theatres, sports, entertainment
5. Retail shopping facilities.
Unfortunately, Salina has only taken the first step by
building its convention facility. Without providing the
other amenities to occupy the time of the spouse of the
visiting conventioneer and without providing fun and
interesting experiences for the convention couple after
meeting hours are over, Salina will be left with a fine
facility which will stand empty most of the year. At the
present time, Salina is a community which has not kept up
with many of the other cities in Kansas. While it has taken
a first step and developed the convention center, it
desperately needs to add the other elements which would
provide Salina with the opportunity to be competitive.
While "mainstreet" retailing has remained viable in
Salina, there is not enough updated retail square footage to
compete with other towns in Kansas. Mainstreet has a mass
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merchandiser in J. C. Penney, but it is housed in a
substandard facility without the ability to effectively
display and merchandise its goods. Salina also has a
traditional department store in Kline' s. Kline' s, however,
suffers from the same kind of problems J. C. Penney does.
There is no structure which pulls Kline' s and J. C. Penney
together and provides the kind of customer flow and amenities
that today' s customer has come to expect and even demand .
Additionally, while some very strong merchants exist
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downtown, the basic "retail mass" which shoppers
expect is not present. A regional have come to
ex
p p gional center in a downtown such
as Salina should have about S0% of its space designated for
apparel . Salina lacks the number of good women' s ready-to-
wear stores necessary to make it a true shopping destination.
WHAT SALINA LACKS
In order to allow Salina to become competitive, the
following elements must be added or redeveloped: retail\,
entertainment, restaurants. and hotel .
. Retail : Salina must develop a retail center of regional
shopping center proportion. It must have at least one mass
merchant, one and preferably two traditional department store
anchors, and additional small tenant space. Approximately
five parking places for every 1000 square feet of retail
space must be provided. The farthest parking place should
not be much more than 400 feet from an entrance to the retail
center. There should be no more than about 600 feet between
retail anchors. The configuration and flow of the center
should provide constant merchandise exposure and interest.
The center must be fully enclosed and climatized.
While some of the elements are present for' the creation
of a retail center, they do not relate to one another in any
logical and consistent fashion.
The small tenant square footage in a downtown center
(exclusive of restaurants) should be able to closely
approximate the amount and proportion of space devoted to
various merchandise categories in good 'shopping centers in
other communities. The division of space by category should
come close to that listed below:
Percentage of Gross
Category Leasable Area
Apparel - Womens & Childrens 27. 7
Apparel - Mens 10. 9
• Apparel - Mens & Womens 8. 7
Shoes 11 . 9
Jewelry - Gifts 8. 4
Home Furnishings 6. 1
Service Shops 4. 7
Food 2. 1
Mens & Womens Accessories 1 . 0
Drugs - Variety 9_ 0
Hobby - Leisure 9. 6
Miscellaneous 1 . 9
Entertainment: There is, with the exception of one theatre
and the arts center, no real ' entertainment opportunities in
downtown Salina. It is the classic example of a town which
rolls its sidewalks up at 6 P. M. While the addition of a
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shopping center will serve as entertainment for some,
attention should also be paid to other elements. The
downtown areas of viable, thriving cities across the country
normally contain movie theatres, live theatre, night club;,
museums, art galleries, etc.
In order to begin to bring entertainment back to
downtown Salina, it is strongly suggested that as a part of
any new retail center a four-screen movie complex be added
and that the restaurants mentioned below include live
entertainment and music. While it is realized that the
liquor laws Salina must deal with make it more difficult to
establish the kind of night life necessary to attract people
to town, it is possible to work within that framework and
still provide entertainment for visitors and residents alike.
Restaurants: Salina lacks good restaurants not only in the
downtown area, but throughout the community. If convention
business; visitors, and new shoppers are to be enticed into
the community at least three new quality restaurants must be
developed. Without the presence of additional restaurants in
close proximity to retailing and hotels, Salina has no chance
to significantly increase the number of conventions coming to
town.
It is therefore recommended that any new retail center
include at least two of the needed new restaurants. Those
restaurants should be located so that they are easily reached
by hotel occupants, shoppers and movie goers.
Hotel : Salina recently lost its only downtown hotel /motel .
At present, conventikon visitors coming to Salina must stay
on the outskirts of town and drive to the Bicentennial
Center. While the motels in Salina are adequate, they are
basically oriented to automobile travelers and truck traffic.
Salina simply cannot offer the traveling business executive
or the convention visitor the type of accommodations that
other towns can.
It is imperative that Downtown Salina develop a new
hotel which relates to the other elements listed above. It
is unrealistic to believe, however, that a first class hotel
will come to Downtown Salina if the other elements (retail ,
restaurants, entertainment) are not present.
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SALINA AT THE CROSSROADS
Salina is now faced with the kinds of alternatives which
most midwestern towns dealt with ten years ago. It can allow
. the construction of a suburban shopping center and the
resulting development patterns or it can proceed with the
redevelopment of its downtown.
ARI will not and cannot make Salina' s decision for it.
The Business Improvement District, Salina City Center, Inc. ,
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the Salina City Commission and the citizens of the community
should be aware, however, of the importance of the decision
they are facing. The decision which has to be made is one
which SHOULD NOT be left in the hands of outside developers
and corporations.
It should be pointed out that the consequences of the
choice Salina has before it are great. One need lock no
further than LaCrosse, Wisconsin: Fargo, North Dakota: Grand
Forks, North Dakota: St. Cloud, Minnesota: Duluth Minnesota:
and Sioux Falls, South Dakota to understand the implications
of the decision.
If the suburban shopping center is built the following
. scenario can be expected. ( It is assumed that J.C. Penney
would be an anchor in any suburban center and would close its
downtown store. ) Kline' s Department Store would find it
very difficult to remain profitable and would probably close.
The small tenant apparel stores, particularly womens, would
be forced to move to the suburban mall if they wished to
survive. The major banks would all open branches in the
vicinity of the new mall thus diluting their downtown
business. The "roll -up the sidewalks at 6 P.M. " syndrome
would be further enforced.
It is difficult to envision any further development of
new financial institutions downtown. Without restaurants,
entertainment,. etc. , a major hotel cannot be interested in
downtown. It is also doubtful that any new office projects
will be developed.
If Salina' s decision is that a major suburban retail
development should proceed, ARI will not proceed with any
further work on the downtown project. If , on the other hand,
Salina determines that it wishes to develop its regional
shopping center downtown, ARI is convinced that the market
exists, the interest on the part of retailers is great
enough, and that, provided that the kind of financial plan
included with this report can be put into effect, the
development of a downtown center is feasible. If , therefore_,
Salina wishes to proceed to develop its center downtown we
would enthusiastically proceed with such an effort .
August 17, 1984
SALINA, KANSAS
GBA 301 , 000
LAND $1 , 000, 000
Demolition - By City
Site Work - By City
$1 ,000, 000
CONSTRUCTION
Lower Level Shops 59, 800 s. f . x 33 $1 , 973, 000
Upper Level Shops 48, 200 s. f . x 34 1 , 639, 000
Mall Kiosk 27, 000 s. f . x 30 810, 000
J C Penney Expansion 20, 000 s. f . x 33 660, 000
Theatre 20, 000 s. f . x 47 940, 000
Mall Space 30, 000 s. f . x 50 1 , 500, 000
Dept Store #1 50, 000 s. f . x 35 1 , 750, 000
Dept Store #2 45, 000 s. f . x 35 1 ,575, 000
$10, 847, 000
SOFT COSTS
Architectural & Engineering $400, 000
Leasing Fees 380, 000
Developers Overhead 330.000
Loan Points 292, 000
Construction Interest 875, 000
Closing C-Jsts 70, 000
Contingency 280, 000
$2, 627, 000
TOTAL ESTIMATED PROJECT COST 314, 474, 000
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Exhibit A