Wednesday, March 25, 2015

Move Over, Mall of America: Bigger Extravaganza Planned in Miami

More than four years ago, I wrote about how Miami would be one of the most popular cities on the planet; check out the developments being planned. Aivars Lode

Canadian developer would build U.S.’s biggest mall—including hotel, amusement park and sea-lion show

By Robyn A. Friedman 

Most shopping-mall operators are shying away from new construction, especially as e-commerce cuts into foot traffic. Apparently a Canadian firm doesn’t have the same concerns: It aims to build not only a new mall, but the biggest mall in the U.S.
The project, called American Dream Miami, was unveiled last week by Edmonton, Alberta-based Triple Five Group, which also owns Minnesota’s Mall of America.
At 4.2 million square feet and 520 stores, the Mall of America is considered the nation’s largest shopping destination. But in a statement last week, Triple Five said its Florida project “will exceed our other world famous projects in all respects.”
Executives at Triple Five declined to comment, but Miami-Dade County’s mayor said the project would cost about $4 billion. In addition to the retail space, the mall would include a ski slope, a water park, a sea-lion show, miniature golf, bowling, a submarine ride, restaurants, a performing-arts theater, a cinema, a Ferris wheel, an ice rink and a roller-coaster ride as well as hotels and condominiums.
The development would be built in an unincorporated part of the county, northwest of the city center.
If its plans seem like a tall order, consider this: Triple Five isn’t the only real-estate developer that has recently added retail in the Miami area or is in the process of doing so. 
Scheduled for completion at the end of 2015, Midtown Doral, under development by Optimus International Developers, will bring 300,000 square feet to the greater Miami area. At Brickell City Centre, considered the financial district of Miami, Hong Kong developer Swire Properties will deliver 565,000 square feet of retail space anchored by Saks Fifth Avenue in the fourth quarter of 2016. The Mall at Miami Worldcenter, in the heart of downtown, will complete 765,000 square feet of restaurant, retail and entertainment space by 2017.
Whether Miami can support such a large amount of new retail space is a question. Some brokers say Miami’s retail market is strong and that while e-commerce has put a damper on retail growth in other locales, Miami has been little-affected.
That’s in part because of population growth. According to the Miami Downtown Development Authority, Miami’s downtown population alone has doubled from 40,466 in 2000 to 80,750 in 2014, and it is forecast to hit 92,519 by 2019. More broadly, the entire county grew to nearly 2.5 million residents in 2010, according to Census figures, from just over 2.25 million in 2000.
Miami also can count on a constant stream of tourists, many from Latin America, who come there to shop, analysts say.
“Miami for years was under-retailed,” said Jim Fried, managing director of Aztec Group Inc., a real-estate investment-banking firm in Miami. “I think there will be enough growth to support the additional retail.
Not everyone is so sure. Even though demand for Miami condos has been strong, many buyers are from Latin America or Canada and aren’t permanent residents. Others may not have the financial means to support the onslaught of luxury retail. Average incomes in Miami are lower than in New York, Los Angeles and San Francisco, other cities with lots of new pricey condos.
“A lot of the owners will live here only two or three months out of the year, and the rest of the time the place will sit empty,” said Jack McCabe, a housing industry analyst in Deerfield Beach, Fla. “Or they will rent the units out to people who are trying to make ends meet to live in downtown Miami and who don’t have the disposable income to support the retailers.”
What to Find at American Dream Miami?
  • ski slope
  • water park
  • sea-lion show
  • miniature golf
  • bowling
  • submarine ride
  • restaurants
  • performing-arts theater
  • cinema
  • Ferris wheel
  • ice rink
  • roller-coaster ride
  • hotels
  • condominiums 
But Triple Five is betting not only on strong retail demand and population growth, but also on a new model for retail real estate: shopping centers paired with entertainment, residential and hotel facilities, all located at the same property.
Such amenities are by nature risky, however, and can lead to delays and cost overruns. Case in point: Triple Five’s American Dream Meadowlands project, a 2.8-million square-foot retail and hotel complex near MetLife Stadium in New Jersey. Triple Five agreed to buy the half-finished project, which also features an indoor ski slope and a giant Ferris wheel, in 2010, and had hoped to complete it by 2013. The $4 billion project still has yet to secure financing amid a swelling budget and delays in getting local government approvals. 
Questions also remain about whether Triple Five can obtain financing for the American Dream Miami. Still, city managers are bullish. “This project will be the largest in Miami-Dade history,” said Carlos A. Gimenez, the county mayor. “We are supportive of it but it still has to go through all of the regulations and environmentals before it can come to fruition.”
—Robbie Whelan contributed to this article

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