Metcalf South Shopping Center sold to new local owners
03/01/2014 10:59 AM
03/01/2014 10:59 AM
Overland Park got its wish Friday when a local developer backed by a billionaire partner bought the struggling Metcalf South Shopping Center with an eye toward tearing it down and replacing it with a residential, retail and office project.
Lane4 Property Group of Kansas City has joined the Kroenke Group, a venture owned by multibillionaire Stan Kroenke, to buy the 1960s-era enclosed mall, which is losing one of its biggest tenants, Macy’s.
The purchase also includes, just to the north of the mall, the 95 West Shopping Center anchored by a vacant K-Mart. Both shopping complexes are at the corner of 95th Street and Metcalf Avenue.
“The opportunity to redevelop and reposition these properties in a positive and meaningful way is exciting to us,” said Owen Buckley, president and founder of Lane4.
“We are equally excited about partnering with the Kroenke Group because of their successful track record in commercial real estate across the country and their deep understanding of the Kansas City market.”
All the properties had been owned by Mission-based MD Management, a firm started by noted developers Frank Morgan and Sherman Dreiseszun. The purchase price was not disclosed.
The combined properties cover 60 acres and include 800,000 square feet of buildings, much of that space now empty.
They are on one of the busiest intersections in Overland Park, where 110,000 vehicles pass daily. The corner was the bull’s-eye for the Vision Metcalf redevelopment plan completed by the city several years ago.
Buckley said it would take several months before a solid plan for redeveloping the property crystallized, but he did say it was likely that the mall would be razed. After Macy’s closes, its only remaining anchors will be Sears and the Glenwood Arts Theatre.
“It’s very likely we will demolish the shopping center,” Buckley said, “but we’re keeping an open mind.”
Overland Park officials, who have long wanted to rejuvenate the dying Metcalf South property, praised the transaction and said they’re willing to partner with the developers moving forward. The Vision Metcalf plan calls for high-density residential and commercial uses at that location.
“This is a very important intersection for the city and for the Vision Metcalf plan we’ve had for a number of years,” said Mayor Carl Gerlach. “Having Lane4 and Kroenke involved is very exciting for us.”
Morgan and Dreiseszun developed the centers in 1967 — 95 West originally was called the French Market — and later formed MD Management. Adam Feldman, MD Management’s chief operating officer, said in a statement, “We are excited to see them reinvent this iconic intersection.”
Metcalf South struggled for many years as it competed with newer malls that also were larger and more stylish.
In recent years, wholesale home decor, gift and fashion retailers open limited hours have filled many of Metcalf South’s vacancies — with Macy’s and Sears on the ends. However, Macy’s is scheduled to close in early spring as part of a corporate overhaul. It has 216,000 square feet in Metcalf South.
Redevelopment plans for the center have stalled over the years, including one several years ago that would have converted the center into a mixed-use project with upscale boutiques, national and local retail, entertainment, office and residential space, and a hotel.
Across 95th Street, the 95 West Shopping Center also has struggled. Kmart closed in December. A spokesman for Kmart said the lease was not renewed.
Another longtime tenant, Hancock Fabrics Crafts & More, recently relocated nearby. A Hancock manager said the store moved because the building where it had long operated was going to be demolished.
Lane4 has experience dealing with older shopping centers in Johnson County. The firm owns the Fairway, Prairie Village and Corinth shopping centers. It recently overhauled the Corinth property and has turned its attention to reviving its Prairie Village property.
Having the wealth of Stan Kroenke in the deal should be a huge asset. He’s a native of Mora, Mo., and was named after St. Louis Cardinal great Stan Musial. His Kroenke Group is based in Columbia, where he attended the University of Missouri.
He married Wal-Mart heiress Ann Walton but made his own fortune as a real estate developer. He later inherited even more wealth, and Forbes estimated his worth at $4.1 billion in 2012.
“He’s one source of equity that doesn’t mind somewhat risky projects,” said Dan Lowe, managing partner at RED Legacy and an experienced Kansas City developer. “He understands development and is a phenomenal partner to have.”
Lowe said the biggest challenge to redeveloping the Metcalf South property would be to attract unique retailers to the site.
“The demographics in the area are still second to none,” he said. “What I would look at is a mixed-use development anchored with senior living. It’s a phenomenal restaurant corridor, too, and it remains one of the best pieces of real estate in Kansas City.”
Buckley said the redevelopment plan was an “open book” at this point, but the developers plan to hire DLR Architects soon to help design the project.
“It will be a good several months before we have a plan,” he said.
Sears, which owns its property and has been part of the mall since the beginning, is expected to be part of the plan.
And the Glenwood Arts?
“At this point, there’s no plan to close or change their situation,” Buckley said.
Overland Park City Councilman Curt Skoog, whose district includes the location, said the city was willing to listen if incentives were requested. There is no predetermined incentive package for the site under the Vision Metcalf plan.