An agreement to sell the Country Club Plaza reportedly coalesced on Dec. 21, four days before Christmas. The timing seems especially symbolic, given that the transaction, announced Monday, occurred at the height of the make-it-or-break-it retail sales season.
The Plaza, of course, is a shopping center, a low-rise, exposed-to-the-weather mall, that will soon pass from one real estate developer, Highwoods Properties, to another. The 18 buildings in the sale, containing more than 1.2 million square feet of retail and office space, generated $31 million in cash and net operating income in 2015, Highwoods said. Although some wild early estimates had the Plaza going for a billion bucks or more, Highwoods announced a sale price of $660 million. The community should be encouraged that the valuation seems optimistic, banker Jonathan Kemper told The Star on Tuesday.
The new ownership comprises a joint venture of Taubman Centers, based in Bloomfield Hills, Mich., and the Macerich Co. of Santa Monica, Calif. The two are publicly traded real estate investment trusts with high-end mall interests across the country and abroad.
Surely they heard from Highwoods officials how ferociously passionate Kansas Citians are about the character and history of the Plaza and its environs.
In recent years, populist campaigns to stop ill-conceived demolitions and design alterations forced Highwoods and other parties to change direction. Some Kansas Citians have long lamented the Plaza’s transformation since the 1970s as a bowling alley, drugstore, old apartments and other local fixtures gave way to high-priced, brand-name emporiums and looming towers. But Highwoods, over the last 18 years, compiled a convincing record of the Plaza’s important regional appeal as a destination for tourists and shoppers.
Highwoods proved itself a tough landlord but one that, in the end, took its role seriously as steward of the district even as it feared the operating restrictions that an official “historic” designation could eventually bring. To its credit, Highwoods recently agreed to support a new city ordinance that will maintain building heights in the bottom of the Plaza’s central “bowl” at a maximum of three stories.
Locals undoubtedly will watch closely for signs that the Taubman/Macerich partnership intends to take special care with this special Kansas City district. It was encouraging to learn that a principal board member of Macerich is a Kansas native long familiar with the Plaza and an enthusiastic supporter of the acquisition. In a statement, another Macerich executive said the group, which would become only the third owner since 1923, sees “opportunities to expand the market reach of the Plaza as well as the potential for further retail densification of this timeless asset.”
The real meaning of “retail densification” remains to be seen. But it certainly implies that time — and bottom-line opportunities — will not stand still on the Country Club Plaza. The recent holiday season was gangbusters for many Plaza restaurants and merchants. As the January lull sets in, they, along with their customers and nearby residents, can only hope for the best as another Plaza era begins.