Woodbury Centre Opens Near Famous Outlets

December 2002
By Donna Mitchell
Shopping Centers Today

The developers of Woodbury Centre, Harriman, N.Y., believe they are onto a sure thing: a neighborhood shopping center next to one of the most successful factory outlet centers in the world.

“It is a strategic location, given its location near Woodbury Common [Premium Outlets],” observed Richard B. Kabat, a managing director at Faison & Associates, the Bethesda, Md., development firm brought in by site owner Allied Partners to oversee the construction and leasing. The upscale Woodbury Common, developed and owned by Chelsea Property Group, Roseland, N.J., is a popular tourist destination, with one analyst putting its sales per square foot at $500.

Other factors also seem to bode well.

“We just saw a growing population and a lack of retail service for that population,” said Howard Slavin, Allied’s COO.

At press time the 228,000-square-foot Woodbury Centre, which also features three freestanding outparcels, was set to open in early November. Kohl’s, one of the anchors, had opened about a month before. The L-shaped center’s other anchors are Linens ’n Things, Michaels and Staples. A 150-room hotel constitutes the project’s second phase, which will probably be completed by November 2003.

New York City-based Allied, a family-owned commercial real estate investment company, bought the property in December 2000, with all the necessary zoning approvals already in place for a shopping center. It then set about getting environmental approvals from the Army Corps of Engineers to reconfigure the site’s wetlands, which make up half of the 62-acre site.

But there was still one problem: Allied lacked retail project experience. Shortly after satisfying the government’s environmental requirements, the company encountered issues with the $30 million project’s design and leasing. Allied had laid out a site plan with a lot of big-box spaces, but none were geared to specific retailers, Kabat said. Further, the company was hindered by its lack of long-standing contacts in the retail industry. So it brought in Faison, a developer with a portfolio of 15 million square feet of shopping centers under management. (The Dagar Group, a Fishkill, N.Y., retail leasing and management company, will manage the property.)

Kabat called on his contacts within the retail industry to secure leases, enticing them with a description of Woodbury Centre’s underserved trade area. Extending for 15 miles, the area has about 200,000 people and a $65,000 median household income. Located at the intersection of U.S. routes 6 and 17 and the New York State Thruway, it stands to benefit from heavy interstate traffic and a growing upscale population. Developers were also betting that it would benefit from runoff traffic from Woodbury Common itself, which stands opposite the new center.

Woodbury Common spans 840,000 square feet and features 220 designer stores in a village setting. The outlet center, which attracts about 10 million visitors a year, features outlets for upscale New York City apparel store Barney’s, Chanel, Donna Karan and a host of other fashionable retailers.

With a tenant roster that, besides Linens ’n Things, also includes Marty’s Shoes and Pier 1 Imports, Woodbury Centre will prove to be a lot more useful than the outlet center to shoppers with everyday household needs, said Kabat. This is especially important for local residents, who are currently underserved by retail, except for a Home Depot, a Wal-Mart power center and a planned BJ’s Wholesale Club. Neither is there much more retail likely to come, the developer said, because there isn’t much available land, and strong local unions make development costs prohibitive.