December 3, 2006
Big-name stores like what they see here
By Levi J. Long
In terms of shopping, Tucson won't measure up any time soon to San Diego, Dallas or even Phoenix.
Nordstrom, Neiman Marcus, REI and Whole Foods Market still elude the Tucson metro region.
Absent too are Armani, Gucci and even Kenneth Cole.
Yet when you look at the local retail scene, optimism abounds about bringing big-name upscale stores
to the area.
Luxury retailers Tiffany & Co. and Louis Vuitton opened new stores this year in the Catalina Foothills.
uber-hip clothier American Apparel also liked Tucson enough to open a two-story shop at Main Gate
Square, a shopping district along University Boulevard west of the University of Arizona.
More may come soon. One million residents now call Pima County home and that means temptation
for new retailers who want to ply their goods in Southern Arizona.
Does a million really matter?
Yes it does.
Having 1 million residents in a metro area is the single most important factor retailers look for when
opening new stores, said Don Reinhart, a professor teaching supply-chain management and real estate
development at the UA's Terry J. Lundgren Center for Retailing.
"Cities want to hit that 1 million-person mark. That's when retailers start to take note of new cities
where they don't have stores," he said.
"When you've reached a million, it means there is enough diversity with employers, with the
population base and with an economy that's stable enough to open new stores for the long term," added
Greg Furrier, a partner with Tucson-based Picor Commercial Real Estate Services.
But new retailers' decision to open in Tucson depends on the type of stores shoppers want and the kind
of pocketbooks stores want to latch onto.
David Mehl, president of Tucson-based Cottonwood Properties, said most middle-market retailers
aren't lured by having a million people in an area.
But for high-end stores, he said, it's "critical."
But a million people could also mean more stores for a middle-of-the-road consumer base such as
Target and Wal-Mart, said Patrice Duker, a spokeswoman for the International Council of Shopping
Centers, a trade group based in New York.
Other factors retailers consider include the types of planned regional shopping centers and "lifestyle
centers," places that combine entertainment and outdoor shopping, under construction, she said.
What stores would you like to see here?
Some residents and retail insiders say Tucson has enough shopping options.
"We have most of the major retailers represented," said Reinhart of the UA's retail center.
Newcomer Juli Sleper, 35, agrees. "There's not a lot that's missing. Tucson has more places to shop
than I'm used to," said Sleper, who moved to Tucson in June from Savannah, Ga.
Local business owners say they're used to Tucsonans skipping the city to shop in Phoenix, said Kara
Moeller, co-owner of 21-year-old La Contessa clothing store at Plaza Palomino, 2980 N. Swan Road.
"It's unfortunate," she said. "Tucson has just as many places to shop."
And when new retailers and shopping centers open, the first few years might hurt small-business
owners, she said. But local boutiques can rely on providing excellent customer service and offering
specialty services to customers -- beyond what big chain retailers can provide, she said.
"That's what we're doing now. La Encantada hasn't hurt us yet," she said.
Still others want those elusive stores that have already set up in Phoenix.
Among 16 shoppers hitting local malls, a few named their favorites.
"We're so casual here in Tucson. But Nordstrom would do well here," said Joanne Dietz, while
shopping at La Encantada shopping center at East Skyline Drive and North Campbell Avenue. "We
don't need Gucci, Armani ... but Nordstrom. Holy cow, I'd shop there."
Kenneth Cole, Sephora, Saks Fifth Avenue and Neiman Marcus would also be a nice in Tucson, adds
shopper Heaten Desai.
"There's a world of difference between shopping in Tucson and in Phoenix," he said. "But bringing
those stores isn't dependent on population. It's about spending power."
Others would simply like to see more outdoor specialty goods and grocery stores in the region.
"REI and Whole Foods (Market), said Lyla Soto "Those two would definitely do well here."
What stores might come here, and might not?
Though those stores remain on some Tucson shoppers wish lists, none has committed to opening in
Tucson just yet. And retail developers remained mum when asked who they were trying to bring to the
area.
Tucson can pretty much forget about drawing certain mega retail stores -- Cabela's, Bass Pro Shops
and Ikea -- any time soon.
Those retail formats typically open one store per state, said Nancy McClure, vice president of CB
Richard Ellis, who specializes in retail properties.
Ikea typically looks at cities with about 2 million people for one store, said Joseph Roth, an Ikea
spokesman.
The two-year-old Ikea store in Tempe already draws people from Tucson as well as New Mexico and
Utah, he said.
"But if Tucson keeps growing, the potential exists," he said.
Other stores look at factors beyond population.
Don't expect Dallas-based Neiman Marcus to come any time soon.
The company looks at the "psychographics" of a community -- including shopping habits, leisure time,
and, of course, income -- rather than population numbers, said spokeswoman Ginger Reeder.
"We are constantly evaluating new markets," Reeder said. "But we have no plans to come to Tucson
yet."
Seattle-based Nordstrom said the "economic health" of a region, a large Nordstrom shopper following,
and shopping centers with a good mix of retail and entertainment venues factor into its consideration
along with a city's population. It doesn't count Tucson out of its plans for the future, but there are no
plans yet, said Deniz Anders, a spokeswoman for Nordstrom.
Tucson also has potential with Whole Foods Market but nothing has been decided, said Marci
Frumkin, a spokeswoman for Whole Foods.
And there is a sliver of hope with outdoors store REI.
"We're actually interested in Tucson," said Mike Foley, a spokesman for the Kent, Wash.-based
company, though he added there are no immediate plans to open here.
Catering to an active outdoors clientele, REI usually attracts college-educated customers and those in
higher income brackets.
"We don't look at a magic number," he said. "But Tucson doesn't have to do too much to get our
attention."
Pima at 1 million --This is part of an occasional series that will run in the Star over the next year on
what it means that Pima County crossed the 1 million population mark last month.
Read the entire series and view several multimedia features about Pima County at 1 million at
go.azstarnet.com/onemillion
Learn more about Pima County at a million, including stories looking at how we got here and where
we're headed, a mini-documentary video examining the effects of growth on the city and more videos
and slide shows.
Go to go.azstarnet.com/onemillion New stores are making their way to several planned shopping
centers and existing malls with vacancies in the Tucson metro area.
Tucson Spectrum will add 620,000 square feet south of West Irvington Road west of I-19. A new
cineplex, stores and restaurants are planned for the site. Tucson Mall and El Con Mall also have large
leasing space available.
Oro Valley Marketplace will sit on 114 acres on the southwest corner of North Oracle and East
Tangerine roads. Phoenix-based Vestar plans to break ground next year on the 860,000-square-foot
project, which will boast the town's first movie theater and anchor stores yet to be named.
Westcor, a Phoenix-based development company and parent owner of La Encantada shopping center,
owns 295 acres on the northwest corner of Interstate 10 and Tangerine Road. A 110-acre parcel on the
southwest corner of I-10 and Tangerine was bought late last year by Tucson-based Cottonwood
Properties. Both are planned as retail developments.
The Passages of Tucson near Vail and Corona de Tucson has yet to break ground. Hoffman
Development Group Inc., based in Burnsville, Minn., plans to build a 4.3-million-square-foot "regional
destination center" on about 297 acres near 1-10 between Colossal Cave Road and Camino Loma Alta.
The builder expects it to be fully built by 2020. "What does Tucson have going for it?" --Several
factors may already be in Tucson's favor when it comes to bringing in new stores.
Among them:
l Rooftops -- Despite Tucson's slowing housing industry, thousands of new homes still go up each
year.
l Cost of living -- Tucson is still considered a relatively cheap place to live.
l Disposable income -- Though Tucson's median household income hovers at $41,500, below the
national average of $46,200, developers and retail consultants say the cost of living here makes it
possible to spend more.
l Tourists -- The city's $2 billion-a-year tourism industry draws 3.5 million people a year. That includes
travelers who frequent several posh resorts such as Canyon Ranch, 8600 E. Rockcliff Road, and the
JW Marriott Starr Pass Resort & Spa, 3800 W. Starr Pass Blvd.
l Weather -- With a mostly sunny and dry climate, consumers don't have to worry about snow
preventing them from shopping.
l Diversity -- A growing Hispanic population and Tucson's ability to draw affluent Mexican shoppers
from across the border means new opportunities for retailers. Mexican visitors make more than 4
million trips to Tucson a year, spending $300 million annually in the city, according to the
Metropolitan Tucson Convention & Visitors Bureau.
l The Phoenix connection -- With stores open in the Valley of the Sun, retailers have a proven market
and may cast eyes down Southern Arizona's way.
And those factors bode well for Tucson, said James Hurley, managing director and senior
research analyst covering luxury goods at New York's Telsey Advisory Group LLC.
"It has a very attractive demographic with a large and growing customer base," Hurley said. "In
general it's a place that continues to attract wealthy shoppers. There are retirees with disposable
incomes and there's an economy that is more vibrant than most cities'."
Retailers pay attention to those demographics more than anything, Hurley said.
Sources: CB Richard Ellis; Picor Commercial Real Estate Services; Marcus & Millichap, a commercial
real estate brokerage; and the Terry J. Lundgren Center for Retailing.
--Contact reporter Levi J. Long at 573-4179 or llong@azstarnet.com.