ADVERTISEMENT

TOWN OF NIAGARA – The Fashion Outlets of Niagara Falls is planning a 50-store, $71 million expansion, aimed at maintaining it position as a top weekend destination for Canadian shoppers.

The town Industrial Development Agency accepted an application Wednesday for a tax break for the project and scheduled a public hearing and vote for March 13.

The timing and size of the 230,000-square-foot expansion, which includes about 175,000 square feet of leasable retail space, are being driven by coming competition in nearby Ontario, according to Douglas H. Morrow, vice president of development for Macerich Co., the Santa Monica, Calif., company that owns the mall.

Pointing to planned new outlet centers west of Niagara-on-the-Lake and in Halton Hills, Ont., Morrow said, “It’s very concerning to us that Canadian customers might choose convenience over the dollar savings, with the hassles of the trip over the border. We need to be first to market.”

And Canadian shoppers are the Military Road mall’s lifeblood. Morrow said Canadians comprise 68 percent of the shoppers and provide 82 percent of the sales at what is now a 526,000-square-foot, 150-store mall.

The plan is to fill the expansion with high-end stores, although Morrow wouldn’t disclose any names. However, he said 89 percent of the space in the expansion is already spoken for through letters of intent or actual leases.

Morrow said the mall doesn’t intend to move or enlarge existing retailers. “The goal is to bring to the market tenants that we can’t accommodate now,” he said.

By the third year after its completion, employment at the mall is projected to increase by more than 600 jobs, to a total of 2,533, IDA Chairman Calvin Richards said. The total payroll will be an estimated $44 million a year.

The expansion, targeted for a fall 2014 opening, is to be built on the 32-acre site of Sabre Park, a mobile home park that a Macerich holding company acquired in a foreclosure auction last year.

Morrow said as of March, only 11 tenants will be left in Sabre Park. Some of their leases will expire in June, the rest in November.

“We’re not evicting them. We’ll work around them,” he said. Only about two-thirds of the trailer park is going to be redeveloped, leaving room for future growth of the mall.

Town Supervisor Steven C. Richards said the mall already draws five million shoppers a year, making it the second-most visited site in Niagara County behind Niagara Falls itself. He said, “This is the biggest private investment in our town in our history.”

He said it might take six months for all the necessary approvals to be obtained, not only from the IDA but also from the Planning Board, the Zoning Board of Appeals and the Town Board, which has the final say on the site plan.

The supervisor, who is the son of the IDA chairman, said he expects an estimated $18 million worth of improvements by existing mall merchants. The entire project is expected to provide 925 direct and indirect construction jobs.

The 15-year property tax break and a sales tax exemption on furnishings and materials for the expansion will save Macerich an estimated $6 million over 15 years, IDA counsel Mark J. Gabriele said.

Sales tax paid by Canadian shoppers at the new stores is projected to total $4 million a year, with $12 million more coming from spending by Canadians away from the mall.

“Where else can you actually bring in dollars that aren’t just transferring sales tax dollars around [from county to county]?” Morrow asked.

The existing mall is under a payment in lieu of taxes agreement that has 12 years left to run, Steven Richards said. Macerich also pays the town $200,000 a year under a host community agreement that also has 12 years left.

email: tprohaska@buffnews.com