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Insight on Hillside Plaza's status
Retail business is booming in Federal Way! McGraths Fish House, Panera Bread, Century Theaters and the Wal-Mart Supercenter clearly reflect this.
Retail business is struggling in Federal Way! The exodus of Old Navy and Toys R Us and the relocation of several big box stores, i.e.: Borders, Office Depot and Target. These are indicators of the challenges facing the retail business in Federal Way.
Many have asked me, How can one property like the Crossings succeed in the same community where others are fighting for tenants? And often Hillside Plaza (otherwise known as the former Target site) is cited as an example of one of Federal Ways most struggling properties.
A once highly-trafficked area, Hillside suffered a crippling blow in 2004 when Target Corporation moved to expand in size (and eventually in revenue) as a Commons mall anchor. Toys R Us delivered the second lethal punch when the stores corporate office finally pulled the plug on its Federal Way location (along with several others nationwide).
My initial attempts of explaining this phenomenon were clouded by the unspoken (but circulated) theory that Hillside Plazas owners were just difficult. But I needed facts, not opinions, so I did some investigative work, going to the direct source. I contacted Stan Rosen of Rosen-Harbottle Commercial Real Estate and Rosen Properties, co-owners of Hillside Plaza.
Heres what I learned. Hillside Plaza is owned by three individual investment groups:
Rosen-Harbottle Commercial Real Estate and Rosen Partners
Bryan Park (owner of the Paldo World the Outback Steakhouse location)
Toys R Us Corporation.
The property was sold with an attached covenant, which is the commercial real estate equivalent of a homeowners association. This covenant stipulates use of property for 100 percent retail only. This retail use-only covenant could be changed, but only with unanimous agreement from all three owners. And Stan Rosens vision of the property remains focused on retail-only usage.
He went on to say that this vision, rather than being based on stubbornness, was driven by his need to produce maximum profit margins. Rosen-Harbottle and Rosen Properties, a respected industry name, manages more than 2 million square feet of industrial, office, high-tech and retail properties valued at more than $187 million. Its this experience, along with that of his 10-person team of commercial property specialists, that keeps Mr. Rosen firmly rooted in the belief that mixed-use development would lower the foot traffic to his portion of businesses, and thus his investments worth.
Given the citys strong support of mixed-use commercial property downtown as championed by the proposed Symphony Project, Mr. Rosen went on to say that he remains willing to review and consider all options. He just hasnt had the opportunity. Not one fully formed presentation has been pitched for his consideration to date.
Our conversation ended with me conflicted. I expected hard-headedness and shoddy logic, but Mr. Rosen delivered credible reasoning with a pleasant demeanor. He left me asking myself what I would do in the same situation not knowing the answer.
I have several other people to talk with, as well as two more property owners, before I attempt to answer that one. Until next time!
Tom Pierson is CEO of the Federal Way Chamber of Commerce and can be reached at (253) 838-2605 or firstname.lastname@example.org.