Business

IKEA rumors swirl as Cary Towne Center initiates redevelopment

Cary Towne Center, part of the wave of shopping malls that transformed the nation’s retail landscape decades ago, is making its first push for redevelopment after struggling with the loss of two anchor department stores as well as the departure of retailers to newer developments in the Triangle.

CBL & Associates Properties, the mall’s owner, has begun the process to revamp about a quarter of the 60-acre mall property to allow for potentially taller buildings on the site. Their first step covers the eastern part of the property, which includes the vacant Macy’s and Sears buildings and land toward the Triangle Aquatic Center.

Tuesday, CBL submitted a pre-application meeting request to the Town of Cary to get staff feedback before submitting a formal rezoning application.

“We’re thrilled to move forward with this project,” Stacey Keating, CBL’s director of public relations, wrote in an email. “CBL has remained committed to Cary Towne Center, and this redevelopment further solidifies our commitment to the property and the market.”

Mall officials said this launches what they believe will be a “multi-phase project” that may bring more retail, dining and entertainment options to the area off Interstate 40. For longtime residents who remember how the mall became a shopping destination after it opened in 1979, the move signals a potential return to its former stature.

And with Cary’s ability to attract big-name businesses, thanks to its growing population and attractive demographics, some hope to see one of the oldest parts of Cary become a destination for non-Triangle residents, too. This part of Cary, in particular, could be appealing to retailers because of its central location, proximity to I-40 and large acreage.

Keating said CBL has “no particular tenant or tenants lined up at this time.” The pre-application meeting request doesn’t state the size or the number of buildings that CBL plans for this portion of the site.

Last fall, CBL’s CEO said the company is “pursuing a game-changing redevelopment anchor by a very recognizable and in-demand retailer,” according to a transcript of the conference call with analysts and shareholders.

IKEA buzz

Tuesday’s meeting request comes as speculation about IKEA coming to Cary continues to swirl among real estate agents, developers and fans of the popular Swedish retailer.

But IKEA spokesman Joseph Roth said in an email, “At this time, we have not committed to a timeframe for entering the market – let alone a specific site.”

“IKEA recognizes the customer base that exists for us in the Raleigh-Durham area and always has acknowledged that, long term, the metro area could support an IKEA store,” he said.

The Triangle remains appealing to the retailer, Roth said, adding that IKEA has had its eye on the area since the mid-2000s.

And Cary, a town of 156,000 people, is part of that mix. Nestled between Raleigh and Research Triangle Park, Cary is home to major companies such as SAS Institute, MetLife and Deutsche Bank.

The town has the lowest tax rate in the county and also one of the lowest crime rates. The median household income is $86,151. These factors help the town routinely land at the top of lists of best places to live. Last year, it was the best place to live in North Carolina in Money magazine’s annual report.

Roth said IKEA typically needs a population base of about 2 million people to support a store. The stores typically run between 270,000 and 400,000 square feet. Charlotte’s store, which opened in 2009, is 356,000 square feet.

“In most metropolitan areas of the country, we have brokers who help us identify potential locations as well as to evaluate, filter opportunities, proposals that arise or that are presented to us,” he said.

“The Raleigh-Durham area is no different,” he said. “It is a populous, growing metropolitan area that complements the presence of our store in Charlotte and our future store in Norfolk (opening summer 2018).”

Redevelopment steps

Following the pre-application meeting, CBL would need to submit a rezoning request for the project to move forward.

If the Cary Town Council approves the request, the mall would be allowed to build retail on that part of the site with a height of 60 feet and with setbacks of 150 feet from adjacent neighborhoods. This would allow for buildings 6 feet taller than the mall’s tallest building: Dillard’s.

With CBL’s anticipated timeline, construction could be complete 18 months after approval, said Keating, the CBL spokeswoman.

“We anticipate this first phase will be roughly a two-year project,” said Jason Barron, an attorney with Morningstar Law Group representing CBL.

The redevelopment of Cary’s mall has been long awaited by those wanting to see new life brought to the center.

Transforming the mall meshes with the Town Council’s plans to create a thriving eastern gateway along Cary Towne Boulevard with retail, residential and office space. The Rochester, N.Y.,-based Wegmans grocery store chain has expressed an interest in opening its first North Carolina site on undeveloped property north of the mall.

“It’s a significant priority for the Town Council, and the opportunities are very exciting,” Town Manager Sean Stegall said about the Cary Towne Center property. “I believe it can be a signature retail development for the entire region.”

Councilman Jack Smith was living in Cary when the “shiny new mall” opened in 1979. Cary was exploding with growth, with a population of about 22,000. People flocked to the mall because of its accessibility and five large anchor tenants.

“It was the hot thing,” Smith said.

The population grew, and the town’s boundaries continued to expand from a town of 10 square miles to 59 square miles.

As boundaries pushed west, north and south, new developments sprouted up closer to the new residents. Mall shops began to vacate for Cameron Village, The Streets at Southpoint and later new mixed-used developments like Park West Village.

“I just think it was one of those things where people gravitated toward newer, fancier things,” Smith said.

Anchors close

A recession and a boost in online sales didn’t help either.

Keating said CBL began looking into possible redevelopment scenarios when Sears announced it was closing.

“Cary Towne Center is well located, and CBL knew there was an excellent opportunity to redevelop the property as soon as we could gain control of the anchor spaces,” she said.

After Sears closed in January 2015, Macy’s followed suit in April 2016 as part of a series of closings across the country. Several other smaller retailers also have closed. JC Penney, Belk and Dillard’s have remained.

Keating said she couldn’t disclose the mall’s occupancy rate.

This is not CBL’s first attempt to revitalize the property.

Mall officials once hoped to replace the Sears property with TopGolf, a golf and entertainment complex. But neighbors’ concerns about noise and lighting prompted TopGolf to announce plans in 2015 to look elsewhere.

Despite tenant losses, CBL officials are still optimistic about the site’s future.

“Cary is one of the most vibrant communities in the Triangle region with new residents moving there every day,” Keating said. “Cary Towne Center sits in a prime location, and we believe there is more than enough demand to merit CBL’s commitment to providing unparalleled retail options to the community.”

Kathryn Trogdon: 919-829-4845: @KTrogdon

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