Manchester Highlands project on target
By Margaret Gillerman
ST. LOUIS POST-DISPATCH
Friday, Sep. 11 2009
Despite a recession that has dragged down the commercial real estate industry,
the $120 million Manchester Highlands development is expanding and set to open almost 400,000 more square feet in retail space in the next two months.
Pace Properties opened the 60-acre development at Highway 141 and Manchester Road in time for last winter's holiday season and leased to Petsmart, Best Buy, Bed Bath & Beyond and Ulta Beauty.
Starting next week and into November, the development will debut its main anchors:
— A Wal-Mart Supercenter will open its doors at 8 a.m. Wednesday. The nearly
204,000-square-foot store will employ 420 sales associates — including 175 new
jobs. It will have 30 merchandise departments, a bakery, deli and liquor
department, a drive-through garden center and drive-through pharmacy.
— Costco Wholesale Club will open Nov. 17 and will be the region's third
Costco. Others are in south St. Louis County and St. Peters.
"We felt this part of St. Louis County is a place where we are going to
succeed," said Bob Losoya, the new Costco's general manager.
"It's at two major arteries in West County, and it suits our demographics well.
I've talked to people in this community who are already members and are driving 20 miles north or south. They're very happy, and we're very excited."
Costco plans to transfer about 40 employees and create about 140 new jobs.
In addition, Manchester Highlands will feature a grand opening Sept. 19 for its $6.5 million Manchester Municipal Building — the new headquarters for the city police and Board of Aldermen.
When completed, the development will include more than 550,000 square feet in
11 buildings and more than 1,500 trees.
Manchester Highlands is one of a few projects of its size moving forward right
now. Many mid-block strip malls along Manchester Road in several cities,
including Manchester, have "For Lease" signs posted on empty storefronts.
Wal-Mart's opening at Manchester Highlands will create another such vacancy.
Wal-Mart will close a smaller store in Town and Country at Manchester Meadows, which is a little more than a mile east of its new store in Manchester.
The city projects that in its third year, Manchester Highlands will provide the
city with an additional $2 million in sales tax, which will boost total sales
tax by about one-third.
Pace, the developer, owner, manager and leasing agent for the project, is still
looking to fill about 24,000 square feet in three buildings and plans more new
buildings when the economy improves.
Rick Randall Jr., senior vice president of development at Pace Properties,
credits the success of Manchester Highlands largely to its location at a major
traffic crossroads, two thriving companies planned as anchors, and timing.
"Luckily we had our financing in place prior to the collapse of the financial
markets, before they froze up," Randall said. "If we hadn't gotten in when we
did, we would have had some big issues.
"It's extremely unusual to get the two powerhouses — Wal-Mart and Costco
Wholesale Club — in the same development," he added.
The city of Manchester also gave Pace $37.5 million in tax increment financing
and a $12 million Traffic Development District, which will be paid off through
revenue generated by the project.
Even with financing, Pace faced other hurdles including a controversial buyout
involving about 60 houses and 10 businesses. While Manchester awarded the
developer eminent domain rights, Pace was able to acquire the property without
using them.
"It has been a long and difficult project," Randall said. "Through a good
partnership with the city of Manchester and all the constituents — the owners
who were there and the tenants — at the end of the day everything worked out
really well. We are really proud of it and glad to be part of the city of
Manchester."