Crabtree crafting expansion, outdoor shops

Kim Nilsen
Triangle Business Journal - May 30, 2005

RALEIGH - The managers of Raleigh's Crabtree Valley Mall once again are developing plans for an expansion of the giant retail center.

The struggling Lord & Taylor department store would be torn down. That space, along with some adjoining acreage, would be used to pattern an open-forum retail strip of high-end shops. All of the shops would face Crabtree Creek Drive at the rear of the mall.

The plans were unveiled by officials from Plaza Associates, which operates the mall, during the annual meeting of the International Council of Shopping Centers in Las Vegas.

"There's a glass dome over the whole thing, but the shops are facing the road," says a retail source who saw a rendering presented to potential leasing agents who may shop that space to brand-name retailers. "Looks like they are ready to spend some money on this expansion."

Called the Crabtree Renaissance Plaza, the retail expansion is expected to be similar to the streetscape sections worked into the design of the area's two newest enclosed malls - The Streets at Southpoint and Triangle Town Center.

Crabtree Valley Mall, which was built in 1972, has held on to its anchors and most of its upscale tenants even as the two new malls opened for business in 2002. Each of the three malls, Crabtree, The Streets at Southpoint in Durham and Triangle Town Center in north Raleigh, has about 1.3 million square feet of retail space.

The only recent blow to Crabtree's tenant mix came in 2003 when Lord & Taylor's parent company, The May Department Stores Co., announced plans shutter the store. The location was one of 32 slated for closure. The department store is expected to vacate the space no later than January 2006.

Unlike Triangle Town Center, which sits on 139 acres, and The Streets at Southpoint, with 140 acres, Crabtree is confined to a 57-acre landlocked site between Crabtree Creek, Glenwood Avenue and Edwards Mill Road.

Plans for the open-air plaza at Crabtree don't surprise Steen Kanter, the chief executive of Kanter International, a business and brand development firm that counsels many retail clients. "They have to do something," Kanter says. He sees Crabtree as under pressure not just from Streets and Triangle Town Center but also from the new North Hills, a nearby open-air mall anchored by Target and JCPenney.

To make the plaza a success, Crabtree would have to offer exciting attractions there, Kanter says. At Streets, unique retailers such as an Apple Computer store draw shoppers. Triangle Town Center's collection of restaurants helps drive additional foot traffic outdoors.

The location of the plaza - on the back side of the mall away from heavily traveled Glenwood Avenue - could pose problems, Kanter says. "It's not visible from the street."

Kanter predicted last year that Crabtree would either break up the Lord & Taylor space or seek to fill it with a big box retailer such as Target or Wal-Mart or a high-end offering. That type of transformation will happen nationwide, he says, as malls lose department store tenants as a result of consolidation among retailers.

Financing for most of Crabtree's future expansions and renovations likely would come from the same source that spearheaded past expansion efforts - CVM Holdings LLC.

CVM Holdings is a foreign limited liability company formed in March 2002, according to state and local public records. Plaza Associates President Sam Longiotti is general partner of CVM.

CVM Holdings is managed by Chandon Investment Co. in New York. Chandon Investment Co. is a partnership of Delaware-incorporated Real Estate Operations, which is owned by the family of former Abu Dhabi President Sheikh Zayed bin Sultan al-Nayhan, who was one of the world's richest men. Zayed died on Nov. 2, 2004.