Fashion Square expands upscale

Maggie Galehouse and Erica Sagon
The Arizona Republic

Scottsdale's $1 billion-plus push to revitalize its downtown got another boost of retail Tuesday when Scottsdale Fashion Square announced a handful of new stores and an expansion of high-end retailers.

It was the latest bit of surgery in the sweeping makeover of one of the Valley's signature locales and joins an array of residential, office and other developments that will further upscale the area.

With nearly 2,600 new condominiums planned, hotels being developed or renovated, and numerous other improvements, the city's core is marching toward its most dramatic change ever in such a short time.

Mall developer Westcor's part is to add more luxury retailers to Fashion Square.

More shops are set to open this year, Westcor announced. Lucy, White House Black Market, Gucci and others will be in business for the holiday shopping season.

Leather goods retailer Coach is doubling in size with a flagship store opening on Friday, and a remodeled Louis Vuitton store will be 40 percent larger when it opens this fall.

No final decision has been made about the Robinsons-May and Macy's department stores in the mall. The recent merger of their parent companies forced many Robinsons-May stores across the country to close, but there is a chance that Fashion Square will operate two Macy's on the site.

It hasn't always been easy for the mall to attract big-name department stores and others to fill its 2 million square feet of shopping space, said Chris Stallman, Fashion Square's marketing manager.

"In the past, Scottsdale has had this stigma as a resort and retirement town," he said. "Now it's the hip place to be. I think that's driving our luxury retail."

Stallman said there is a limit to how many high-end stores can open in a mall that still attracts a variety of shoppers.

"You will never fill 2 million square feet with super luxury," Stallman said. "The market would never support that."

Westcor estimates that the average household income around Fashion Square is $92,000.

New housing downtown should bring in more than 4,000 new residents, said Scottsdale city officials. In addition, 650 new hotel rooms will draw tourists, and half a million square feet of new office space will bring more workers to the area.

All those new faces will alter the retail landscape, said Dave Roderique, economic-vitality director for the city.

"The character of retail is going to be changing in Scottsdale," Roderique said, "not so much at Fashion Square - that's fairly set - but in Old Town districts that have a strong dependence on tourism."

People will start demanding more neighborhood services that do not necessarily cater to visitors, he said.

"Instead of another Native American jewelry store, we might see a dry cleaners," Roderique said.

Scottsdale's major downtown revitalization took off in 2003, with "downtown" defined as the area that runs from Chaparral Road south to Osborn Road and from 68th Street east to Miller Road.

Already, $227 million in hotel and retail projects are complete, including the 10-year, $85 million expansion of Scottsdale Healthcare Osborn Campus.

Projects now under way account for an additional $946 million. Those include the 11-acre Scottsdale Waterfront, which will combine housing, offices and shops, and Optima Camelview Village, 13 acres of condominiums and retail. Each of those projects carries a price tag of $250 million.

Construction has yet to begin on an additional $210 million in new projects, including the $90 million Riverwalk Square, northeast of Scottsdale and Camelback roads. Located across the street from Fashion Square, the site will have a mix of retail and office space with pedestrian plazas and canal bank improvements.

"When you look at all those things together, it creates a real positive opportunity for retailers," Roderique said. "The more people close by, the more likely you're going to get additional shoppers."

Scottsdale's polished image and growth potential are also attractive to retailers who want to open flagship stores or enter the Arizona market for the first time, said Anita Walker, marketing manager for Biltmore Fashion Park.

But even longtime fixture Scottsdale Fashion Square, which grew from a folksy, open-air center in the 1960s and 1970s into a chic mall, has found a way to reintroduce itself.

Fashion Square is freshening part of its main outdoor entrance to be more pedestrian friendly, in response to the Scottsdale Waterfront mixed-use development across the street. The project will feature luxury condominium towers, offices, retail and restaurants.

Tenants include P.F. Chang's China Bistro, Borders bookstore, Eddie V's restaurant, Urban Outfitters clothing and Pink Taco restaurant, a spinoff from Las Vegas' Hard Rock Hotel.

Westcor said Scottsdale Waterfront will complement the mall.