Shopping Center at Former Farah Site Leading El Paso Retail ResurgenceVic Kolenc
El Paso Times
An improving national economy along with more national retailers paying particular attention to Hispanic markets have helped increase retail center development in El Paso, experts said Wednesday.
The resurgence is being led by the $100 million shopping center planned for the former Farah factory site on the East Side, retail center developers said at an El Paso conference.
The Fountains at Farah has letters of intent or leases from retailers and restaurants for more than the 600,000 square feet of retail and restaurant space that will be available at the center, said West Miller, president and owner of Centergy Retail of Dallas. Centergy is a partner in the project with Western Refining chief executive officer Paul Foster, who owns the Farah site.
Miller wouldn't say how many businesses have signed leases, but he hopes to have national, regional, and local retailers and restaurants which will allow work to begin on the 55-acre site in October or November, he said.
Some stores could open by fall 2012, with the full center likely to be open by spring 2013, he said. He would not divulge names of prospective tenants.
Miller was among 90 people who attended the International Council of Shopping Centers Hispanic Markets conference at the DoubleTree Hotel -- it's one of several Hispanic market conferences being held by the group in several cities this year.
Adam Frank, president of River Oaks Properties, one of El Paso's largest developers and operators of strip shopping centers, said retailers are "under pressure to open new stores" as the national economy improves.
The Hispanic market also is becoming more powerful and will continue to get stronger, he said.
River Oaks has three small centers under construction and one East Side center set for redevelopment. Those will house local and some national and regional retailers, he said.
River Oaks this year also plans to remodel a Downtown building at the intersection of Mesa and Texas to house a national clothing retailer that, he said, is expected to sign a lease soon.
"This is the most construction we've had in three-plus years," Frank said.
Even with retailers again looking to expand, El Paso retail developers said a challenge they face is convincing some national retailers that Mexican shoppers crossing the border to shop in El Paso make this a much stronger retail market than El Paso's low-income demographics would indicate.
Some national retailers will not factor in shoppers from Mexico in their site-selection models, Miller said.
Mexican shoppers account for about 16 percent of retail sales in El Paso, according to numbers from the Federal Reserve Bank of Dallas' El Paso branch. Several shopping centers and Downtown stores report much higher percentages of sales to Mexican shoppers.
Last year, shoppers from Mexico spent an estimated $1.4 billion at El Paso stores and restaurants, bank economist Roberto Coronado reported at the conference.
Jose de Jesus Legaspi, president of The Legaspi Co., a shopping center developer based in the Los Angeles area, said he spends a lot of time educating national retailers about adjusting their site-selection formulas to better reflect the affects of not only Mexican shoppers coming into markets, but also to account for the differences in Hispanic buying habits.
Hispanics are a young population, so they tend to buy more children's clothes, more shoes, and more electronic devices, he said.
"There are no real numbers for the Mexican (national) shopper, so people tend to follow trends," Legaspi said.
That's why Cielo Vista Mall, which, he called El Paso's retail sales leader, is a place that national retailers look when researching this market. That's helped the proposed Fountains at Farah project, located next to Cielo Vista, attract retailers, he said.
Cielo Vista officials in the past have said about 25 percent of its shoppers are from Mexico.
Bassett Place surveys found as many as 27 percent of its shoppers are from Mexico. The percentage declines at certain times of the year.
The Outlet Shoppes at El Paso estimated 75 to 80 percent of its sales are to Mexican shoppers, Beth Parkinson, the center's marketing director, reported during a panel discussion at the conference.
Growing sales at the 4-year-old, West Side center has it going forward with plans to add another 201,000 square feet of retail space, Parkinson said. It currently has 378,000 square feet of retail space with about 90 stores. Not all space in the proposed addition has been leased yet, but construction is projected to begin in the fall, she said.
Mimco, another large El Paso strip center developer, has a Northeast center under construction, and a West Side center under redevelopment, reported Bob Ayoub, Mimco president.
"The market is perking up," he said.
Legaspi said the nation's growing Hispanic market, which, he said is almost 50 million people with $1 trillion in expendable income, is also attracting attention of retailers based in Mexico.
More Mexican retailers will come into the U.S. market in the future, and since El Paso is next to Mexico, it likely will get some of them, he predicted. The Mexican retailers include supermarkets, movie theater chains, and electronics and clothing sellers, he said. El Paso has seen more Juárez restaurants and other businesses locate here to escape the drug-cartel violence there.