Plaza move-ins (ongoing)

[Developersanonymous]

I haven't seen this mentioned, so it's worth putting out there. I don't have the numbers in front of me, but pretty much every tenant on the plaza is a NNN tenant, so they are each responsible for their share of the real estate taxes, insurance, and common area maintenance. I believe Jackson County jacked up "The Plaza" taxes two years ago. The owners were successfully able to fight the county and show that the surrounding plaza properties did not get the same relative increases. However, I believe this past year the county decided to do it again, but they raised everyone's taxes ("The Plaza" and the surrounding plaza properties) so that it would be more difficult to fight. The result is, the tenants that were already paying the highest rents in the metro saw their monthly rent increase by thousands of dollars since the increases were passed through directly to them. I expect many more tenants will be closing their doors soon.

Additionally, the owners paid what they did for The Plaza expecting a certain return on investment. With taxes increasing, they will have to lower the base rent--which they will not want to do easily. I expect that they will eventually sell the thing for a huge loss, but that will probably come after a couple of years of struggling.

Also, I had heard that The Plaza was going to be treating Nordstrom's as a huge loss leader and were giving them practically free rent for 10 years. The plan was that it would attract more foot traffic and other high-end retail. They were saving other spaces for high-end tenants that would move in once Nordstrom's was complete. So, if it is true that Nordstrom's is out, I don't know what the agreement was, but I don't see how the Plaza owners will be able to get the retailer to pay them back.

If I were the owner, at this point I would build a huge residential tower at the Nordstrom's site with first-floor retail, preferably some kind of high-end grocer to compete with Whole Foods over by UMKC (maybe an urban target would make sense as well). I would try to keep as many lux brands on The Plaza as possible, but I think the future of retail is going to be the unique, local type of brands (Made in KC, etc... as well as dining and service options) that are seen as an amenity for residents. I would also replace the garage between the classic cup and Starbucks and build another residential tower over it. I would look at adding a couple of stories on other buildings for more apartments as well and try to keep the Spanish aesthetic going with all new builds.

I know it is sad to see the plaza "decline" but I think there is a path forward where it can thrive. It just needs to be in a completely different direction than where it has been the past couple of decades. It starts with getting rid of the ridiculous "bowl" requirements.

This is not being discussed enough. Likely a little beyond the scope of most peoples understanding of how tenants actually pay rent. People need to know a substantial portion of what tenant's actually pay in rent at the plaza is going to the city and not the owners. The taxes rise to a point where the overall gross rent factor becomes unsustainable for even the best tenants in the world. That is what drives smaller, mom and pop tenants out. not always the ownership forcing above market rents on them. It's the above market real estate taxes the City forces that causes these tenants to either leave or relocate to cheaper spots. Tenants want to be on the plaza but not willing to pay $35 per square foot for real estate taxes.... People think the owners are getting fat and happy collecting rent. WRONG. on the plaza... it's the City collecting the biggest check not ownership.

[CorneliusFB]

the school district collects the biggest portion of taxes (like 275% more than the city) even for the plaza properties.

[Highlander]

My guess is they are still proceeding with the Nordstrom construction. The Nordstrom website still lists this as happening in 2023 and there doesn't seem to be signs that they are backing out.

Uh oh haha.

This whole thread the past week started just because some dude on here claimed Nordstrom was about to fail.

Well shit, we’ve gone so far down the rabbit hole so far we made it to “we’re better off with neighborhood stores than a Nordstrom”…I hope this is a good lesson not to overreact because of an unsubstantiated rumor that a guy said in passing.

1. All rumors by definition are unsubstantiated
2. It's a KC development forum. These things will and should be discussed.
3. I've heard the same rumor and from people well connected enough that it does concern me a little. It wasn't just "said in passing".
4. If true, why haven't they announced it? Probably because (if true) there are some serious negotiations going on between the owners of the Plaza and Nordstrom after the western end of the Plaza was demolished and the existing businesses relocated. A lot was done to accommodate Nordstroms. They cannot just pull out without some consequences.
5. As mentioned before, the window of opportunity to make even a Fall 2023 opening is getting smaller by the day. They will need to start construction very soon. There is no visible activity.
7. Like you, I hope Nordstroms happens on the Plaza but I have my doubts.

[normalthings]

Plaza ownership is exploring other options but for now locked into the contract with Nordstroms.

[AlkaliAxel]

But does Nordstrom have to build out the store and still go to the Plaza too?

[alejandro46]

Generally from experience, once a lease is signed, there is no way for a tenant to just "cancel it." I have done a few deals that were related party transactions or small landlords on short leases that we could opt out or cancel, but I would be extremely surprised if they could just cancel an executed lease. They would need to sublease it. It's really no different from you or I signing a lease for an apartment, except that the landlord often is paying to renovate the space, or in this instance, build a whole new space.

[normalthings]

Generally from experience, once a lease is signed, there is no way for a tenant to just "cancel it." I have done a few deals that were related party transactions or small landlords on short leases that we could opt out or cancel, but I would be extremely surprised if they could just cancel an executed lease. They would need to sublease it. It's really no different from you or I signing a lease for an apartment, except that the landlord often is paying to renovate the space, or in this instance, build a whole new space.

Plaza has no incentive to have a single tenant, purpose-built structure go up just for it to sit empty.

[AlkaliAxel]

I’ll just simplify it-

So is Nordstrom gonna be on the Plaza or not?

[im2kull]

I’ll just simplify it-

So is Nordstrom gonna be on the Plaza or not?

Yes.

[LCDSI]

And another retailer bites the dust.

https://www.kansascity.com/news/busines ... tage_card3

Kate Spade Announced it is closing on January 23rd

[Highlander]

And another retailer bites the dust.

https://www.kansascity.com/news/busines ... tage_card3

Kate Spade Announced it is closing on January 23rd

Are they staying in the KC area?

[mgsports]

Have on at Legends.

[empires228]

Victoria’s Secret has been troubled for several years now, but it seems odd that both VS and Kate Spade would pull out now if they though that Nordstrom was going to meet their deadline. Tiffany is only still down there by a miracle. Bath & Body will never go, but I can see Express being the next to bail. There’s never anyone in there, or at Hallmark, and J. Crew is near death. They closed in Wichita last year and are closing the Leawood store as I type this. I believe Banana Republic is also near death and will be leaving two prime spots open in KC and St. Louis in the near future. The Plaza store hasn’t been the same since they moved into Z Gallerie. It’s so sparsely stocked in there anymore.

[AlkaliAxel]

Victoria’s Secret has been troubled for several years now, but it seems odd that both VS and Kate Spade would pull out now if they though that Nordstrom was going to meet their deadline. Tiffany is only still down there by a miracle. Bath & Body will never go, but I can see Express being the next to bail. There’s never anyone in there, or at Hallmark, and J. Crew is near death. They closed in Wichita last year and are closing the Leawood store as I type this. I believe Banana Republic is also near death and will be leaving two prime spots open in KC and St. Louis in the near future. The Plaza store hasn’t been the same since they moved into Z Gallerie. It’s so sparsely stocked in there anymore.

Wait so Nordstrom is actually gonna happen now?

[GRID]

Victoria’s Secret has been troubled for several years now, but it seems odd that both VS and Kate Spade would pull out now if they though that Nordstrom was going to meet their deadline. Tiffany is only still down there by a miracle. Bath & Body will never go, but I can see Express being the next to bail. There’s never anyone in there, or at Hallmark, and J. Crew is near death. They closed in Wichita last year and are closing the Leawood store as I type this. I believe Banana Republic is also near death and will be leaving two prime spots open in KC and St. Louis in the near future. The Plaza store hasn’t been the same since they moved into Z Gallerie. It’s so sparsely stocked in there anymore.

Wait so Nordstrom is actually gonna happen now?

I don't think anybody ever said it was never going to happen. I think anybody that follows retail right now would give that store about a 50% chance of opening with about another 50% chance of it closing within five years if it does open. Then Nordstrom can write off the mass loss of a new construction store. When companies start to go down the bankruptcy path, it's typically the newest stores that close first.

[msmith011]

And another retailer bites the dust.

https://www.kansascity.com/news/busines ... tage_card3

Kate Spade Announced it is closing on January 23rd

Kate Spade bags are passé these days, so this doesn't surprise me. I see this as more of a Kate Spade issue than a Plaza issue. It's still unfortunate to have the Plaza lose another retailer, though.

[empires228]

https://www.kansascity.com/news/busines ... yNJBWH8W9Q

Brighton, a chain accessory store and tenant of 20 years is leaving. Their products will still be available at their other store in Leawood and Von Maur.

[msmith011]

Michael Kors has permanently closed. Kors occupied a corner space next to Kate Spade New York in the Plaza Medical building. Similar to Kate Spade, Kors also has an outlet store at Village West.

Knowing that the Plaza has been actively trying to lure Louis Vuitton to some time, if LV were to sign a lease at the Plaza, there is no doubt that the former Kate Spade and Kors spaces would be the spot for them. Louis Vuitton demands corner spaces (check) and proximity to other luxury stores (check). Tiffany, a fellow Louis Vuitton Moet Hennesy-owned brand, occupies the opposite end of this same building.

The Plaza's Louis Vuitton pitch/leasing book: https://issuu.com/macerich1/docs/mac-09 ... _leasing-4

[LCDSI]

This is unfortunate. I hope they start filling these empty store fronts soon.

In the city scape article it seems like they confirmed Nordstrom is still going to the plaza.

The west side of the Plaza also has an empty lot waiting for Nordstrom to relocate from Overland Park’s Oak Park Mall. It had originally scheduled a 2021 opening but has pushed back the date twice, blaming the pandemic. In late January, Nordstrom said it still planned a fall 2023 opening.

Read more at: https://www.kansascity.com/news/busines ... rylink=cpy

[Highlander]

Restoration Emporium is closing on the Plaza to focus put their emphasis on their Crossroads store. The SE part of the Plaza is becoming kind of scant in terms of tenants.