Willits says it doesn’t have enough square footage approved to fill space
The Aspen Times
LOOKING AT THE WHOLE PICTURE
The owner and developer of Willits Town Center is exploring options for the expansion of Whole Foods Market but hasn’t found a solution.
Evan Welsh, asset manager at Willits for Mariner Real Estate Management, said Whole Foods Market is an important part of the project, but businesses such as Basalt Bike and Ski, Bristlecone Sports, Verizon and LM Home and Design are also vital parts of the project.
Whole Foods is the anchor tenant of the development and has successfully attracted people to Willits since it opened in August 2012. There has been widespread speculation that the 26,000-square-foot supermarket wants to expand, though the publicly traded company won’t discuss plans until they are firm.
The supermarket chain signed an original lease for 44,000 square feet. The size was decreased during the recession.
Welsh said Mariner is looking for options that will accommodate all tenants affected by a possible expansion of Whole Foods. By Mariner’s account, the occupancy rate of space it owns at Willits Town Center is currently 60 percent. Another 25,000 square feet of commercial space is scheduled to be developed this year. That will knock occupancy down to 48 percent. Therefore, location might be more of an issue than space. The stores adjacent to Whole Foods have prime locations right now.
The developer of Willits Town Center claims it will run out of approved, developable square footage before it runs out of land.
That’s helping fuel Mariner Real Estate Management’s request for 91,000 square feet of additional commercial and residential space. Mariner made the request in a meeting with the Town Council on Tuesday night.
In essence, Mariner is saying it spent its allotted space, so now it wants more. It’s constructed about 320,000 of the 500,000 square feet so far, but has seven vacant blocks remaining.
The town of Basalt originally approved Willits Town Center in May 2001. The specific type of approval, called a planned-unit development, was for 500,000 square feet of commercial and residential space in an urban-style core. However, square footages for individual buildings weren’t defined so that the developer would have flexibility to react to the market.
Mariner reacted, and now it doesn’t have enough banked square footage to fill out the 12-block core. About 1.5 blocks would remain vacant if additional space isn’t approved, representatives said during a presentation to the Town Council.
“There’s been more commercial square footage used in the last four buildings (constructed) than was probably projected back in 2001,” said Tim Belinski, a local representative for Mariner.
He stressed that Mariner isn’t asking for a greater footprint or the ability to spread its development over more land. The 59,000 square feet of commercial space and 32,000 square feet of residential space being sought can be absorbed on the approved footprint — on buildings that are three stories and within the 45-foot height limit, Belinski said.
The Mariner team also said it needs extra revenue from more development to reduce its overall costs. Doing so will enable it to offer lower rents and complete the project sooner, said Evan Welsh, asset manager at Willits for Mariner.
This isn’t the first time an owner of Willits Town Center requested more square footage than the approved 500,000 square feet. Original owner Michael Lipkin and partner Joseph Freed and Associates sought approval for 120 additional residences in 2007. The proposal died during the recession.
Mariner acquired the project in 2011 after Freed and Associates faced foreclosure.
“Thus far, we have been able to maintain a consistent momentum of one building per year, but slower than anticipated retail lease-up threatens the future momentum and build-out of the project,” Welsh wrote to the council. “Vibrant retail and activity at ground level is important for the long-term success of Willits and the midvalley.”
Mariner also played the Ace card Tuesday in its meeting with the Town Council. Officials said speedy approval and construction of its expansion is needed for competitive reasons. Developer Ace Lane is seeking approval for a project that includes 135,000 square feet of commercial space across Highway 82 from Whole Foods.
The Basalt Town Council directed its staff to hire its financial consultant to dig into Mariner’s claims that it needs additional square footage to make the project more successful. A report is expected in August.