A new vision for Havasu’s mall: omnichannel retail
Lake Havasu City business owner Jarrett Portz has big plans for The Shops at Lake Havasu, and the PED is working to encourage retailers to fill many of the mall’s vacant storefronts. Portz and mall stakeholders gathered at The Shops to discuss the mall’s future prospects with city officials.
San Diego-based Capital Real Estate Ventures struggled with the property, according to Lake Havasu City Partnership for Economic Development President James Gray. Capital Real Estate was operating the Shops at Lake Havasu at a loss of $400,000 before choosing to donate the property to the PED in November. Acquiring the property was a risk, Gray said, and the PED wasn’t equipped to manage the Shops at Lake Havasu.
“Four partners each gave $100,000 in reinvestment funds,” Gray said. “Those funds are to be only spent in The Shops at Lake Havasu for the benefit of this going forward … our ultimate goal is to get occupancy up, to enhance entertainment, attract restaurants and to right-size operation of the mall.”
Portz expressed interest in the property and saw opportunities for future expansion of the space, Gray said. Portz took ownership over 200,000 square feet of space at the city’s mall last week, about 90 percent of which remains either vacant or has never been occupied more than a decade after the Shops at Lake Havasu were opened.
Portz’s portion of the mall’s ownership comprises less than one-third of the location’s total space. The approximate 500,000 square feet comprise anchor stores at the location including JCPenney, Walmart and Dillards.
Councilman David Lane asked how many jobs could be created by such an expansion. Gray could not provide an exact number in advance of business’ occupancy at the location.
“I believe he’s the right person to make this work,” Gray said. “He’s a private equity guy, but what he really does is he turns companies around or accelerates their growth. He has a vision for this space, but he’s also very well-connected with people who can realize this in a bigger capacity.”
Portz declined this week to comment on the purchasing price for The Shops at Havasu, and records of the purchase were not yet available from the Mohave County Assessor’s Office as of Tuesday evening.
Portz met with Mayor Cal Sheehy, members of the City Council, PED officials and Lake Havasu Area Chamber of Commerce representatives Tuesday morning to discuss his plans for expanding restaurant and retail opportunities at the property.
“I grew up in Lake Havasu,” Portz said. “I moved to Havasu when I was in junior high. I’ve lived here a very long time, I went to high school here … I know it’s corny, but I really love this community. I think it’s an under-utilized community for a lot of reasons but I think we’ve got a lot of potential.”
According to Portz, however, making the mall a success will require a new business format.
“In 2005, the biggest retailer in the world was Walmart,” Portz said. “Now it’s Amazon. That’s a big change, and it didn’t take a very long time.”
Brick-and-mortar retail businesses aren’t the economic drivers they once were. According to Gray, the future of The Shops at Lake Havasu could rely on the use of omnichannel retailing, an approach to sales and marketing that incorporates a combination of mobile-browsing, internet shopping and brick-and-mortar customer service. It’s a trend that’s already caught on at the mall’s three anchor stores: Dillards, Walmart and J.C. Penney.
No stranger to omnichannel retailing is another Havasu business, Our Pampered Home, which has in the past decade become one of Amazon’s top 50 online sellers. Our Pampered Home owners Tom and Megan Sanders announced Tuesday they would be opening a new Our Pampered Home storefront and shipping center at the Shops at Lake Havasu earlier this year.
“If big is good, then bigger is better, and even bigger is better than that,” Tom Sanders said. “People can come in, or look at our products online. They can buy products in the store, on our website or on their phone.”
A continued presence at the business’s physical location, as well as an online store presence, benefits Our Pampered Home, businesses like it, and the company’s customers. “The beautiful thing about omnichannel retailing is that nothing is ever ‘sold out’ for us,” Megan Sanders said.
Our Pampered Home employs about 40 Havasu residents, and that number is expected to increase at the company’s floor space expands at the Shops at Lake Havasu, according to James Gray. The goal of The Shops’ future expansion isn’t merely to create jobs, however, but to draw other retailers to the mall as shoppers’ activity increases.
“Omnichannel business can attract other businesses,” Gray said. “We would love to be operational by the end of this year … there are tons of parcels we need to get developed, but this has to be a progression of wins.”
According to Portz, Our Pampered Home’s pending opening at The Shops at Lake Havasu could go far in asserting the mall’s viability to other investors.
The PED and Lake Havasu City are not expected to have financial involvement in the mall property, according to Gray. With ownership of the mall’s unanchored 200,000 square feet of property, Portz is expected to assume much of the risk of the mall’s investment.
“The city still stand to get a lot of tax revenue if we pull this off,” Portz said.
While the city will not have direct financial involvement in the future, however, the city will continue to pay for its past financial involvement. When The Shops at Lake Havasu were commissioned in 2005, city officials agreed to reimburse 50 percent of a two-percent sales tax collected at The Shops at Lake Havasu to original developers, Wolford Development Inc. The city also agreed to repay about 11.9 million for initial improvement of the property. Those payments are now being made by the city to Alabama-based Regions Bank, and will continue until 2020, according to the terms of the agreement.