Ten years later, Waukesha's largest shopping center, The Shoppes at Fox River, is booming

WAUKESHA - The scene along Sunset Drive just over a decade ago garnered little attention from anyone, let alone trendy shoppers.

On the north side of the road between Sentry and Oakdale drives lay an old vacant warehouse, once the home of Sentry-parent Godfrey Co., a Waukesha-based food distributor, which was bought out in 1987 by Flemings Cos., which supplied a generation of local supermarkets before its acquisition by grocery wholesaler Supervalu Inc. in 2003.

By 2008, the sizable parking lot was overgrown with weeds that pushed their way through cracks in the blacktop and served as the foreground to an immense old grey blue building. The weeds were the only colorful part of the scene.

Supervalu, which had purchased Flemings' warehouses in Waukesha and La Crosse, wasn't interested in using the old warehouse for its wholesale operations.

But there was someone interested in the land beneath it, and not for its incumbent industrial nature. Within its vision, The Opus Group pictured an eventual sprawling campus of retail stores and restaurants far larger than Waukesha was accustomed to at that time.

Today, most people don't need to do a Google search to pinpoint the Shoppes at Fox River, a 467,000-square-foot property that this year has added three more high-profile tenants to its mix: Old Navy, Skechers and Bath & Body Work. Two more, Tuesday Morning and Torrid, are on the way.

The shopping center, which initiated its third phase of construction in 2016, is again nearly fully leased, anchored by three big-box companies: Target, Hobby Lobby and Pick ’n Save.

Measuring success

It's perhaps stating the obvious to say The Shoppes at Fox River has been a success, given the multi-phase growth and the few vacancies as the center enters its 10th year in operation.

A quick count shows that, with its latest announced tenants, the 45-store property now has only four vacancies, including two in the newest additions that haven't been previously occupied. Vacancies caused by departures — most notably Rue 21, Famous Footwear and Batteries Plus, have been quickly filled, usually within a year.

But there are other measures to support the visual evidence of success.

From the city of Waukesha's standpoint, it has to do with the performance of the tax incremental financing district that Opus sought as an incentive to take on a major development.

"We see the Shoppes at Fox River as a great success," said Jennifer Andrews, the city's community development director. "The development transformed a vacant distribution center with a value of $7.3 million to a vibrant neighborhood shopping area serving the southwest side of the city with a $60 million value."

In fact, the increase in property values has fed the TIF district so well that the initial debt — used primarily for infrastructure work and environmental cleanup on the land beneath the Shoppes — could be paid off as soon as 2019, eight years earlier than anticipated, according to information from various city sources.

Based on the TIF district performance, city officials are also hoping to use the estimated $1.7 million in revenue — that is, property taxes generated from improvements above the taxes it generated beforehand — to extend the district's boundaries to fund further improvements for its Mindiola Park athletic complex further to the east off Sunset Drive. (That proposal must first be approved by a joint board made up of officials from the other tax jurisdictions who stand to benefit from the full release of tax dollars generated within the TIF district.)

But for Andrews, the measure of success is more than simply about the city's financial investment in the development.

She noted other aspects that make it a "quality" development — its willingness to support public art displays, its support of the idea of connecting the center to public bike trails nearby, and its pleasing aesthetics throughout the development.

"The project has exceeded the city’s expectations in terms of value, success and design," Andrews said, noting how the Shoppes at Fox River draws in patrons, especially on the southwest side of the city and beyond.

More than expected

It also has exceeded what Larry Nelson envisioned.

Nelson, now a Waukesha County Board supervisor who served as Waukesha's mayor when the Shoppes at Fox River was first proposed and when its first stores opened in 2009, couldn't be happier, especially given what the neighborhood looked like before it all began.

"If you have been around that long, you can remember how the Flemings site was just a vacant lot forever," Nelson said, recalling how the industrial-zoned site briefly appeared it might be repurposed by Generac Power Systems before Opus stepped in with a better offer to Supervalu.

He noted that the weeds have been replaced by a center filled with green space and trees to soften the massive commercial expanse.

Nelson believes the support offered both by him and Waukesha Common Council aldermen were critical in several phases of retail development, including the Shoppes at Fox River in 2009 and the new Walmart supercenter store off West Avenue and Highway 59 in 2008, along an area of the city that needed it. And that does not include the nearby mall where Kohl's opened on St. Paul Avenue

"When I became mayor in 2006, the one real vital shopping center (in Waukesha) was near I-94, where the original Target is," Nelson said. "I felt that area should remain strong, ... but I felt the south side of the city was really under served with retail."

The city got what it wanted, and then some.

"The success of the Shoppes at Fox River have exceeded my high expectations for it, because when the first phase was completed (in 2009) it already was the largest shopping center in Waukesha history," he said. "And now with the additional phases, it's (much larger)."

Such successes, he said, likely caught the attention of other developers and retailers. Nelson credits the Shoppes, in part, for drawing Meijer to Waukesha's Sunset Drive location to the east when it began shopping for prime locations in southeast Wisconsin.

Outside advantage?

The Shoppes at Fox River's success comes at a time when malls — that is, the enclosed shopping centers that for a while seemed like the only way to shop after they were introduced more than 60 years ago — are struggling.

The Shoppes' nearest enclosed competitor, Brookfield Square, has seen two of its three anchor tenants disappear — one permanently, given the redevelopment of the Sears store into an entertainment and dining complex.

While the smaller retail stores that fill Brookfield Square have largely kept the mall from a definite downward spiral, the tenant mix has changed. Some of those retailers have simply gone out of business. Others have changed their focus.

For some, that focus shifted to Waukesha's largest shopping center.

Among the retailers previously identified almost exclusively with enclosed malls are Old Navy and Bath & Body Works, both of which opened this year at the Shoppes at Fox River.

Skechers, another store seen often, though not exclusively, at enclosed malls, also joined the Shoppes' mix, joining Old Navy in the center's third-phase addition off Chapman Drive.

One manager at those stores, who spoke anonymously, stated her viewpoint succinctly: "Malls are dying," she said.

Her view was shared by at least one California shopping center developer, Rick Caruso. According to Michael Baker, the principal of Baker Consulting, Caruso reportedly told a gathering at National Retail Federation's annual convention in 2015 that "within 10 to 15 years, the typical U.S. mall, unless completely reinvented, will be seen as a historical anachronism, a 60 year or so aberration that no longer meets the public’s, the consumer’s or the retailer’s needs."

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But others see the shift as part of the fine tuning of retail in an era when Amazon.com and online venues prompt new strategies.

"I think that shoppers are looking for a unique and authentic experience if they shop in person versus online —  an experience that is similar to what you have in a downtown shopping district like downtown Waukesha," Andrews said, from her standpoint dealing with community development initiatives. "Open malls seek to create this overall shopping experience with natural amenities, dining, entertainment and diverse retail products.

"Enclosed malls are now also more focused on the overall shopper experience as well," she added. "You can see this with mall renovations where they are adding entertainment venues, outdoor dining and natural areas."

The new tenants at the Shoppes point to that evolution and purpose, Andrews said.

"I think the new tenants add to the healthy mix of products, services and price points in the center," she said.

Nelson also thinks outdoor malls offer an advantage — at least if they are designed for convenience as the Shoppes at Fox River have been.

"I think people like it where there is adequate parking, and even in bad weather it's not far to run inside," he said. "It is the largest shopping center in the city, but it is easy to navigate around."

Forward momentum

But is it a trend that open-air shopping centers expected to continue? Difficult to say.

The current owner/developer of the Shoppes at Fox River, Ramco Properties, declined to comment on that topic and refused repeated attempts via email and phone messages to comment on the center in general.

Regardless, the impact on the shopping center has had on Waukesha is obvious, Nelson said, especially when combined with other retail advancements, such as the addition of Walmart and Menards in the city.

"I think the Waukesha of 2018 is a much more vibrant place to live than it was in 1976, when I moved here for a teaching job," Nelson said. "It was pretty dead at that point. ... I'm happy to say the renaissance of Waukesha is continuing."