Outlet stores hanging on
Even as property heads into foreclosure auction next month, tenants remain optimistic
The Fashion Outlets of Santa Fe loom, fortress-like, on a rise south of Santa Fe, its encompassing walls a shield against the incessant wind.
Inside the towering entrance lies an oasis of calm. A recent Tuesday was no bustling shopping day. The long plaza ringed by 34 storefronts was devoid of shoppers except the one or two who crossed it periodically like sentries on their rounds.
“It’s just really quiet,” said Susan Knight of Reno, Nev., for the moment Tuesday the lone shopper visible. She had stopped at the mall to kill time before an appointment.
“We saw the sign on the interstate,” she said, “and expected a little more action.”
The mall, a presence just off Interstate 25 at Cerrillos Road since 1994, is in foreclosure. Sixteen spaces are occupied, but
the blacked-out storefronts once occupied by anchor tenants create the mood.
Oddly, inside the remaining stores, the outlook is bright.
“Honestly, we came really close to making our goal [last year], and it was like this,” said Aaron Buechley, assistant store manager at Merrell, an outdoor footwear store, holding his thumb and forefinger close enough to show a sliver of daylight. “The second we get some business in here, we’ll be good.”
The property, about 16.5 acres total, including more than 122,000 square feet of retail space, goes on the auction block at 11 a.m. May 8 at the state district courthouse in Santa Fe, said attorney Julia B. Rose. First District Judge David K. Thomson appointed Rose to oversee the sale. It was originally set for April 9 but postponed by Wells Fargo bank.
Rose said postponements are typical but she did not say why it occurred in this case. Albuquerque attorney Spencer L. Edelman of Modrall Sperling, the law firm representing Wells Fargo, on Thursday said he could not comment on the case without his client’s permission. The on-site mall manager also declined to comment.
Wells Fargo foreclosed on the previous owner, Fashion Outlets of Santa Fe LLC, a Delaware-based corporation, in January; Thomson in February approved the action and ordered the sale. The bank started the action in September, seeking to recoup the money it loaned Fashion Outlets to buy the property from CIBC Inc., another Delaware corporation, in October 2012.
Fashion Outlets, which borrowed $11 million, owed the bank $10.3 million in January, according to the foreclosure decree, including $10.2 million in principal and $267,490 in interest. An Albuquerque real-estate firm, Colliers International, is the receiver, or property manager, while the foreclosure case unwinds.
Santa Fe County assessed the property value this year at $12.25 million for tax purposes, including $9.4 million in structures.
Store managers who talked about the outlet mall said they believe the property was poorly managed. It would have benefited from more marketing, social media and event promotion that increased consumer traffic, they said. Even at Christmas, one said, the place looked bleak.
Nonetheless, some of the brands that remain, like Merrell and Le Creuset cookware, have a loyal clientele, their managers said. With a little effort, they added, the outlet mall could be a retail success.
“We have a cult following,” said Buechley. “If you want a pair of Merrell’s, you’re going to come here.”
At Le Creuset, familiar for its pastelcolored iron pots and stainless steel pans, employee Zach VanCuren said the store met its sales goals last year and is on track to meet them this year.
“Sales are good,” he said. “The brand speaks for itself. People that are coming here are coming specifically for us.”
The mall has its own rhythm, and the dead zone at midweek comes alive on weekends, said Marlene Carillo-Ambrose, manager at Tools & More!, a catch-all emporium for everything from hammers and wrenches to bug zappers and pet backpacks. The store was empty at noon Tuesday, the babble of a dozen different commercials flowing from small flat-screen TVs filling the store like ambient noise. Tools & More! specializes in merchandise that’s “as seen on TV,” Carillo-Ambrose said.
“Monday, they’re either waiting at the door” when the store opens at 10 a.m., “or there’s nobody here till 2.”
Most of the mall shoppers are Santa Fe tourists or interstate travelers just passing by, she said, echoing other store managers. November and December, the holiday season, are still busy, along with February and March, thanks to income-tax refunds, Carillo-Ambrose said. With a new owner and the right management, she said, the outlet mall could be revived. Tools & More! recently renewed its lease for another year, she said. Other managers said the same thing.
The new Presbyterian Santa Fe Medical Center going up nearby (its construction office occupies a mall space) and new residential construction point to a promising future, Carillo-Ambrose said.
“This is prime commercial property right here,” she said.
Originally known as Santa Fe Factory Stores, the outlet mall opened in 1993 at a cost of $8 million to build. It changed hands several times, acquired next by Gulfstream Group of Albuquerque, then for $9.3 million in 2007 by Talisman Cos. LLC, a Florida company. In 2011, according to a report in The New Mexican, the shopping center was nearly full. Today, only a handful of recognized brandname tenants remain, including Levi’s, Polo Ralph Lauren, Brooks Brothers and Eddie Bauer.
The loss of several large tenants in the past year really hurt mall traffic, Carillo-Ambrose said. Under Armour, Wilsons Leather, Kitchen Collection and Luggage For Less all pulled out, following Nike and Tommy Hilfiger the previous year. The touring buses and trips from senior living centers in Albuquerque dropped off, too, she said.
“Customers walk in and there’s 10 stores gone, everybody thinks this place is shutting down,” she said. “It’s never been a booming place — it never has — but somehow it survived.”
Contact Joseph Ditzler at 505-986-3034 or jditzler@sfnewmexican.com.