Outlet mall planned

skyline, has weathered more than a few rough patches. During one downturn in the 1990s, he was forced to turn over a stake in a downtown office tower only to rebound with high-profile projects across the globe.

For Carter, the Savannah project is a chance to salvage his own rebound. His family has been involved in Atlanta real estate for decades, and his biggest success was developing the Mall of Georgia, the nearly 2 millionsquare-foot behemoth in Gwinnett County that opened in 1999.

In the mid-2000s, he turned his sights on building a luxury mixed-use center in the heart of Buckhead, buying up aging stores and seedy bars along Peachtree Road at eyepopping prices. He paid more than $169 million to assemble the land along the six-block complex, and planned to replace it with Atlanta’s very own Rodeo Drive.

The project was financed by a $170 million loan from the Bank of America and $150 million in other funding from CBRE Investors. Carter and three partners pumped at least $20 million of their own money into the project.

But their timing couldn’t have been much worse. Construction halted on the project in early 2009 as the economy spiraled ever downward, leaving a large gaping hole in the heart of Buckhead as Carter searched for the additional $200 million he said he needed to finish the complex.

“Timing is everything in a lot of businesses and it was a perfect storm, even though my team and I did a lot of heavy lifting trying to fight it,” he said. “The recession lasted way too long to weather it.”

Ultra-luxe retail districts such as Rodeo Drive, Lincoln Road in Miami or New York’s swank Fifth Avenue aren’t born overnight. Streets of Buckhead attempted to do just that.

But Ryan McCullough, an economist for the real estate research firm CoStar Group, said creating from scratch such destination districts requires capturing the attention of international clientele as well as having a core affluent market to sustain it.

“It’s hard to develop new luxury nodes like that,” he said.

In late 2010, San Diego-based OliverMcMillan took over the development from Carter. By then, the project’s vision was significantly revamped, as five-star hotels, an office tower and condos have been replaced with a scaleddown version of apartments and high-end retail. Construction resumed earlier this year.

Carter retreated from the public scene after that, and he still smarts he couldn’t carry out the Buckhead project. Although he called it a retirement, he now says he was waiting for the credit market to loosen and the retail sector to pick up. He said that’s what drew him to propose a $200 million project in Pooler off I-95 that would break ground next spring.

It’s not his first outdoor mall. He developed the St. Johns Town Center in Jacksonville with Simon Property Group, a thriving shopping draw that opened along a busy street in 2005. The Pooler project comes from a similar blueprint, aiming to attract millions of tourists along the highway with four anchor stores, a food court and restaurants along with a wide range of shops.

“I have a hard time passing up a good piece of dirt. My strength in the past has been finding markets where there’s an opportunity, and I thought this would be one to pursue,” said Carter, a 58-year-old who splits time between Georgia and Florida. “I’m not planning on being as active as I was in the past, but when opportunity knocks, I’ll answer.”

Retail construction was slowed by significant overdevelopment during the boom as well as the growth of online shopping. In third quarter 2006, 192 million square feet of new retail space — the equivalent of 128 Perimeter Malls — was under construction nationwide, according to the CoStar Group. In the quarter ended this September, only 30 million square feet of new retail space was under construction.

As overall retail construction has waned, though, outlet development has thrived. There’s now 2.3 million square feet of outlet center space being built across the country, six times more than six years ago, said McCullough, the CoStar economist.

“That’s the one area that’s bounded back since the end of the last cycle,” McCullough said.

Even so, it’s no slam dunk. Vacancy at U.S. outlet centers in the third quarter stood at 7.5 percent, up from 3.1 percent in 2006.

Yet Carter’s new venture has good potential, said Ron Kurtz, president of the American Affluence Research Center.

Kurtz said high-end retailers such as Saks Fifth Avenue and Nordstrom have seen some of their best sales growth in their outlet centers, reaching buyers who cut back during the Great Recession.

Carter knows that while his next move is a far cry from the Streets of Buckhead, it’s still risky. Aside from a venture with his son to build Steak & Shake restaurants in South Carolina, this is the biggest project on his plate.

“We’re mall developers and large retail developers, and this one is more typical to what we’ve done before,” Carter said. “We’re going back to the basics.”