BY LUCY MAY and LISA BIANK FASIG
The Cincinnati Enquirer
Downtown Cincinnati faces competition from Kenwood Towne Centre in trying to attract a Nordstrom department store to Greater Cincinnati, an industry source has told the Enquirer.
Cincinnati economic development officials say an elaborate riverfront project is predicated on landing a Nordstrom store at Fourth and Race streets that could be connected to the waterfront over Fort Washington Way.
If the upscale retailer chooses to build at Kenwood, city officials and developers fear, other downtown retailers might leave, threatening downtown's retail base.
Representatives of the Mills Corp. and Towne Properties, which jointly own Kenwood Towne Centre, could not be reached for comment. Paul Sauer, general manager of Kenwood Towne Centre, said Wednesday he could not "in any informed way" confirm or deny the tip. But, he said, all mall representatives keep continuous contact with retailers as a part of doing business.
"The reality of our industry is that we talk to everybody, that's our business. Whether it's Saks Fifth Avenue, whether it's Lazarus, whether it's McAlpin's."
The industry source said that, all things being equal, Nordstrom likely would go to Kenwood instead of downtown.
"Obviously, a retailer would prefer to go to an existing center with sales as good as Kenwood's," the source said.
Cincinnati Economic Development Director Andi Udris rarely talks to reporters about Nordstrom by name. But he said he fears if Kenwood lands "the unique, fourth retail anchor" the city is courting, Saks Fifth Avenue could leave downtown, too.
Saks officials in New York did not return calls to respond to Mr. Udris' comments.
The city signed Saks to a $1-a-year, 65-year lease that began in early 1983. In 1995, after a few years of losses at the store, the city prepared a $2.3 million incentive package designed to encourage Saks to stay downtown 11 more years.
"If this fourth anchor goes to Kenwood, Saks would have to re-evaluate its position in downtown," Mr. Udris said.
That could mean the beginning of the end for downtown's retail presence, he said.
"It's not going to stay stagnant, it's going to move," he said. "And all the investment the public's made will basically go down the tubes."
Herman Renfro, the Indianapolis developer putting together a riverfront development proposal for the city, said market research shows downtown Cincinnati is no longer a regional shopping draw. "Downtown retailing needs the critical mass to move forward, to be a regional draw," he said.
Nordstrom's cachet, as well as its dedication to customer service, has made the retailer a favorite among department store consumers. Analyst Jay Meltzer with LJR Redbook Research said the retailer in 1997 posted sales per square foot of $384, about twice the rate of many U.S. department stores. Case in point: Mercantile Stores Co. Inc., parent of McAlpin's, posts an annual average of $180-per-square-foot at its stores.
As a result, the arrival of Nordstrom in a market typically means a stepping-up of activity among surrounding retailers.
"We're primarily focusing on the Northeast and Southeast U.S., although there is still plenty of room to grow in the Midwest," said Nordstrom spokeswoman Brooke White.
She said Nordstrom is expanding primarily into suburban mall locations, and would eventually like to be in the top 50 metropolitan markets. It is in half of them now, including a recent Cleveland location. Cincinnati, as well as Columbus, were among the 50 largest U.S. cities by population in 1994, the most recent year for such information.
As it's currently envisioned, a downtown Nordstrom store would sit at the corner of Race and Third streets with its main entrance at Fourth and Race streets. Mr. Renfro envisions a galleria of smaller, specialty shops at the Fourth Street entrance leading to Nordstrom. The city expects to spend as much as $20 million to purchase and clear the Fourth Street site for a Nordstrom store.
It's unclear where the retailer would locate at Kenwood. The industry source suspects the marriage of Nordstrom and the mall would work only if Parisian left its spot at the mall at the corner of Montgomery Road and Kenwood Avenue. That would leave a prominent spot for Nordstrom.
Representatives at Proffitt's, the parent of Parisian, did not return calls for comment.
David Gosling, a state of Ohio eminent scholar in urban design and a former retail designer, questions whether the 147,500-square-foot Parisian format is big enough for a Nordstrom. The nearest Nordstrom store, in Indianapolis's Circle Centre, is 210,000 square feet. The average Nordstrom department store is 200,000 square feet. He also wonders whether Kenwood represents too many technical difficulties -- it doesn't have a readily available development space, while downtown does.
"I'm sort of ambivalent," he said. "Downtown, to be fair, has taken some pretty great strides."
