[IMGCAP(2)]Craig attributes the success of Citadel and hiscompany's other outlets to a number of factors that have enabledCraig Realty to expand and prosper in an economy that has taken aheavy toll on landlords as well as retailers. For one, Craig citeshis company's ceaseless efforts to promote its centers to shoppers."We're a very, very aggressive company in terms of marketing tocustomers for our tenants," he says. The advertising budget for theCitadel alone is between $1.2 million and $1.5 million per year,with two full-time marketing people on-site. The Citadel alreadyhas high visibility by virtue of its location along the I-5, butCraig Realty has added to that high profile with eight large-screenLED signs at the center. "We want to attract the customer, and oncewe get them there, we want to keep them and keep them coming back,"he says.

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Another factor working in Craig Realty's favor is that whentimes get tough, shoppers tend to limit their spending fornon-necessity high-end items, and they look for locations wherethey can get greater value for their dollar, Craig says. "Weprobably get an additional look from customers that a high-end mallwould not," he says. He notes that the company's outlet centersouth of Denver, for example, posted a 5% sales increase lastyear.

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Craig also cites the company's constant focus on boosting sales."We understand that the goal, at the end of the day, is increasingsales per square foot. Every day, I ask people what can we do tomove the needle and improve sales," he says.

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In addition to the factors within his firm that account for thesuccess of all of the company's outlets, Craig also cites aparticular factor that has played a key role in the success atCitadel Outlets. "What's made all of this possible at Citadel isthat we are working with a very cooperative city government thatshares the vision we have and is willing to stand side-by-side withus," Craig says. "It may sound trite, but lots of cities would justas soon throw you out of the building."

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Craig Realty is the fourth owner to attempt to make a success ofthe Citadel, which operated as a UniRoyal tire manufacturing plantfrom 1931 to 1977 and is one of the most distinctive properties inSouthern California for its eye-catching architecture, in thedesign of an Assyrian palace. After it ceased operations as a tirefactory, the 50-acre property was initially redeveloped into anoffice complex with some retail space (145,000 square feet) and ahotel, which is now a Doubletree. It was later taken back by alender, then owned by the city before Craig Realty stepped in.

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"We looked at the property and said that it was just theopposite of an office project with some retail. We thought it was aretail project that might have some office," Craig says. In 2005Craig added 125,000 square feet to the original 145,000 square feetof retail, and its newest expansion will be larger than theoriginal retail component. Along the way, the company razed a42,000-square-foot class A office building last year to make wayfor the current expansion, and it plans to raze another42,000-square-foot office building next year in anticipation offuture expansion.

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Craig notes that the Citadel finished 2009 at 100% leased andhad a waiting list of tenants that it could not accommodate, evenwith a few tenants leaving, because the existing store sizes andshapes available at the center were not what the new retailerswanted. This is one of the reasons for the latest expansion.

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Even with the success throughout Craig Realty's portfolio, Craigsays his company has not been exempt from the impact of therecession. Although the company's sales-per-square-foot increasedthe aforementioned 3.8% last year, the overall sales total for thecompany's portfolio was less, at 2%, because its total of squarefootage leased declined as a result of some tenantbankruptcies.

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Along with the other factors Craig cites for his company'sperformance in these tough times is its nearly 25 years in theoutlet center business. "We think we have a pretty good formula,"he says. "We're not a company that sits back and waits for somebodyto drive in and buy something."

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