Prime Facelifts San Marcos

The Baltimore-based outlet giant is spending upward of $25 million to add 160,000 sf of class A retail space and renovate its flagship Prime Outlets-San Marcos, a shopping destination annually attracting six million "guests"--the preferred term of Prime Retail president Robert Brvenik. Prime's chief says that he is more than confident that foot traffic will significantly increase when the full-body makeover is done.

With more room to build, Brvenik's already eyeing options for the next grand play, possibly a hotel. He won't say just how much acreage is available, but he admits he's been talking with several prospects about the adjacent open land.

"Anything that I do, I want to make sure it's the same caliber," Brvenik stresses to GSR. "When we have the correct tenant for that, we'll do a deal." A hotel tenant is a likely choice, but it's not the only one that Brvenik's considering. He's not going into detail, at least not now.

"My main focus is getting the expansion opened and getting it done right," Brvenik says. "It's the most anticipated project this year in the industry."

Prime Retail, owned by the Lakewood, NJ-based Lightstone Group, scored its latest coup came from an existing tenant--Pottery Barn, which has dropped anchor on a 65,000-sf building. The store will open in Q2. Brvenik says Fitz and Floyd Inc. is waiting in the wings for the 14,600-sf upcoming vacancy.

The Williams-Sonoma Inc.-owned Pottery Barn is taking over a building that previously held the Home Co., one of two furniture stores that Prime Retail opened and then closed a couple years ago when the concept didn't take root. With a waiting list for space in the destination outlet, Brvenik says the 65,000-sf building has been filled at all times by short-term tenants. "We were waiting for the right use," he says about a decision by Pottery Barn to open one of the largest stores in its lineup in the space.

The San Marcos redesign began in September 2004. The Fort Worth-based Carter & Burgess Retail Centers Group has been the mastermind. Two of the U-shaped center's eight buildings were razed so ends could be extended for a four-building expansion. A 28,000-sf, two-story end cap was snatched up by Neiman Marcus Last Call, which is slated to open in September.

Carter & Burgess' leads were Randy Stone in the headquarters office and John Larsen in Baltimore. "It's been a fast-track construction process," Stone says. "We are still issuing drawings."

The concrete work is done and the steel is en route. "They are just on the cusp of going vertical," Stone says. White Construction Co. of Austin is the general contractor.

The designers' biggest challenge came from the existing space. Large hacienda-style facades were removed and replaced with classic Venetian fronts. "It's easy to do new," Stone says, "but it's more challenging to go into an existing center and catch that same flavor."

The "new" San Marcos isn't a replica of Venice's famous Piazza San Marco. "It's a literal recollection. We haven't tried to copy anything," Stone stresses, except of course to draw on the ambiance.

The makeover is bringing a 150-foot bell tower, piazzas with statues and gardens and a lagoon laced with canals and gondolas. "The details, the ornamentation lends itself to creating a more vibrant shopping experience," says Matthew Beam, a Carter & Burgess designer.

Positioned off of Interstate-35, Premier Outlets-San Marcos sits at the gateway to the Texas Hill Country, a honeycomb of panoramic mountains with high-end residential enclaves and country towns. Premier Outlets-San Marcos flies flags from the creme de la creme of moderate to high-end retail, offering a 30% to 70% discount mecca to create a surefire magnet for tourists and locals alike who flock to the Hill Country for getaways.

The industry buzz about Prime Outlets-San Marcos' expansion has driven some retailers to hold "sneak previews" in smaller spaces while they wait for work to finish on their larger stores. Hugo Boss Factory, lighting a spot last month, will transition into a 4,500-sf prototype space when the expansion phase is done. Pancaldi 1888 is taking the same tact as it waits on a 3,000-sf space to be completed. To the Max, part of the BCBG/Max Azria Group, opened nearly four months ago; it has dibs on 2,500 sf. Yves Delorme, also up and running, will take over 2,031 sf on a permanent basis in the spring. Reservations are in for a Salvatore Ferragamo Company Store, BeBe, Calvin Klein, Bennetton and Ermenegildo Zegna. So far, the retail destination has managed to stack the deck with the first To the Max store in the country and the only Hugo Boss and Ferragamo locations in Texas.

"This is an industry built on great brands. No matter where the economy goes, it seems the luxury component remains strong," Brvenik says. "We're trying to create one of the most sophisticated and guest shopping facilities in the country. San Marcos will be one of the most sophisticated, specialty outlet centers in the US when it's all said and done."