Biltmore Fashion Park sells for $159M in cash - East Valley Tribune: Business

Biltmore Fashion Park sells for $159M in cash

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Posted: Thursday, August 28, 2003 11:12 pm | Updated: 1:18 pm, Thu Oct 6, 2011.

The Valley’s highly aggressive rivals for upscale shoppers and the shops that attract them are suddenly siblings.

Scottsdale Fashion Square parent Macerich Co. said Thursday that it bought Biltmore Fashion Park for $158.5 million in cash, partnership shares and assumed debt.

The deal, which has already been approved by the boards of Macerich and seller Taubman Co., is expected to close before year end.

The deal will end the Scottsdale shopping center’s nearly decade long attempt to wrest the designer designation from the venerable Biltmore. And it could net the Valley some new coveted retailers.

“This may make it easier for some retailers to enter the market,” said Malachy Kavanagh, spokesman for the International Council of Shopping Centers. “Macerich can use their size and leverage to move retailers around, and there are economies of scale because they can bundle services.”

Since Scottsdale Fashion Square aimed to go upscale in the early 1990s, and especially since the Nordstrom wing was completed in 1998, the two malls have been in a battle for boutiques. Scottsdale won Nordstrom, Tiffany and Dana Buchman. Biltmore landed Saks Fifth Avenue, Cartier and Gucci. Neither bagged Bloomingdale’s.

The move could send some of Scottsdale’s hard-won retailers to Phoenix’s exclusive Camelback corridor, but for Macerich and its Valley-based division Westcor, it’s all in the family.

“For so long we have been competitors, this will be a tremendous opportunity,”said Tracey Gotsis, Westcor senior vice president. “Right now both properties are very successful, but we’re going to look at both and see where the individual retailers could be most successful. We think that’s the No. 1 benefit of this. We’re excited.”

Santa Monica, Calif.-based Macerich bought all the Westcor shopping centers, including Scottsdale Fashion Square, Mesa’s Superstition Springs Center, Chandler Fashion Center and Paradise Valley Mall in Phoenix, among other indoor and outdoor malls throughout Arizona, just a year ago for $1.5 billion. The company has been eyeing Biltmore Fashion Park ever since.

“We are pleased to add Biltmore to our regional mall portfolio," Macerich president Arthur Coppola said in a statement. “Until 1998, when Scottsdale Fashion Square underwent a $100 million expansion, Biltmore was the sole major fashion mall in Phoenix. Putting Scottsdale Fashion Square and Biltmore under common ownership creates a great opportunity for these two highly productive centers to complement each other. Since Macerich agreed to buy Westcor last year, we knew that the acquisition of Biltmore would make a tremendous amount of sense for both Taubman Centers and us."

Taubman, which also owns half-interest in Arizona Mills Mall in Tempe, was not hawking Biltmore, said Taubman spokeswoman Karen MacDonald, but the company was willing to unload the exclusive retail mecca for the right price.

“It’s a fabulous shopping center. It generates sales of $430 a square foot, and it’s 90 percent leased,” MacDonald said. “The timing was just right. It’s part of our strategy. We divest, we acquire, we build.”

MacDonald said Taubman has no plans to unload its interest in Arizona Mills. Taubman is the object of a hostile takeover attempt by another retail giant, Simon Property Group, but MacDonald said the Biltmore sale would not be impacted whether Simon is successful or not.

Biltmore Fashion Park, a 611,000-square-foot, open-air shopping center at 24th Street and Camelback Road in Phoenix, will be run as a Westcor mall, Gotsis said. That means it will have all Westcor perks from branded advertising to all-mall gift certificates. But Biltmore can retain any of its signature traditions, such as the poinsettia trees during the holidays, she said.

The Biltmore management team, including general manager Linda Whitlow, will continue to run the upscale center, Gotsis said. The possible addition of another retail wing to Biltmore, which has been in limbo for several years, and proposals for adding residential and office space, could happen under the Westcor regime, she said. “All options are still out there,” Gotsis said.

For shoppers, mall ownership changes are nonevents, Kavanagh said. “The average customer has no idea who owns a shopping center,” he said. “They go there for the stores.

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