Mall of America's $325 million addition will open in stages

When the Mall of America begins to pull back the curtain next month on the biggest addition in its 23-year history, it won't have a lot to show.

The $325 million expansion on the north side of the mall was initially expected to be completed in August. Instead, it will open in stages and much of it may not get filled until next year, well after the upcoming holiday shopping season.

In mid-August, the addition's third-level food court, called "Culinary on North," will be open for business. But the initial tenants will be eateries which were displaced during the construction, to be followed in the months to come by other yet-to-be-identified sit-down and fast-casual restaurants new to the mall.

In November, mall officials say shoppers will be able to access the first and second levels, including the mall's new "front door" and a 6,000-square-foot atrium. That same month, a 342-room J.W. Marriott Hotel attached to the addition will also open. The opening of a seven-floor office tower that's also part of the project hasn't been set.

Eventually, dozens of new restaurants and stores are expected to fill the 163,000 square feet of new retail space, joining the 520 shops already in one of the nation's top tourist destinations. But the mall's executives haven't yet announced any of the new stores and are still in active negotiations with prospects.

Jill Renslow, the mall's senior vice president of business development and marketing, said she's "thrilled" with the conversations the mall has had with potential retailers.

"It's a really unique opportunity for a retail center to have this much square footage of contiguous space where we can place new retailers," she said. "It's given us a chance to step back and make sure we put the right mix of retail in place."

Mall executives are aiming high, hoping to make the addition more of a luxury wing that will be more attractive to tourists. But higher-end retailers tend to move slower and be pickier about their locations, which is having an effect on the pace of the mall's deal-making, Renslow said.

"They do a lot of research in the marketplace to make sure it's a good fit," she said. "It takes time. And they like to go in clusters. They won't do a one-off."

In other words, a brand like Gucci doesn't want to be put in the midst of Old Navys, it wants to be next to a Prada and Louis Vuitton. So the mall has to try to coordinate among all of these brands, which may have different timetables for their own expansion plans. On top of that, these types of retailers like to be heavily involved in the overall design and look of their storefronts, Renslow said.

Deb Carlson, a director at Cushman Wakefield/NorthMarq and past president of the Minnesota Shopping Center Association, said luxury retailers tend to locate in upscale shopping districts rather than a place like the Mall of America.

"This is a little bit out of the box for them," she said. "They like more boutique-y space rather than being part of a big mall."

In addition to luxury retailers, the Mall of America is also focused on bringing in stores new to this market. Men's apparel, furniture, and beauty are other areas of focus of its leasing team as it looks to fill out the expansion.

Carlson added that it shouldn't be too much of a problem if it takes the mall up to a year to fill out the new addition with retailers.

"If it stayed empty a couple of years, then there would be a problem," she said.

The Mall of America continues to be a popular shopping venue, racking up more than $1 billion in sales and attracting more than 42 million visitors a year. "I don't think it's losing any of the appeal of a destination location," said Gina Dingman, president of NAI Everest, a commercial real estate brokerage.

If retailers don't get in the new addition by September to take advantage of the holiday season, many will likely avoid the slow winter months and wait to open in the second quarter of next year, she said.

For a recent example of how long it can take to cinch a deal, the Mall of America talked to Crayola for about two years before announcing the 60,000-square-foot Crayola Experience that will open on the third floor of the former Bloomingdale's space next summer.

While that attraction wasn't considered for the new addition, Victoria Lozano, Crayola's senior vice president of attractions and retail, said she was impressed by the fact that the mall's owners are still investing in the property to keep it distinctive.

"This is a really powerful location and destination no matter what," she said of the Mall of America. "But the fact that they are expanding, the fact that they are continuing to renovate the property is always a good sign."

Kavita Kumar • 612-673-4113