The Village at Meridian | Idaho Business Review

Old-school retail flourishes in Idaho

Visitors at the Village at Meridian, a large shopping development built in 2013 by California company CenterCal. Photo by Sharon Fisher.

This is the golden age for retail in Idaho, whether that’s a chain store or an independent, downtown or in a mall.

National and regional retailers continue to discover the Treasure Valley, local merchants are thriving, downtowns are being energized by new construction and new visitors, and Boise Town Square and The Village at Meridian are 95 percent occupied.

Upheaval is the norm in the retail world these days, with legacy retailers disappearing, department stores leaving vast vacancies in their wake, and national media reporting the pending death of malls.

But the retail world in Idaho is proving nimble in finding new uses for vacancies and coming up with new ways to build shopping centers. This is leading to a number of interesting twists in retail. Large shopping centers without anchor stores are finding new life as paintball businesses, trampoline parks, libraries and churches move in next door to shoe stores and bookstores.

The new-format Albertsons at Broadway and Beacon Street has an upstairs bar and other innovations unseen elsewhere in the huge grocery chain. The Broulim’s supermarket in Ammon has a Korean barbeque booth. Boise Towne Square staged a Cirque Italia in its parking lot in July. Boise Spectrum in spring added the region’s first food hall, a concept capturing the nation’s fancy in the past 10 to 15 years.

Some new shopping centers veer entirely away from strip centers and big boxes. Others are mixing office and residential with retail.

Food trucks are innovative retailers on two fronts. A bit over 10 years ago, they were seen mostly as taco trucks at construction sites. Over the decade, they have evolved into mainstream high-end dining options that are now universal around the country. In the meantime, many Boise food trucks now have storefronts.

“That’s a wonderful example of operators starting out small, getting the business going, to go into a brick and mortar scenario,” said Holly Chetwood, retail brokerage services at Thornton Oliver Keller in Boise.

“I think that’s the coolest thing downtown,” said Brianna Miller, also TOK retail brokerage services. “These are people who have a cult-like following.”

Idaho retail flourishes because it has a captive audience and fairly limited options, unlike bigger metros with multiple malls that predominantly serve just a section of their cities. Any of Idaho’s malls have customer bases stretching hundreds of miles into neighboring states.

The retail hubs of Boise, Twin Falls, Pocatello and Idaho Falls draw shoppers from as far off as La Grande, Oregon; Elko, Nevada; Jackson, Wyoming; and West Yellowstone, Montana. They also serve the booming Idaho population.

“We’re seeing traffic increasing steadily at the mall,” said Darren Howard, general manager at Boise Towne Square, which for the past two years has supplemented shopping with various events including choir concerts and car shows outside. “There’s a direct benefit to be part of the community, to have people come in and utilize the property. A very large percentage of people say, ‘I’m at the mall, might as well check it out.’”

Idaho falls in line with the Pacific, Southwest and Mountain regions as the top three U.S. regions for retail net operating income gains, according to Trepp, a New York City commercial real estate research and analytics firm.

For the last several years, pundits have closely watched online shopping to see if it would damage traditional brick-and-mortar stores. So far, the online threat is still a ways off. The U.S. Census Bureau reported first-quarter e-commerce sales at 9.3 percent, though that is more than double the 4.1 percent in 2010.

“It’s not a competition with online,” Miller said. “They blend their sales online with the store. It’s about West Elm. It’s just a showroom (in downtown Boise). You have to order online.”

“We do see people who have online businesses that want to be brick-and-mortar,” said Kelly Schnebly, retail brokerage services at Colliers International in Boise. “It’s the opposite of stores that supplement by online. The big thing in retail is how do you create an experience. It can’t be something you do online”

Creating an “experience” is the buzzword that rings loudest in retail circles now, a concept unheard of in the 1970s and 1980s when malls had no food courts and, often, not even public restrooms.

The Village at Meridian brought an upscale mix of retail and office space to the Treasure Valley in 2013 with the equivalent square footage of a 10-story-tower that offers offices on one or two levels above the stores.

“We don’t have the traditional department store anchors,” said Hugh Crawford, The Village’s general manager. “The retail stores (typically found) between the anchors are the attraction. The formula we follow is ‘entertainment is our anchor.’”

The Village has the outdoor fountain and also entertains with fine arts, RV shows, the movie theater, restaurants and yoga on the green. The Village will keep drifting away from old-school retail with plans to add a hotel and housing.

Modern town square

North Pointe combines retail and residential on State Street across from Walmart. Photo courtesy of Hawkins Companies.

Hawkins Companies, a Boise commercial developer in 23 states, pretty much abandoned 20^th century retail concepts at its North Pointe and Bridges at Lakemoor mixed-use developments in north Boise and Eagle. Its intention was to lure people “off the couch and away from Netflix,” in the words of Beau Manwaring, senior leasing manager at Hawkins.

North Pointe presents a modernized town square setting with a main entrance boulevard flanked by the first four retail buildings built around a town square intersection. The buildings are small, 5,000 to 7,400 square feet, with limited angled parking in front and more parking in the rear.

Black Bear Diner is in a fifth commercial building off to the side and four more North Pointe commercial buildings are planned. None of the retail buildings will be more than 7,460 square feet.

Hawkins partnered with Bach Homes of Draper, Utah, to pair the retail with 323 units in 27 one-, two-, three- and four-story structures called Kensington Apartments at North Pointe. Neither Hawkins nor Bach had ever done such a mixed-use development.

“We’ve been very picky on our (tenants),” said Shaun Greear, Hawkins’ leasing director. “We’d like to see more service-type uses (in the next two buildings to be built). We also want to provide services for people living there.”

North Pointe already has a chiropractor, nail salon and masseuse among the fast food and fast casual dining.

Nampa Gateway Center has about a dozen tenants filling about half the shopping center. Photo by Teya Vitu.

With all the new retail centers emerging, perhaps the ripest opportunity for retail innovation and experimentation is with the largely vacant Nampa Gateway Center. It could be seen as hailing from another era; 2007 is a very long time ago in the retail world.

Nampa Gateway wins for location. Right on the freeway, the year-old Saint Alphonsus Medical Center Nampa I-84/Garrity is across the street, WinCo is at the edge of the center, the 256-unit Station Apartments at Gateway is neighboring to the south, and Meridian and Nampa have become the state’s second and third biggest cities.

Yet Nampa Gateway never recovered from opening a few months after the Treasure Valley Marketplace, which snagged all the ripe fruit from the retail tree. Nampa Gateway’s developers, DDR Corp. of Beechwoood, Ohio, held on to the property until finally selling it in November to RCG Ventures of Atlanta, Georgia.

“It’s going to take someone with the right vision,” said Chetwood, suggesting a redesign to the center’s layout, possibly multifamily housing in a portion of the center.

Retail loves Twin Falls

Olive Garden is under construction at the Magic Valley Mall in Twin Falls. Photo by Laura Clements

Retail is hitting all pistons in Twin Falls, a newly anointed metropolitan statistical area after reaching 100,000 residents in Jerome and Twin Falls counties.

The Magic Valley Mall took a punch in the gut when Macy’s and Sears announced store closures, but before Macy’s even shut down in March, Hobby Lobby announced it would fill Macy’s anchor space.

“The thing that surprised me was the speed that Macy’s filled up with Hobby Lobby,” said Dan Wilhelm, retail brokerage services for Thornton Oliver Keller in Twin Falls. “That shows the strength of the market. The interest is so strong, particularly at the canyon. There’s a lot of interest by Walmart at Blue Lakes and Washington.”

Department store closures didn’t discourage the mall’s Magic Valley Cinema from expanding from 13 to 20 screens, converting to luxury recliner seating and adding a large-format screen.

Suburban retail has been the no-brainer in U.S. retail for the past 40-plus years. Suburban retail just caught fire in Twin Falls in the past few years, and downtown retail has been red hot barely since last Christmas.

“I was just in Twin Falls. What they are doing downtown is really neat. It’s moving back to local retailers,” Schnebly at Colliers said.

Local retail instantly responded to the $20 million downtown redevelopment blitz that the city has undertaken over the past few years. The city entirely rebuilt Main Street and its sidewalks, conjured a sleek new city hall out of a half-century-old furniture store structure, and gave downtown Twin Falls its first gathering place for hundreds with the July opening of the Downtown Commons plaza.

“What’s really exciting is what’s going on downtown,” Wilhelm said. “City Hall really spurred downtown. There is a lot of boutique retail. The young crowd is finding a foothold in downtown and helping it explode. Twin Falls can draw young people now.”

Retail development heads east

Farther east, Idaho’s most expansive development is just getting started with the Northgate Development, a public-private collaboration among Utah developer Buck Swaney, the cities of Pocatello and Chubbuck, Bannock County and the Idaho Transportation Department.

A new freeway overpass set to open in October 2019, partly funded by Swaney’s group, will serve Northgate and give freeway access to northeast Chubbuck and the newest section of Pocatello.

Road work, curbs, gutters and the utilities for the first 100 acres were set for completion by the end of September, but ultimately Northgate is master-planned as a 4,500-acre community with as many as 10,000 homes.

Construction of the first 54 homes by Portneuf Development in a gated development was expected to start in September with the first 16,000-square-foot retail/office building possibly starting in November, said Don Zebe, a Colliers International commercial broker based in Pocatello and leasing agent for Northgate.

“We definitely will have commercial buildings going up in 2019,” Zebe said.

Swaney told the Idaho Business Review earlier in 2018 that he envisions the first 300 acres including a 60-acre lifestyle center/outdoor mall with potential office and retail; 65 acres for a tech/office park; a 20-acre medical campus, where Portneuf Health Trust plans to build a surgery center; and 150 acres of other mixed use, including single-family homes, condos and apartments.

“It’s going to bring opportunities to our community that we have never seen here,” Chubbuck Mayor Kevin England told the IBR in February. ”It will create jobs that will keep our children here.”

Blaze Pizza and Costa Vida will fill the newest building at Sandcreek Commons in Ammon. Photo by Teya Vitu.

Farther east, the second and third largest shopping centers for eastern Idaho are in early and later phases of construction in a region already stocked with abundant retail, said Brent Wilson, commercial real estate broker in Thornton Oliver Keller’s Idaho Falls office.

Wilson looks at Sandcreek Commons, which since 2015 has brought Ammon a Broulim’s supermarket, Hobby Lobby, Cabela’s, Broulim’s and other retailers to Sunnyside Road and 25^th Street.

“Adding 300,000 square feet in a market our size is very ambitious,” Wilson said. “The project is doing very well.”

Also on Sunnyside Road but at Interstate 15, local developer Matt Morgan started construction on a 100-room Holiday Inn hotel to launch his 44-acre Jackson Hole Junction mixed-use development. Morgan expects a second hotel and 18 retail structures with only three larger than 20,000 square feet and the bulk smaller than 10,000 square feet.

Meanwhile, Wilson in August represented the sale of two former Kmart properties in Idaho Falls and Ammon to U-Haul, the moving and storage company.

“Taking 200,000 square feet off the (retail) market is very significant,” Wilson said. “Otherwise, mid-box and big-box will have to race to the bottom.”

Northern Idaho has had less robust retail development since WinCo opened in Coeur d’Alene in November 2013.

“We haven’t had much in the way of new retail in a while, probably in the last five years,” said Chris Schreiber, associate broker at Spokane-based Kiemle Hagood’s Coeur d’Alene office. “We are waiting to see what will happen with the old Kmart (which closed in October 2017). We heard rumor of Hobby Lobby. It looks like it will be retail. The nice thing is it’s an existing building. It has a great location. My guess is it will be broken into at least two pieces.”

Retail was not the answer for the former Sports Authority at Coeur d’Alene’s Silver Lake Mall, where Philippines-based SPi CSM opened a call center in November.

Regional markets

Treasure Valley: 750,000 residents

Magic Valley: 220,000 residents

Eastern Idaho: 255,000 residents

Retail lease rates

Downtown Boise: $20/SF

Meridian: $17.50/SF

West: $14.50/SF

Caldwell Blvd: $15/SF

Older strip centers: $10 to $15

New construction: $30

North Pointe: $25 to $30 per square foot

Idaho Falls – Grand Teton Mall area: mid-$20s

Idaho Falls – elsewhere: $10 to $12

Retail Projects of Note

Village at Meridian – 220,000 square foot expansion and remodel/expansion of movie theater

North Pointe – nine retail buildings, 323 residential units

Lakemoor – seven retail buildings, two office buildings and an 11-screen cinema

Costco Meridian – 165,000-square-foot store planned for Chinden Boulevard and Ten Mile Road

Albertsons Main Street – under construction at Fairview and Eagle in Meridian, same concept as new Albertsons on Broadway in Boise

Magic Valley Mall – movie theater expansion and renovation, Hobby Lobby filling Macy’s space

Twin Falls downtown – numerous local retailers opened this year

Northgate Pocatello – first 100 acres of mixed-use development starting on a potential 4,500-acre project

Sandcreek Commons Ammon – 12 retail structures have been built at eastern Idaho’s second largest shopping center

Jackson Hole Junction Idaho Falls – construction just started on a 100-room hotel at what will become eastern Idaho’s third largest shopping center

Senior living planned for The Village at Meridian

Cadence at The Village will have 116 apartments for residents 55 and older behind the Boise Co-op in Meridian. Photo courtesy of Brighton Corp.

The Brighton Corp. plans to add its first residential element to The Village at Meridian with a 166-unit active adult living complex behind the Boise Co-op.

The five-story structure will target residents aged 55 or older, said David Turnbull, Brighton’s CEO.

Brighton is the firm that built the square-mile Paramount subdivision in Meridian. The Village at Meridian apartments are the next phase of Brighton’s Cadence brand for “active adult living” residents. Its first 208-home development, Cadence at Paramount, is under construction at Meridian Road and Chinden Boulevard.

The Village at Meridian only came on Brighton’s radar about 10 months before it bought the 2.5-acre lot behind the Boise Co-op in January from CenterCal Properties, which owns The Village at Meridian.

Construction is expected to start in October, with completion targeted for summer 2020, Turnbull said.

Shoppers at CenterCal’s Village at Meridian development, located 5 miles west of downtown Boise. Photo by Sharon Fisher.

The Cadence at The Village gives The Village something it’s been missing since opening in October 2013: people living there.

“Adding this new residential community to The Village has always been part of our master plan, fulfilling the ‘live, work, play” concept,’” said Hugh Crawford, general manager at The Village at Meridian. ”With this active lifestyle demographic living within The Village just steps away from our retail stores and restaurants, everyone will benefit and enjoy what this new community brings.”

The apartment will have 108 one-bedroom units and 58 two-bedroom units.

CenterCal officials have acknowledged the housing market was still slumping when The Village was built. Turnbull, himself a homebuilder, acknowledged the retail cluster around Fairview and Eagle wasn’t prime for residential until now.

“It just takes a little while to establish the area and move to (residential),” Turnbull said. “(CenterCal) really stepped up and created an environment. You can walk to The Co-op, The Village, theater and shopping.”

Meridian’s largest park, Julius M. Kleiner Memorial Park, is also next door.

Tuttle and Associates of Salt Lake City is the architect. A general contractor has not been selected.

Village at Meridian expects 2019 start for large expansion

Visitors at the Village at Meridian. The shopping center’s developer, CenterCal Properties, plans to start its expansion there in the second or third quarter of 2019. Photo by Sharon Fisher.

A 225,000-square-foot expansion at The Village at Meridian is in the planning and design stages with a potential construction start in the second or third quarter 2019, General Manager Hugh Crawford said.

The expansion was first announced in May 2016, but did not move forward until recently.

The expansion will involve office and retail, possibly a hotel, and “most likely a residential component,” Crawford said.

“I don’t know the final mix,” he said. “We’re talking with a hotel developer.”

The expansion will extend The Village west to Eagle Road and develop five vacant pads there and elsewhere along the perimeter of The Village.

The Village at Meridian opened in October 2013 and has 771,548 total square feet with 562,019 square feet of retail and 152,064 square feet of office.

The Village is owned by CenterCal Properties of El Segundo, California.

Village Cinema 15 plans to go luxe with renovation and expansion

All the seats at Village Cinema 15 at the Village at Meridian will be replaced with leather electric reclines. Photo courtesy of Village at Meridian.

Village Cinema 15 at the Village at Meridian will replace all its seats over the next six or seven months.

All the new seats will be full leather electric recliners, which will reduce the seating in each theater by about half. The large 300-seat auditorium will have about 180 seats, said James Howard, director of project development at Cinema West, the Petaluma, California, owner and operator of Village Cinema 15 and Magic Valley Cinemas 13 in Twin Falls.

“There won’t be any (ticket price) increases,” Howard said. “We have learned at our other theaters, even though we’re cutting the number of seats in half, business has increased 20 to 40 percent (in tickets sold).”

Cinema West has renovated in similar fashion 12 of its 16 theaters in California and Idaho over the past three years, with renovations and expansion currently underway in Twin Falls.

Cinema West intends to build a second theater complex with six or seven screens elsewhere at The Village. This will follow the company’s LUXE format that is now in place in Folsom and Concord, both in California.

“You will walk into the lobby and think you’re at a fancy hotel,” Howard said. “There will be no concession stand. You will have the ultimate date night for adults.”

Food will be ordered from and served at the theater seats.

The estimated $6 million to $7 million LUXE construction is expected to start in early 2019. No architect or general contractor has been selected, Howard said.

Cinema West awaits final city approvals for the $2 million to $3 million renovation of the existing Village Cinema 15 with hopes to start work in mid-June. The Henry Architects of Seattle is the architect and Cinema West is doing the renovation itself.

“At any given time, two auditoriums will be down,” he said.

Cinema West will double the number of auditoriums with Dolby Atmos sound from two to the four largest auditoriums. The new Luxe Reel Theatre in Caldwell, operated by a different company, will also have Dolby Atmos in its largest auditorium when it opens later in June.

“This is the most submersive all surround sound (including speakers in the ceiling),” Howard said.

The Cinema West expansion will come in conjunction with the expansion of The Village at Meridian. CenterCal Properties, the El Segundo, California-based owners of The Village, in February 2016 announced a 225,000-square-foot expansion onto two parcels just off Eagle Road.

CenterCal has been silent about the proposed expansion since then.

In the news release regarding Village Cinema 15, CentreCal indicated renderings and detailed plans for The Village expansion will be released in coming months.

The Village General Manager Hugh Crawford was not available for immediate comment.

Multi-state retailers are taking an earlier look at Boise

A clerk talks to a customer outside the Lolli and Pops candy store in Town Square Mall May 18. Photo by Patrick Sweeney

Lolli and Pops and other emerging multi-state retailers have found a sweet deal in Boise.

The San Francisco-based candy and chocolate purveyor is an early player in a new dynamic in retail expansion: Opening a store in the Treasure Valley early in their history, and, in some cases, coming to Boise before Portland or Seattle.

Until the past year or two, national retailers routinely did not find Idaho until they had stores operating in 40 states, sometimes even 47 or 48 states. Idaho was the 46^th state for Panera Bread. Boise waited more than 20 years for Trader Joe’s once the southern California grocer decided to expand out of state.

“We’ve been west, east, north, even south, and finally we are ‘in’ the Rocky Mountains as we open stores in both Idaho and Colorado,” Trader Joe’s notes on its website timeline.

Chick-fil-A was founded in 1967 in Georgia but didn’t find Boise until November 2010, nor Washington until 2015 and Oregon until 2016, employing the same rationale: “The Pacific Northwest is about as far from Atlanta as it gets. That’s the only reason.”

Idaho was the 48th state to get an ABC Supply Co. store, the nation’s largest wholesale distributor of roofing supplies. CVS Pharmacy is in 49 states and only arrived in Idaho in 2016.

On the other hand, Lolli and Pops, established in 2012, opened its 27^th store at Boise Towne Square in July 2016. Idaho was the company’s 12^th state. Less than a year later, the company now has 38 stores in 17 states.

“We wouldn’t have done it first but it was a natural extension to do infill in the Boise market,” said David Friedman, vice president of real estate and store development at Lolli and Pops. “We are doing really well in Seattle, Portland and Denver. Where can we duplicate that effort? The psychography of Boise is similar, the lifestyle that is there.”

Several other newer, multi-state retailers have expanded to the Treasure Valley in their early years.

“Boise is just on everybody’s radar,” said Holly Chetwood, retail brokerage specialist at Thornton Oliver Keller, a Boise commercial real estate firm. “It’s on the national radar and the retailer radar. We started to see that a couple years ago.”

The 2008-09 recession and its recovery was a curious dividing line for Boise. Several factors favorably came into play in the early 2010s that all added up to the Treasure Valley becoming a retail darling.

Population growth, cheap and available commercial real estate, the Village at Meridian, magazine accolades, and low wages suddenly became a magnet, especially for the new generation of entrepreneurs founding their multi-state retail companies in the new millennium.

Meridian has landed on national “fastest-growing city” lists for years, capped off with the 2013 opening of The Village at Meridian, a lifestyle shopping center.

“When (Metropolitan Statistical Areas) hit the 600,000 population mark, they start to get on tenant’s radar screens for expansion,” said LeAnn Hume, senior retail and investment specialist director at Cushman & Wakefield Pacific’s Boise commercial real estate office. “With the success of The Village attracting big name tenants, it becomes appealing to other retailers who may have previously seen Idaho as ‘too small’.”

Boise MSA crossed 600,000 in 2009, right at the depths of the economic turmoil. Even before then, Boise was positioned to join Seattle, Portland, Denver and Salt Lake City as an equal player for retail expansion – even with a far smaller population.

Boise is nearly the smallest population center with a Lolli and Pops store other than Springfield, Mo., but sales volumes in Boise match those of larger Lolli and Pops cities.

“It’s a smaller market, lower volume,” Friedman said. “Considering it’s doing average volume in a smaller market, we’re very happy. We projected it to do lower and we’re doing better.”

The Village at Meridian put the Treasure Valley on the retail map

Population growth, media accolades and The Village at Meridian all played a role in multi-state retailers taking a closer look at Boise. Photo by Teya Vitu.

The 1 million-square-foot Village at Meridian changed the retail landscape in the Treasure Valley when it opened in 2013.

The Village not only enchanted shoppers, diners, moviegoers and people strolling around the fountain, but the retail/office complex at Idaho’s busiest intersection also caught the attention of the retail world.

“The Village was very important in putting Boise on the map,” said Holly Chetwood, retail brokerage specialist at Thornton Oliver Keller, a Boise commercial real estate firm. “One thing we have seen as a result is the arterials that feed into The Village have improved. Fairview was dead before. Now you’re seeing revitalization with CarMax.”

The Village is a top performing store for a number of tenants, said Ramona Merrill, the intermountain vice president of marketing for El Segundo, Calif.,- based CenterCal properties, which developed, owns and operates The Village at Meridian.

“When they see a developer investing $300 million, that gets people’s attention,” Merrill said.

Elsewhere, shopping centers and malls are closing in droves.

“They are calling it a retail ice age,” Merrill said. “So many are closing. That makes them sit up and take notice (of The Village’s success). They took a risk in coming to a market our size.”

Back when The Village was built, that section of Meridian was still corn fields. Across Eagle Road, fields remain. Even with 30 years of booming population growth, the Boise metro is only the 81st largest metropolitan statistical area, according to the U.S. Census Bureau.

“Successful developers are putting more interest into things that are counterintuitive,” Merrill said.

The Village and the suburbs also benefit on the retail front as retailers scoping out the Treasure Valley often can’t get downtown Boise to pencil out.

“Initially, everybody wants a downtown flagship but we have a hard time fulfilling parking requirements,” Chetwood said. “Now the flagship goes to Meridian and Eagle and downtown is secondary.”

Lolli and Pops, the San Francisco candy and chocolate shop, looked at both The Village and Boise Towne Square before committing to the latter – because the Village already had a niche candy store, said David Friedman, vice president of real estate and store development at Lolli and Pops.

“You have a couple really good venues to shop that do well in sales per square foot: Boise Towne Square and The Village at Meridian,” Friedman said. “They are really good places for companies to expand. It’s a good market for retail. It’s not over-retailed.”

Garden City-based Gyro Shack, founded in Boise in 2009, is expanding in reverse, after opening its out-of-state franchise in May in Everett, Wash. Gyro Shack is among the many newer multi-state eateries expanding to other states.

“In the last two-three years there was a ramp up in franchising, start-up retail and innovative business,” Gyro Shack CEO Doug Miller said.

Population, inexpensive real estate, and available labor have made Boise a national retail draw

Inexpensive real estate and labor have put the Treasure Valley in the retail spotlight in the last few years.

“The reason you see so many restaurants is because of our wages,” said Jeffrey Hall, principal at Northwest Commercial Advisors in Meridian. “They make way more money here than in Seattle and Portland. Restaurants have thin margins. Here they can actually make money. They just want to be here. Our tip wages is very low, $3.35 (per hour).”

The federal minimum wage for employees who get tips is $2.13 per hour. Utah and Wyoming both follow the $2.13 minimum, but Washington requires tipped workers to be paid $11 per hour, Oregon $9.75, Nevada $8.25 and Montana $8.15, according to the U.S. Department of Labor.

Las Vegas-based Capriotti’s Sandwich Shop is scouting the Boise region to place a restaurant, likely before Oregon or Washington.

“Both are very expensive and pretty tight (with available real estate),” said David Bloom, Capriotti’s Sandwich Shop chief development officer. “Boise has really good sites. You can find them and they are available.”

Garden City-based The Gyro Shack is expanding into Oregon and Washington – but avoiding Seattle and Portland for now.

“It’s the real estate, frankly,” Gyro Shack CEO Doug Miller said. “When you look at real estate in Seattle and Boise, there’s a big difference. “

Aubrielle Holly, market research coordinator at Colliers International in Boise, analyzed commercial real estate rates in Boise, Portland and Seattle. She determined downtown Boise retail lease rates run about $18.76 per square foot.

“Seattle is running in the $25-$35 range, with a few rates in the downtown as high as $40,” Holly said. “Portland looks to be in the $20-$30 range.”

Boise has hit a retail market sweet spot.

“We reached the population threshold but we’re not at the high cost of entry of other metros,” said Seth Brink, vice president of operations at The Gyro Shack.

Though based in Meridian, Hall represents national retail tenants across the western states.

“The cost of other states is pushing retail out,” Hall said. “A Subway taking up 1,700 square feet pays $40,000 for a year in Boise. I’m negotiating a lease for the same space in L.A. County for $150,000.

“Newer multi-state companies are unable to get opportunities in other states,” Hall continued. “They can’t find space. I can take those retailers and bring them to Boise, find them a home and find them a lease that is reasonable. In those markets, it’s very difficult to find space and a fair price point.”

Hall has seen the shift at the International Council of Shopping Center’s RECon Global Retail Real Estate Convention in Las Vegas, the world’s largest retail real estate convention.

“There is always a map for these retailers,” Hall said. “Before, we used to see the East Coast, California, South, Arizona, Texas. But we are starting to see them push into the Northwest. A lot of that has to do with the connecting of the dots. Companies like Panera can make the move here because they have the distribution to connect the dots through Salt Lake City and Portland. Boise is much more accessible now.”

Multi-state retailer that gave Boise an early look

Just a few years ago, Idaho was the the 40th-odd state to get national retailers. That has changed in the last few years. Newer multi-state retailers commit to the Treasure Valley early on and sometimes even before opening in Oregon and Washington.

Other multi-state chains that expanded to Idaho early include:

Habit Burger (in 10 states now)

Native Grill & Wings (seven states)

Tropical Smoothie (nothing in Oregon, only three in Washington)

Eureka! (21 restaurants in five states)

Westside Pizza (29 pizzerias in three states – and moved the corporate office from Washington to Boise)

Zoup! which was in 17 states when it committed to Idaho

Black Bear Diner expanded to Idaho as one of eight states,

Tru by Hilton is building a hotel in Meridian just one year after the brand was announced

Alfa Romeo opened a car dealership in Boise before Portland.

Urban Outfitters leaving BoDo for the Village at Meridian

After 10 years at BoDo in downtown Boise, Urban Outfitters is moving to The Village at Meridian. Photo by Teya Vitu.

Long-time tenant Urban Outfitters will leave downtown Boise’s BoDo commercial district to relocate at The Village at Meridian.

The Village announced that Urban Outfitters will open in a 10,000-square-foot space in front of Z Gallerie in August.

Urban Outfitters has been a BoDo tenant since 2007. The Philadelphia-based retailer’s lease on 10,141 square feet ended at the end of last year and the store is now operating on a six-month extension, said Kelly Schnebly, property manager at Colliers International, which manages BoDo.

Urban Outfitters did not respond to calls from the Idaho Business Review.

Other recent BoDo departures include the Snake River Winery tasting room in March, and the Boise State University store, which is moving soon to the Clearwater Building. Jos. A. Bank, an original BoDo tenant from late 2005, closed a year ago.

Urban Outfitters is the second national retailer along with Anthropologie in recent years to move from downtown Boise to the Village at Meridian.

Gordmans will liquidate all its stores

Omaha, Neb.-based Gordmans Stores Inc. announced March 11 it will liquidate all its stores through Chapter 11 U.S. Bankruptcy Code provisions.

Gordmans has three stores in Idaho, all in the Treasure Valley.

Gordmans had a brief life in Idaho. The first store opened in the Treasure Valley Marketplace in Nampa in March 2012 and the second store followed at The Village at Meridian in July 2012. Both centers are owned by CenterCal Properties.

The third local Gordmans followed in March 2014, filling a vacant Kmart site in the Southshore Center at Parkcenter Boulevard and Apple Street in Boise. All three stores have about 51,000 square feet.

Gordmans has entered into an agreement with Tiger Capital Group LLC and Great American Group LLS to undertake the liquidation sale of all Gordmans inventory and assets at the retail stores and distribution centers

No store closure dates have been announced.

“Until further notice, all Gordmans stores are operating as usual without interruption,” Gordmans President and CEO Andy Hall said in a statement. “The management team and all of our associates remain committed to continuing to provide great merchandise and service to our guests during this process.”

Gordmans currently operates 106 stores in 22 states.

Northbound Eagle Road will be widened to The Village at Meridian

The Idaho Transportation Department started construction Aug. 23 on a third northbound lane for Eagle Road from Franklin Road to Fairview Avenue, the department reported.

The work will extend the three-lane northbound stretch already in place from Interstate 84 to just before Franklin, where the outer lane becomes a dedicated right-turn lane.

Eagle Road will remain open at all times with lane restrictions during the overnight road work from 10 p.m. to 5 a.m. Construction is expected to be completed by the end of the year, ITD spokeswoman Jennifer Gonzalez said.

The project will also add right-turn lanes on northbound Eagle at Franklin Road, Pine Avenue, Fairview Avenue, Lanark Drive and Presidential Drive. The project is funded by The Village at Meridian, she said.

Idaho Materials & Construction is the contractor for the project. Construction updates can be obtained by texting EAGLEROAD to 22828 or calling 334-8938.

The Village at Meridian will expand by 225,000 square feet

The Village at Meridian will expand into the lots between Eagle Road and the existing center. Photo by Teya Vitu.

The Village at Meridian will add 225,000 square feet of retail and office space, plus a second gathering spot similar to The Village’s Fountain Square.

CenterCal Chief Executive Fred Bruning announced the expansion May 10 at an open house for commercial real estate brokers.

El Segundo,Calif.-based CenterCal, which opened The Village in October 2013, has had two parcels earmarked for expansion since building The Village, and utility lines are already in place, Bruning said.

Bruning expects to add 125,000 square feet of retail and 100,000 square feet of office with construction starting either this fall or in spring 2017 and an opening anticipated for summer 2018.

Bruning is especially exciting about the second gathering spot, which will be smaller than Fountain Square but will include entertainment features such as holographic images, mist curtains, coordinated landscape and wall lighting, and music elements.

“Instead of a fountain that is a show, the whole park is a show,” Bruning said. “The next phase will take The Village to the next level. I hope it will complete it and provide an upgraded sense of place.”

The estimated $100 million expansion would bring The Village to 1.3 million leasable square feet for commercial and office, building on its status as the second largest of CenterCal’s 12 shopping centers in California, Utah, Oregon, Washington and Idaho. The Village now has 1.042 million square feet, including 562,012 square feet of retail and 152,064 square feet of office with Boise Co-Op, Marshalls and Gordmans. Bruning said he has letters of intent from about a dozen tenants covering about 60 percent of the expansion space, but he added there’s no guarantee all will sign contracts.

He also wants to add a residential element to The Village. He’s planning a 400-unit apartment complex on Village property facing Kleiner Memorial Park.

“The housing market was still in the tank when we built The Village,” he said. He does not have a timeline in place for the apartments other than “as soon as we get unbusy enough.”

Los Angeles-based CenterCal has a sharp focus on Idaho

CenterCal is developing other shopping centers in Park City and Riverton, Utah; Kirkland, Wash., and Redondo Beach, Calif. And Bruning is in talks with a few tenants for other Treasure Valley sites he does not have lined up yet.

At times, Bruning employs his own words to describe his properties, such as “park” for Fountain Square and “retail technology” for the village concept. He shies away from the term “lifestyle center,” preferring “gathering place.

“It’s experiential retail, that’s what it is,” he said.

Idaho has been on Bruning’s radar for decades, first as the territory real estate director west of the Rockies for Sears and then as vice president of development for the John Price Development Company of Salt Lake City in the early phases of developing Boise Towne Square.

He recalls people saying “nobody’s going to drive that far west” in the 1980s and a similar refrain was still in play 20 years later with The Village.

Fred Bruning in conversation with The Village at Meridian's Sarah Franks at an open house for brokers where he announced The Village's expansion. Photo by Teya Vitu. — Fred Bruning in conversation with The Village at Meridian’s Sarah Franks at an open house for brokers where he announced The Village’s expansion. Photo by Teya Vitu.

He bought the year-old Treasure Valley Marketplace in 2007, and the following year bought the acreage at Eagle and Fairview that would become The Village. The Great Recession delayed development for four years. But the population kept growing.

“Much of that growth is quite affluent growth,” Bruning noted. “The last thing the area wanted was more strip malls. If we do something different, focus on restaurants and entertainment, people come back to our project four, five, six times a week.”

The Village followed concepts at Station Park in Utah

CenterCal creates three types of shopping centers: traditional “market and drug store” centers, usually older acquisitions; big box stores facing a parking lot; and the village environment revolving around placemaking.

Placemaking is in vogue now, Bruning said, and CenterCal’s Station Park in Farmington, Utah, and The Village at Meridian have become the company’s two largest properties.

The Village was built in tandem, about 18 months behind, with Station Park, which has a similar geographic dynamic as being a small Salt Lake City suburb a touch out of the way.

Station Park has 1.2 million square feet. An expansion there is taking it to 1.8 million square feet, with a new 125-room Hyatt Place and University of Utah medical campus. Many Station Park elements are in evidence at The Village.

Business partners Bruning and Jean Paul Wardy first teamed up as CenterOak Properties in 1998 in the Los Angeles suburb of Torrance, but moved their base near Portland at their Bridgeport Village in Tigard, Ore., from 2001 to 2011. The company name changed to CenterCal as they changed financial partners from Oaktree Financial Management to the California State Teachers Retirement System.

During this Portland period, they built their heavy Pacific Northwest and Utah portfolio in Portland, Tigard and Tualatin, Ore.; Silverdale and Union Gap, Wash.; Nampa and Meridian. The company returned to metro Los Angeles in 2011 to be close to Wardy’s wife’s family in LA, Bruning said.

In Los Angeles, they have centers in Cerritos and Oxnard plus one near San Francisco in Danville.

MarkMonitor will be biggest office tenant at The Village at Meridian

MarkMonitor is moving its office into 41,000 square feet on the third floor of this building at The Village at Meridian. Photo courtesy of The Village at Meridian.

International online brand protection firm MarkMonitor will become the largest office tenant at The Village at Meridian on May 23 after operating for 10 years two miles to the east in an industrial area near Emerald and Five Mile Road.

MarkMonitor has a five- to seven-year lease on 41,000 of The Village’s 137,561 square feet of office space above the retail space in three buildings. It was the fifth-largest office deal in the Treasure Valley in 2015, said Angie Emmons, market research analyst at Thornton Oliver Keller Commercial Real Estate.

MarkMonitor is leaving a 25,000-square-foot structure where the company has grown to more than 200 employees with two building expansions. Serlin expects MarkMonitor’s Boise presence to grow to more than 300 at The Village in the next five years.

“It could not be more different than where we have been,” said Matt Serlin, vice president of global client services for MarkMonitor. “This is the ability for people to work in an environment where they can go to the gym, meet with family, go to the park and have all of the lunch options.”

MarkMonitor was founded in 1999 in Boise, near Hewlett-Packard, and Boise remains its largest operation with the company headquarters now in San Francisco and other offices in London, Lithuania, Japan, China, Denmark, Burbank, Calif., and Maryland. MarkMonitor has more than 500 employees around the world, Serlin said.

The Boise office does client services for U.S. customers, which include more than 50 of the Fortune 100 companies that enlist MarkMonitor to provide online brand protection, domain name management, anti-counterfeiting for electronic, pharmaceutical and clothing companies, anti-piracy and anti-fraud services, Serlin said.

MarkMonitor in 2003 acquired Alldomains.com, located near San Francisco. Along with its headquarters, sales, marketing and engineering are in San Francisco.

Landing MarkMonitor takes the Village at Meridian to 84 percent office occupancy on the second and third floors of three buildings with 74,468 square feet, 10,793 square feet and 52,300 square feet. MarkMonitor will be located on the third floor above the Anthropologie and Sur La Table stores.

The offices on the second and third floors above the retail stores did not fill at the same rate as the shops, which first opened in October 2013.

“The momentum kicked in after one and a half years,” said Hugh Crawford, general manager at The Village. ”We understood that the office component would follow the retail. Office deals take a long time. We’re pretty pleased to be at 84 percent (occupancy) with office.”

Idaho Timber, First American Title, and MassMutual are among the dozen office tenants at The Village.

Crawford has a two-story retail space that could become a second story office. The Village has no two-story retail stores.

The Habit Burger Grill migrates from Utah to The Village at Meridian

The Habit Burger Grill offers fast food in a fast casual setting. Photo by Teya Vitu.

The Habit Burger Grill found its way quickly to the Village at Meridian once the burger chain, founded along the beach, decided to venture beyond California.

The Habit, established in 1969 in Santa Barbara, now has 109 burger-seafood fast-casual eateries in California but only opened its first out-of-state store in 2010 in Arizona.

The Habit at The Village will be the chain’s 22nd non-California store when it opens Nov. 4. Idaho will be just the seventh state for The Habit, which just opened its first Las Vegas store in August and Florida stores in June. New Jersey got two Habits in 2014.

The same man who brought The Habit Burger Grill to Utah in January 2013 is looking north to Idaho. Tom Hartman, a market partner at The Habit, has since opened nine Habits in Utah, including one at the Station Park lifestyle shopping center in Farmington.

“Station Park is my best performing Utah store, substantially better than No. 2,” Hartman said.

Station Park and The Village at Meridian are both owned by CenterCal Properties, an El Segundo, Calif., retail development company that has properties in California, Idaho, Utah, Nevada, Oregon and Washington.

“CenterCal had approached us to look at the Meridian site a couple years back and I went out to check on the site and market and we decided, at the time, we weren’t ready to enter the Boise (metro),” said Russell Friend, The Habit’s chief development officer. “We revisited the site about eight months back and CenterCal was delighted to find out we were ready to enter the market and told us that they had this space available.”

In the meantime, The Village, which opened in October 2013, developed some street cred with national retailers, said Ramona Merrill, regional marketing director at The Village.

“That’s a phenomenon happening with Meridian with sales of some stores putting Idaho on the map,” Merrill said. “We’re getting calls from retailers and restaurants that we weren’t on the map for.”

CenterCal and The Habit are in talks in Oregon and Washington, too.

“We’re working with them in other states in the Northwest,” said Merrill. “They are very popular in Utah. Habit Burger is going to be great addition to The Village.”

Idaho is familiar territory for Hartman, who was previously the area supervisor for Marie Callender’s Restaurant & Bakery stores in Idaho, Washington, Colorado and Utah from 1997-2002. If the Meridian Habit Burger performs well, Hartman may open a second Habit Burger in Treasure Valley within a year and possibly live here.

Hartman is especially drawn to the “family atmosphere” at both Station Park and The Village at Meridian.

“I like how they maintain their property,” Hartman said about The Village. “They are very retail-oriented in how they run the center. It’s sharp.”

The Habit Burger Grill started life in Santa Barbara, Calif., and opens Nov. 4 at The Village at Meridian. Photo by Teya Vitu.

Hartman describes The Habit setting as upscale fast-casual in a fast-food environment, where, Hartman said, the target ticket time is a maximum seven minutes. Surfer prints dot the walls and higher quality furnishings fill the room.

The Habit starts with fresh beef that has not been frozen and sushi-grade albacore tuna sliced from a loin, he said.

“It’s a literal tuna sandwich,” he said. “There’s no substitute for quality. The original founders were absolute fanatics about the quality of the food.”

Treasure Valley retail is booming from end to end

A shopper at the Village at Meridian. Photo by Pete Grady.

Retail is on the ascendancy in the Treasure Valley, much of it in Meridian. Many retailers who are new to Idaho have planted their flags in the past year, and the Village at Meridian completed its first year with a flourish.

Continuing population growth – The Treasure Valley counts more than 600,000 now – coupled with economic recovery, declining unemployment, job growth and lower fuel prices have drawn new retailers to the greater Boise region, and have helped those already in place to grow.

The retail vacancy rate is in the 5 to 8 percent range, depending on which local commercial real estate brokerage one consults. Vacancies dropped 1 to 2 percentage points in 2014.

“There’s not a lot of quality space in the market for expanding retailers,” said Mike Christensen, part of the retail services group at Colliers International. “I think you will see more developments come on line.”

Meridian, anchored by the new Village at Meridian shopping development, has surpassed the West Bench — home to the Boise Towne Square Mall and the Milwaukee Street retail cluster — as the submarket with the largest share of the Treasure Valley’s retail sector. Colliers calculated Meridian’s 3.5 million square feet accounts for 23.2 percent of the region’s retail. This has surpassed the West Bench’s 2.99 million square feet or 18.9 percent.

“That’s the center of the valley,” said Christensen. “That’s where the majority of rooftops are and the retailers want to be close to the rooftops.”

Expect new retail development to reflect the way the Village at Meridian redefined a shopping center into a lifestyle center. The Village offers stores, restaurants, a movie theater, office space, and a public gathering area with a fountain and other amenities. Its success reflects the fact that some shopping areas have become entertainment destinations.

The Village at Meridian includes a large public gathering spot with a lighted fountain. Photo by Pete Grady.

“Landlords need to create a sense of place,” said LeAnn Hume, senior director and retail specialist at commercial real estate firm Cushman & Wakefield|Commerce. “It’s no longer, ‘Put up brick and mortar and expect someone to move in.’ The millennials have been a huge influence on fast casual and fast food.”

Sara Shropshire, a Cushman retail associate, said the retailers that haven’t modernized are seeing higher vacancy.

“You have to look at what you’re trying to create with a strip center that provides more than a giant parking lot,” Shropshire said. “You see vacant space that exists here are in centers that haven’t been updated.”

Commercial real estate broker Thornton Oliver Keller reported in its 2014 Year-End Market Watch that the Village, which opened in October 2013, leased nearly 110,000 square feet of retail space. The Caldwell Boulevard submarket in Nampa saw 119,000 square feet of new construction with Freddy’s Frozen Custard, Popeyes Louisiana Kitchen and others.

“Today’s shoppers are looking for a complete experience, with amenities that include shopping, dining, and entertainment all in one location,” TOK said. “The presence of traditional soft goods and clothing retailers in neighborhood centers will continue to decline.”

TOK in its year-end report said that nearly 70 percent of the overall retail occupancy came from retailers opening additional Treasure Valley stores, such as Dick’s Sporting Goods, Hobby Lobby, PetSmart, and Walmart Neighborhood Market, all in Nampa; Michaels at The Village, yet another Dick’s on Milwaukee Street in Boise, and a fourth eatery from Chick-Fil-A.

While some retailers have moved from downtown Boise to the Village, or have announced plans to, Bob Mitchell of TOK said he senses the Village might also play a role in strengthening downtown retail.

“I think that now they are getting established in the Village, they are looking at second locations and downtown is a natural place to look,” said Mitchell, a retail property sales and leasing specialist. “I think the Zions Building and the transit center have made downtown a nice place to do business.”

The Boise metro in 2014 welcomed a number of national names new to Idaho, among them Freddy’s, Corner Bakery, ABC Supply and Harbor Freight Tools.

“We are on the map,” Hume said. “We passed a population metric. We have reached over 600,000 people, which has put us on the radar. We are getting the first of many retailers.”

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