Developers of Crossroads' nearly $400M revival vow luxury brands, one-of-a-kind retailers - Omaha.com
Published Friday, January 31, 2014 at 12:00 am / Updated at 12:26 pm
Developers of Crossroads' nearly $400M revival vow luxury brands, one-of-a-kind retailers

Demolition of the Crossroads Mall, the ailing shopping center at 72nd and Dodge Streets, could begin as soon as this summer, requiring about a dozen retailers to move at least temporarily to make way for redevelopment.

In their place, developers promise a community with one-of-a-kind and new-to-market retailers, above-store offices and residences, an urban park and, tying it all together, ultra-fast Internet.

Many of the mostly empty mall's current tenants are on short-term leases and would have to close or relocate their shops once the project is underway, said Frank Krejci, who owns the mall and leasing rights on property west of it to 76th Street that would be part of the redevelopment.

The nearly $400 million project, other than the existing parking garage and the Target store that opened in 2006, would be built from the ground up in an open-air design with an urban park in the middle. Structures to the west of Target — including the Best Buy store at 7520 Dodge St. and its neighbor, a long-vacant grocery store, as well as the Applebee's Restaurant at 74th and Dodge — would be leveled.

Developer Rod Yates of OTB Destination said he is in talks with Sears, which, unlike some other stores, is on a long-term lease in a building separate from the mall. Yates declined to provide details, and Sears manager Steve Randles declined to comment.

Barnes & Noble, which occupies space in the existing mall, is on a short-term lease and would have to close or relocate during the demolition and construction phase, Yates said.

Yates said he hopes that Barnes & Noble would return to the area when the new mall opens. “My plan has always been for them to be part of Crossroads Village. We want a bookstore.”

A manager at the Crossroads' Barnes & Noble said Thursday that store officials do not have any comment at this point.

The Best Buy and the former grocery store are owned by the University of Nebraska Foundation, but the 99-year lease on the property, which ends in 2059, is owned by Krejci, giving him control over the property's current and future tenants. Krejci purchased the lease on the property from the Alan Baer Revocable Trust in late 2012.

Krejci also holds the lease on Applebee's Restaurant at 74th and Dodge. The restaurant, which is under a short-term lease, would also have to relocate under the Crossroads redevelopment plan. Applebee's employees would not comment Thursday, referring inquiries to their corporate headquarters.

The project's area would end at the strip mall occupied by Buffalo Wild Wings and Charleston's Restaurant at 76th and Dodge.

“They are not part of the development,” Yates said.

Yates and Krejci are riding a wave of success after the November launch of the Nebraska Crossing Outlets shopping center in Gretna, which also was mostly vacant before it was torn down and rebuilt. The experience netted them a network of new stores, including new-to-market retailers that Yates said already have expressed interest in opening full-price stores in Omaha.

Many Nebraska Crossing tenants are “reporting sales figures that have far exceeded expectations,” said Yates, who also helped recruit tenants for Legends Outlets in Kansas City, Kan.

Krejci's track record in residential, retail and office development dates to 1960 and includes such projects as Oak View Mall, Brentwood Square in La Vista, Centech Business Park, the West Shores neighborhood in Waterloo, Neb., and restoration of the Blackstone Hotel.

The pair's attention now turns to the Crossroads, the struggling indoor mall that Krejci purchased for $10.5 million in 2010. The developers plan to invest $234 million in the redevelopment.

Crossroads Village, as the mixed-use redevelopment would be called, would offer 50-plus acres of retail space, “creative class” office space that would attract high-tech startups and provide corporate headquarters for more established businesses, as well as restaurants, 400 “luxury loft residences,” a health club, bike path and, potentially, a new fully wired library branch.

The developers envision the Crossroads project to be a dynamic place to live, work and play, a “smart and useful district that will be relevant and meaningful for years to come” — a return of the Crossroads to an “iconic and transformative” center of commerce.

To put the wrecking ball in motion, Krejci and Yates are seeking a total of $161 million in city incentives — a combination of general obligation bonds, sales tax revenue and tax-increment financing.

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To begin construction, Yates said, bankers will look for 50 percent of the space to be committed.

Developers say the project will create 900 construction jobs and 2,200 permanent jobs, and attract 3 million visitors annually.

Yates said he might announce a handful of new Crossroads Village tenants this spring, but only if the stars point toward voter approval of the $50 million bond issue, which would fund infrastructure improvements to streets, sewer lines and utilities in the redevelopment district.

“I'd want to see a high level of excitement to get this done,” Yates said.

To measure some of that enthusiasm, Yates is launching an interactive website, crossroadsomaha.com, that will allow visitors to suggest which retailers and amenities they'd like to see: 300,000 square feet of retail space still is up for grabs by stores, restaurants and entertainment venues. (Yates hinted that 100,000 square feet was spoken for.)

Developers also plan a 135-room boutique hotel. Stamford, Conn.-based Starwood Hotels and Resorts Worldwide Inc. would put the company's Aloft brand on the eight-story luxury hotel, Yates said.

When completed, Crossroads Village would also offer 300,000 square feet of office space: a traditional eight-story building plus offices above ground-level storefronts.

Like at Nebraska Crossing Outlets, CenturyLink will provide Crossroads Village with a high-speed, one gigabit-per-second broadband network with voice, data, video and cloud-based services, said Danny Pate, CenturyLink vice president and general manager for Nebraska. Yates said the planned “smart” network already has attracted some technology companies interested in the office space.

The project's targeted completion date is June 8, 2016, a nod to Crossroad Mall's original opening date, June 8, 1961.

Omaha City Councilman Pete Festersen, who represents the area and is championing the redevelopment, said he frequented the Crossroads as a kid in its heyday and went to the intersection for the spontaneous street celebration after the Huskers won the national championship in 1994.

“I am excited to see the next chapter come to fruition for the property and its surrounding neighborhoods.”

* * * * *

Correction: An earlier version of this story incorrectly listed the name of the Best Buy and former grocery store west of Crossroads Mall.

Highlights of plan, by the numbers

2 Crossroads buildings will remain — Target and a parking garage

2-acre public park. Retail shops and residential space above the storefronts would overlook the urban park.

135-room boutique hotel

400 “luxury loft” residential units

45,000 square feet of “digital, next generation” library space

How Crossroads Village would compare

Crossroads Village — 400,000 square feet of retail shops, department stores and restaurants, 300,000 square feet of office space, 400 residential units, 135 hotel rooms. Public spaces, including a digital library and two-acre park. Estimated cost: $397 million. Scheduled opening: June 2016.

Midtown Crossing — 222,000 square feet of retail and entertainment space and 500 residences, plus 132 hotel rooms. Overlooks Omaha's Turner Park. Cost: $365 million. Opened in 2010.

Aksarben Village — 280,000 square feet of retail, service and entertainment and 660,000 square feet of office space, plus 600 residential units and 135 hotel rooms. Projections for 2015: 400,000 square feet of total retail, 1 million square feet of offices and 385 hotel rooms. Cost of redevelopment announced initially was $166 million, but the project's scope has grown and a $50 million Waitt Plaza that would add retail, restaurant and office tenants was announced in December. That project was described as bringing total spending on the former horse-racing property (Aksarben Village, University of Nebraska at Omaha's south campus and corporate offices) to about $650 million. Phase one of Aksarben Village opened in 2008.

Other recently developed open-air malls in the metro area that do not have office and residential components — Nebraska Crossing Outlets in Gretna, 350,000 square feet, $112 million, opened in November; Shadow Lake in Papillion, 880,000 square feet and a cost of nearly $100 million at the time of the 2007 opening; Village Pointe, 650,000 square feet, cost reported as $124 million in 2002, opened in 2004.

Sources: World-Herald archives, developers and commercial brokers

Contact the writer: Janice Podsada

janice.podsada@owh.com    |   402-444-1142

Janice is a retail reporter for The World-Herald's Money section.

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