News | Galleria project aims to up glam factor
September 05, 2013
By David Kaplan | Houston Chronicle
An ambitious plan to bring more high-end retail to the Houston Galleria will start with moving Saks Fifth Avenue into fancier digs and getting rid of one of the mall's two Macy's department stores.
When demolition and reconstruction of what is now the Galleria III is complete, scheduled for fall 2015, an expanded Saks flagship will open in the space now occupied by the Macy's facing Sage and other shops.
Mall developer Simon Property Group plans to renovate the existing Saks space nearby to accommodate about 35 new stores and maybe some restaurants.
The plans unveiled to the Houston Chronicle on Wednesday also call for a free-standing "luxury jewel box" to be built for select tenants who want a high-profile presence facing Westheimer.
Simon said it might even add a 300-unit high-rise that would provide well-heeled residents direct access to Galleria shops. The renovations are driven by retailer demand, "especially among luxury tenants," said David Contis, president of Simon Malls.
"The Galleria is among the pinnacle of properties in our portfolio and generates sales of $1.25 billion, which is tremendous productivity," he said.
The most visible change includes tearing down the existing Galleria III and moving Saks to a space with 198,000 square feet on two levels, Contis said, up from its existing 180,000 square feet on three levels.
Starting from scratch in a brand-new space will allow Saks to create a "state-of-the-art" store, he said.
Macy's supports plan
Simon Property Group
Rendering of the space currently occupied by Saks Fifth Avenue that will house about 35 new stores.
The changes also will allow Macy's to consolidate into its Galleria store that faces West Alabama and Hidalgo. Macy's has had to operate two stores in the Galleria since its parent company's 2005 acquisition of the Foley's chain, which had a lease there already.
Macy's supports Simon's redevelopment plans, spokeswoman Melissa Goff wrote in an email. She said combining its own store locations "will make for a more convenient one-stop Macy's destination."
"We expect to accommodate the vast majority of our existing associates in the consolidation and foresee very little disruption in our business," she wrote.
Simon also will construct a standalone building in the surface parking lot in front of the Galleria along Westheimer, about midway between Neiman Marcus and the future Saks, Contis said.
Contis described the planned one-story building as a "luxury jewel box" for two or three high-end tenants that will be able to "create their own branding image along Westheimer."
Simon has not yet announced any new tenants.
The Galleria covers 2.2 million square feet and includes about 400 stores and restaurants, two hotels and three office towers.
It may soon get a residential component.
Contis said a 300-unit residential high-rise - with an outdoor pool and an indoor connection to the Galleria - is envisioned for the corner of West Alabama and Sage.
He said Simon is still in the planning process, studying infrastructure and construction issues, "but we think it can get done."
'Epicenter of retail'
News of the upcoming changes did not surprise Ed Wulfe, chairman and CEO of Wulfe & Co., retail development and brokerage firm.
He said the Galleria "continues to reinvent itself with new and different tenants" while remaining a top destination for visitors from out of town.
"The Galleria is the epicenter of retail in all of Houston," Wulfe said. "It's always been the top producer (locally) of sales per square foot."
Contis noted other upgrades to the Galleria property already under way. They include installing LED lighting in the parking garages and new directional signs.
Renovations and relocations
- Galleria III, a wing that includes the Macy's store facing Sage, will be torn down to make way for a Saks Fifth Avenue flagship.
- The current Saks space will be renovated to hold about 35 new stores and maybe restaurants.
- Macy's will consolidate into its department store that faces West Alabama and Hidalgo.
- A building for a few high-end tenants will be built in the surface parking lot along Westheimer.
The Houston Chronicle, September 5, 2013