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Northtown Plaza feeling the Whole Foods effect

Big changes are coming to Northtown Plaza, but not everything will be new.

The new owner of the retail center in Amherst expects to spend as much as $75 million to redevelop the sprawling property at Niagara Falls Boulevard and Sheridan Drive with national and regional retailers to create a shopping destination.

That includes the new $15 million Whole Foods Market that will replace the long-vacant former Bon-Ton department store, as well as other major brands. And the developer also plans to retain some local flavor as part of the tenant mix.

That’s the model that WS Development has used across the country when it buys and rebuilds retail centers, whether in Tampa, Fla., or Jackson, Miss., or throughout its home state of Massachusetts.

“We believe a unique, vibrant retail destination includes a cultivated mix of local, regional and national tenants. We’ve been successful with this process in a number of centers,” said Andrew T. Manning, development project manager for WS, who is overseeing the Northtown project. “Our focus on redevelopment is bringing new-to-market stores that create a great mix and something new that we believe will be successful.”

That means largely seeking out stores that aren’t currently in Western New York, rather than luring them from other malls or plazas in the area. “The investment will be significant and the ultimate impact in the area will be quite noticeable,” he said, “and it will create that new destination that will fill that hole that is currently in the market.”

However, the developer wants a little public-sector help to make it happen.

WS Development has submitted initial paperwork to the Amherst Industrial Development Agency, seeking a mix of sales, mortgage and property tax breaks that could total $6 million to $8 million. According to the AIDA, the company says it needs that to make the larger redevelopment work. Otherwise, it might settle for a $15 million renovation of the plaza – new paint, new signs, repaving – in addition to the Whole Foods store.

Helping a retailer?

“It’s a pretty elaborate proposition,” said James Allen, executive director of the AIDA, who has met at least twice with WS officials. He said WS wants the IDA to consider the project at its June meeting, but the agency does not yet have enough information to make a decision.

And it’s not clear if that request would even win enough support to pass, if it even gets that far. “There’s a tremendous pressure to try to figure out how to make this work,” said Amherst Town Councilman Steven Sanders, who also is a member of the AIDA board. “I find it hard to believe that there would be a retailer that would justify doing incentives, but I have to wait until something is presented to us.”

Under IDA policy, retail stores don’t qualify for tax breaks, so the town is looking at whether a redeveloped plaza could be designated as a “tourist destination” that attracts people from outside the region, which could justify assistance. “If we could make the findings that it’s a tourism destination center, that would be fantastic,” Allen said.

But first officials need to see evidence that specific tenants can draw customers from more than 50 miles away. “It’s a very big stretch to say that retail is a tourist destination. Walden Galleria could probably make that claim,” Sanders said. “If it really is a destination that is going to bring people, then I guess it’s something we’d have to look at. But I have a hard time believing that’s going to be the case.”

In the meantime, uncertainty and rumors about the future of the 375,000-square-foot plaza and its tenants have sparked worry among existing retailers at Northtown who don’t know if they will be allowed to stay or if their rents will skyrocket. Already, the center is now half-empty, as tenants await more clarity from their new landlord.

Manning acknowledged that some tenants already have chosen to leave. He confirmed that executives have “generally engaged with the tenants in the center, and have had conversations with their businesses and how they fit.” But he would not comment on any specific discussions.

“We believe that the local tenants will benefit from the added patronage of the center. Obviously, there’s going to be an increase in traffic at the center ... That benefits all of the existing tenants,” he said. “We understand that some tenants may not remain with us.”

Whole Foods effect

The potential upheaval at one of the region’s oldest retail centers shows the strength and power of Austin, Texas-based Whole Foods, whose reputation for natural foods, organic products and prepared meals has created a cult following throughout the country. Its success also draws many other national retailers to locate near the grocer to take advantage of its power to attract shoppers. And the company’s higher-end image – it has been derided as “Whole Paycheck” because of its prices – tends to bring a more upscale customer base, which spills over into nearby stores.

But Whole Foods spokesman Michael Sinatra stressed that it’s still a full-service supermarket, rather than a specialty store as many people think. None of the products it sells, for example, have any preservatives, artificial colors or flavors, or similar ingredients, and it does cater to vegan, vegeterian, “paleo” and other special diets, he said. But it also offers “everything from milk and eggs” to flour, candy, seafood, cheeses from around the world, frozen foods, body-care products and prepared foods.

“People will shop our store much as they would any grocery store,” Sinatra said. “What they can feel confident about is the care and the quality of the food and ingredients that we sell.”

Construction to begin

For now, though, all attention is focused on construction. Just days after closing on its $18.5 million purchase of the 19-acre plaza, Chestnut Hill, Mass.-based WS Development said it expects to start demolition of the 100,000-square-foot Bon-Ton store within the next two weeks. Manning said there’s only “very minor” asbestos remediation that has to be finished first, but “it shouldn’t be a major issue” and won’t delay the dismantling of the building by Clarence-based Cambria Contracting, which should take about two months.

“It won’t slow down our schedule at all,” he said. “You’ll start to see physical activity commencing at the site.”

By mid-July or early August, crews will begin construction on a new 50,000-square-foot Whole Foods store that will occupy the same footprint. Unlike the Bon-Ton, though, it will be a stand-alone store separated from the main plaza building. So before work even began, the developer had to relocate retailer Plato’s Closet to another place in the plaza because its old space will be demolished.

Manning said Whole Foods doesn’t have a standard or “prototype” design, so stores differ from one location to another based on circumstances. In this case, for example, the site is actually visible from all four directions, which is unusual. So while the front of the mostly brick store, whose design already was approved by the town, will face Sheridan Drive, the building also will feature “architectural detailing” on all four sides, “so it’s not just a blank building,” he said. It also will include some wood and metal elements, with canopies over the windows.

“We definitely spent a little bit more time addressing all four sides so it was appropriate for the site,” Manning said.

WS expects to complete the shell of the building by early 2016, but specific details of the interior are still being worked out by Whole Foods, and likely won’t be finalized until the end of the year. The company already operates a store in Albany and announced one for the Rochester suburb of Brighton in 2017, but this is the first one for Western New York.

Hiring 200 for store

Sinatra, who is part of the grocer’s Northeast region, said none of the 32 stores in the three-state region are exactly the same, ranging in size from 16,000 square feet to 77,000 square feet, but averaging between 35,000 and 50,000 square feet. That means that, while “there are certainly a large variety of products that we carry nationally that are featured in all of our stores,” the rest of the store can vary significantly, depending on the amount of space, he said.

“They can expect a full-scale Whole Foods Market, similar to what we operate downstate and nationwide,” he said, adding that the company expects to hire about 200 workers. But “every store has different innovations and tweaks.”

For example, larger stores may have more space for cafeteria seating, or larger departments for prepared foods, meats or produce. And the chain does try to work with many local and regional vendors to carry different items based on local preferences and tastes. “We’ll be spending more time in the Buffalo area, meeting local purveyors and trying to have a pretty vast offering of local items,” Sinatra said. “Every time we open a store, we do push to find more local vendors.”

Plaza plans evolving

Once Whole Foods is open, WS will turn its attention to the rest of the plaza, which it acquired from longtime owner Jonathan Luther. Manning said those plans are still in flux, adding that a proposed new design that circulated among tenants last summer – showing many national clothing and other retailers but hardly any of the existing tenants – was just “one snapshot in time.” Since then, he explained, “there’s probably been 100 plans or more of different options and variations.”

“The future vision of Northtown is constantly evolving ... as we fine-tune our redevelopment and put it all into context,” he said. “When we have a plan in place that everybody can appreciate, get behind and support, we’ll bring forward that plan and receive the local approvals that we need to begin construction.”

And he expressed confidence in the overall project. “Northtown was a prime example of a center that had great value in its location, great value in the existing assets and infrastructure that supported the shopping center,” Manning said. “We think it’s an ideal location and we wouldn’t have acquired it if we didn’t believe we would be successful.”