The highly successful Niagara International Factory Outlets may be under new ownership by the start of the holiday shopping season.
Baltimore-based Prime Retail Inc. confirmed Wednesday that it is in negotiations with Buffalo's Benderson Development Co. to purchase what is one of the largest outlet shopping venues in the country. The talks also involve a Benderson-owned outlet mall outside Redding, Calif.
Prime spokesman Brian J. Lewbart said while no deal has been finalized in the nearly six months since discussions began, talks are progressing.
"We are working on it, but we're still a little bit away," Lewbart said.
Benderson's interest in selling the recently remodeled and expanded outlet mall may be surprising to local shoppers, but it does fit the company's recent pattern of reducing its outlet mall portfolio.
In February, Benderson sold three of its five outlet-format centers to Prime. The centers -- Oak Creek Factory Outlets in Sedona, Ariz.; Bend Factory Outlets in Bend, Ore., and Coeur D'Alene Factory Outlets in Idaho -- brought a sale price of $37.5 million.
Prime, which is ranked as the second-largest developer, owner and manager of factory outlet centers, entered into talks with Benderson about buying the Niagara County and California properties began shortly after the first deal was consummated.
Randall Benderson, president of Benderson Development, declined to comment on the negotiations. A Benderson insider, who requested anonymity, said rumors that discussions also include a potential co-management arrangement are completely untrue.
"Either we sell or we don't.
There's no middle ground here," the source said.
Unlike Benderson, which has dabbled in outlet malls but is primarily a strip center owner and developer, Prime Retail's sole focus is its 26 outlet centers in 20 states.
That rapidly expanding outlet mall portfolio includes today's announced purchase of Kittery Outlet Village and the Tidewater Factory Outlet Mall in Kittery, Maine and the Latham Factory Outlet Center in Latham, N.Y., north of Albany. The combined purchase price of the properties was $26 million.
With those recent acquisitions, Prime Retail's outlet center portfolio now grows to approximately 6.5 million square feet of gross leasable space.
Many of the manufacturers found in a typical Prime center are also represented in the 150-tenant Niagara International Factory Outlets.
Its largest property, the 533,000-square-foot Grove City Shops, north of Pittsburgh on Interstate 79, is currently its closest mall to the Buffalo area. If the Benderson deal is consummated, the 680,000-square-foot Town of Niagara mall would top Prime's list in terms of size.
The typical Prime center averages 255,000 square feet in size with about 80 tenants. Prime-built centers are usually constructed to resemble small villages, with enclosed food courts, children's playgrounds, customer service centers and extensive landscaping.
Publicly traded Prime Retail has been in the shopping center business since 1988 and is considered an extremely successful operator of outlet malls. In early January, it reported that its stable of what was then 21 centers attracted 41 million shoppers.
That year-end scorecard also indicated that average sales per square foot in 1996 were $238, or 12 percent higher than the industry average of $213.
In that report, William H. Carpenter Jr., Prime's president and chief operating officer, said today's value-oriented consumers have come to embrace the outlet mall concept.
The Niagara International Factory Outlets began its life in 1982 as a low-budget collection of outlet stores housed in the former King's Department Store at 1900 Military Road. Over the years the facility was expanded and upgraded, but the biggest change occurred in 1996 via a $20 million-plus renovation project that added nearly 300,000 square feet to the facility and attracted dozens of sought-after outlet tenants.
The new tenant roster includes: Saks Fifth Avenue's Off 5th, Christian Dior, The Gap, Coach, Tommy Hillfiger and Liz Claiborne.
Somerset Capital to buy
stake in drilling firm
Somerset Capital Partners of Buffalo, a privately held investment group, is about to become an equity partner in the newly established Union Drilling Inc., a division of the Houston-based Equitable Resources Energy Inc.
The Union Dilling Division, active in the Appalachian Basin and in Utah, employs 360 and has annual revenues of $30 million, according to Thomas H. O'Neil Jr., Somerset's chairman.
Terms of the sale, expected to be completed this month, were not disclosed. Last April, Somerset announced that it had acquired a 33 percent interest in Gray Wolf Drilling Co., another Texas-based oil and gas well developer.