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Open-air competition on horizon as Niagara-on-the-Lake mall poses economic challenge to Falls USA

A new outlet mall in Niagara-on-the-Lake, Ont., is getting ready to give Fashion Outlets of Niagara Falls a run for its money.

Outlet Collection at Niagara will open May 15 near the White Oaks resort just off the Queen Elizabeth Way.

The mall’s 520,000 square feet of leasable space will host more than 100 retailers. The $162 million project is an attempt to capture more of the nearly $1 billion that Canadians currently cross the border to spend at malls in the Buffalo Niagara region.

“We all know about the lineups at the border. We think if we can build a better mousetrap on this side, then we can stop them from going across,” said David A. Baffa, senior vice president of retail development at Ivanhoé Cambridge, the real estate company that is building the mall.

If that happens, it could spell trouble for Fashion Outlets of Niagara Falls, which relies on Canadian shoppers for about 80 percent of its business. That mall is currently undergoing a $71 million expansion in order to compete. The mall has not yet released a list of retailers that will be included in the expansion, which will be complete in the fall.

Canadian shoppers have long cited better selection, lower prices and lower taxes as reasons to shop in the United States.

But Outlet Collection says it will satisfy Canadians’ craving for brand names at discount prices while bringing several stores that have yet to enter the Canadian market, including White House Black Market Outlet, L’Occitane, Michael Hill, Pandora Outlet, Chico’s Outlet, RUD by Rudsak and Bass Pro Shops Outpost.

The mall’s marquee retailers include Kate Spade, Nike, Calvin Klein and Michael Kors, each of which has stores at Fashion Outlets of Niagara Falls.

The Canadian dollar is currently at 91 cents American. If the power of the loonie continues to fall, it could further entice Canadian shoppers to do their shopping at home.

That could put a serious damper on the economy in Western New York. Canadians who crossed the border to shop here in 2012 spent $174 million dining out in the region and an additional $88 million on overnight lodging.

But for now, even Canadian shoppers themselves aren’t sure how things will play out.

“We’ll have to see what they have to offer and how the prices are,” said Monique Roberts, of Niagara Falls, Ont., who shops in the United States about once a month. “I guess we won’t know that until they open.”

The mall hopes to capitalize on tourists visiting the wineries and attractions in and around Niagara Falls and Niagara-on-the-Lake and expects to draw 80 percent of its customers from Western Ontario and the Greater Toronto Area. It also expects to draw some of the roughly 1 million American visitors who make overnight trips to the region each year.

The mall’s open-air design, with its outdoor common areas and partly covered walkways, raised eyebrows, but Baffa said open-air malls have a track record of being very successful in northern climates, such as the Woodbury Common Premium Outlets near New York City. He said that shoppers expect outlet malls to be of the open-air variety, since that’s how they are typically presented, and that the new mall didn’t want to deviate from that.

“All of the power centers are open-air,” Baffa said. “If we did a closed center, people might have a perception that we don’t provide the same values.”