This article first appeared in the Minnesota Shopping Center Association’s July 2012 newsletter.
With a blink of the eye, the Wayzata Bay Center was torn down to make way for a new development project in late April. The original shopping mall was built in the 1960s and served this suburban enclave of commuters for four decades. But the passing of time brings about needed change and construction has started on a new project on the site called the Promenade of Wayzata, which is owned and being developed by Presbyterian Homes & Services.
During its $125 million first phase, two 5-story buildings with ground-level retail shops and 225 senior living apartments will be built. According to the Star Tribune, a wide range of options will be offered including 148 independent senior units, 58 assisted living apartments, 18 memory care suites and 30 skilled nursing care suites.
Stefanie Meyer, Senior Vice President at Mid-America Real Estate, heads up the leasing efforts for the project. When her team got the assignment, she says their main focus was to secure an anchor tenant; and they have successfully done that. Lunds signed a lease in April and they will be one of the first retailers to open in the development, either in late 2013 or early 2014.
Meyer shares that they are working on leases for the remaining 15,000 sf within the superior block. There is a strong amount of interest, and they are talking to a diverse mix of boutiques, national retailers, sit-down and quick-serve restaurants and other service-oriented tenants. She explains that “we are just trying to put the puzzle pieces together with the initial interest we have received” but are dealing with some timing constraints due to the planned residential components. However, she is quick to add that “it’s a good problem to have.”
Overall, she says it is a thrill to add retail space back to an area that has offered limited opportunity in the past few years for new tenants to enter such a desirable market.
This highly anticipated project has put Wayzata back at the forefront of the Monday morning water cooler conversations. Here is a useful guide to what’s going on in Wayzata to help you be the smartest gal or guy in the room when the topic comes up:
Connected by Land and by Sea
Wazyata is located 12.6 miles west of Minneapolis and 25.2 miles west of St. Paul. If you are not arriving by boat to this lake-side town, there are three main roadways that run through Wayzata, connecting its residents and visitors to the Twin Cities: 1) Highway 12, which funnels into I-494 and I-394, hosts approximately 42,000 vehicles per day; 2) Wayzata Boulevard sees approximately 9,000 vehicles per day; and 3) Lake Street East enjoys 5,000 vehicles per day.
Small Households, Big Incomes
According to the 2010 U.S. Census, the city of Wayzata has a relatively small population of 3,688 residents, which are spread amongst 1,795 households. The average household size is only 2.04 compared to the national U.S. average of 2.58, according to the U.S. Census Bureau.
What it lacks in size, it makes up in wealth. Current median household income is $75,519 in the market area, compared to $54,442 for all U.S. households. Current average household income is $136,494 in this market area, compared to $70,173 for all U.S. households. Current per capita income is $66,027 in the market area, compared to the U.S. per capita income of $26,739.
In addition, the residents of Wayzata are slightly older (median age is 47 years old), well-educated (36.0% had a Bachelor’s degree compared to 17.7% in the U.S.) and pre-dominantly Caucasian (96.1%).
Significant Daytime Population
For a residential population of only 3,688 people, there is a significant daytime population in Wayzata. There are currently 617 businesses in the city of Wayzata for a total of 6,340 employees. It serves as a headquarters for TCF Financial Corporation and has become known as a home for wealth management firms, hedge funds and consulting companies. The list of businesses includes Merrill Lynch, Morgan Stanley Smith Barney, RBA Consulting, Wayzata Investment Partners and UBS Financial Services.
Healthy Retail Market
Wayzata is one of the most premier places to shop in the greater Minneapolis / St. Paul area for fashions, artwork, antiques and collectibles. According to a recent market study conducted by re-lytics®, there are 117 retailers and restaurants in Wayzata totaling 363,799 sf. This list includes the following: national favorites Ben & Jerry’s, Caribou Coffee, Chico’s, Chipotle, Starbucks and Talbots; regional players D’Amico & Sons, Lunds, STEELE Fitness and Wuollet Bakery; and local boutiques Five Swans, Fleurish, Gilded Gypsy and Maha.
The current vacancy rate for Wayzata is 3.43%. It outperforms the current Twin Cities market rate of 9.0%. It also compares favorably next to 50th & France, which boasts 118 retail tenants in 367,513 square feet and a current vacancy rate of 2.59%.
Reflected in these occupancy figures is the fact that Wayzata has seen a good amount of activity in the past year. Family Eye Clinic opened in September 2011 after relocating from their Plymouth location. Other store openings included Juliann Interiors, Manor House Interiors, Wintergreen Northernwear, POSH Bridal, Monique of Switzerland and Wayzata Jewelers. The most notable closing was Blockbuster Video during the first quarter of 2012. In the coming months, Noodles & Company has announced they will open a new restaurant at Colonial Square Shopping Center.
Wayzata has little to worry about as its total retail sales (supply) of $232,361,514 far exceed the population’s retail potential (demand) of $94,780,069. The numbers confirm what most already know – that the city of Wayzata is a great retail destination in the Twin Cities, attracting shoppers and their dollars from outside the immediate area.
When the Promenade of Wayzata project is complete, it will further help capture the hearts and purse strings of its residents and the larger Twin Cities market.
Peggy Douglas, President of the Greater Wayzata Area Chamber of Commerce expresses confidence in the retail market: “The fact that we are going to have this development has brought some energy to the town. The hope is that it will bring new people to Wayzata.”
She highlights the fact that, in comparison to many other shopping districts in the Twin Cities, Wayzata is “an adventure for people…something different.” Its close proximity allows people to make an easy evening or weekend trek and it offers a distinct downtown area with lots of amenities, the lake and the gardens. Further, Douglas says that the city, thanks to the help of Mayor Ken Willcox, has been making great strides to support
the local business community. Recent efforts include allowing restaurants to offer sidewalk dining on Lake Street and the launching of a new website in the next three to four months touting their new tagline for the city: “The Gateway to Lake Minnetonka.”
Her colleague, Nicole Biskey, Membership Services Director of the Greater Wayzata Area Chamber of Commerce, puts it best, “Things are definitely brightening up in Wayzata.”