Gloucester Premium Outlets – Perils & Potential Part I: Perils

Barring any last minute challenges at the county or state level, it is safe to assume that the ceremonial groundbreaking for the Gloucester Premium Outlets® will occur before the beginning of November 2013.

I think, on the whole, this will be a good development for Gloucester Township. However, every project has both benefits and drawbacks, and it is important to explore both. For this edition of The Kola Files, let me share what I perceive to be some of the perils of building and opening the Gloucester Premium Outlets® here in Gloucester Township.

PAYMENT IN LIEU OF TAXES ABATEMENT

The single most detrimental action that the elected officials of Gloucester Township could take with the Gloucester Premium Outlets® is granting a payment in lieu of taxes (PILOT) abatement to Simon Management Associates II, LLC, and its development partner, PREIT-Rubin, Inc. My previous four blog entries have dealt extensively with Five-Year Tax Abatements and PILOT agreements, so I won’t reiterate the specifics here, but state instead that any plan that limits the Outlets’ county taxes to five percent and provides zero taxes to our local schools is absolutely unacceptable.

A PILOT agreement in this instance seems unnecessary. The builders of the Gloucester Premium Outlets® have already been granted approval by the Township for a site that is called “Vacant land (Agricultural)” in the official Land Development Application* submitted by Simon Management Associates. While the land may qualify for a PILOT agreement because the Township considers it underdeveloped, entering into a PILOT agreement would defeat the purpose of developing the land: to increase the commercial ratable base, thereby alleviating some of the tax burden on residential property owners. While the Outlets would still pay Township taxes, the agreement that provides a reduced contribution to Camden County taxes and no contribution to local school taxes would leave it to the rest of the taxpayers in the county and township to make up the Outlets’ missing share.

Simon Property Group, Inc., the parent company of Simon Management Associates, in its 2012 Annual Report, states that the company “is an S&P 100 company and the largest real estate company in the world. Our portfolio includes more than 320 retail real estate properties in North America and Asia encompassing the entire retail spectrum – Malls, Premium Outlets®, The Mills® and Community/Lifestyle Centers.” The report also says that Fortune magazine recently named them, for the fifth time, the Most Admired Company in the real estate industry. As David Simon, Chairman and Chief Executive Officer, states, “I love cash flow, and growing cash flow is how we measure our success.” This is clearly a successful company because its 2012 consolidated revenue increased 13.3% over the previous year to $4.9 billion.

In all likelihood, Simon Property Group has done their due diligence in researching all aspects of putting a Premium Outlets® in Gloucester Township. A company of this size, with such extensive experience in retailing, does not undertake the task of planning and building a project unless they are sure it will succeed.  That success won’t be contingent on the awarding of a PILOT agreement. The monies not paid in taxes to the county and schools through a PILOT agreement will instead go to increase shareholder value in Simon Property Group. While Simon supports education through the public charity Simon Youth Foundation (SYF), which provides educational opportunities for students who are at risk for dropping out of high school, a better way to support all public school students and all taxpayers in Gloucester Township would be not to apply for, or accept, a PILOT agreement from the Township.

If the Gloucester Premium Outlets® will only be built if a PILOT agreement is granted, then let it not be built. Gloucester Township will not be any worse off than it is currently, and the community will benefit from the existing road, which provides a nice, short, scenic drive through farmland.

THEY BUILD IT . . . AND NO ONE COMES

Okay. Someone will come, but let’s say not as many come as predicted. What if all of the target audience surveys conducted and all of the numbers analyzed did not accurately reflect the southern New Jersey region?

Since this is a joint venture with PREIT-Rubin, Inc., which is based in Philadelphia, PA, and operates the Cherry Hill Mall, the Voorhees Town Center, the Moorestown Mall, and the Gallery at Market East, along with 34 other shopping centers, I would guess that PREIT is, in part, providing their experience in, and expertise with, the Southern New Jersey/Philadelphia Metro market.

However, what if communication wires between the two companies get crossed and details fall between the cracks?

Take a look at the picture at the top of this page. This is a map from page 24 of Simon’s Development Portfolio 2013, which lists the Gloucester Premium Outlets® as one of their new developments. Notice a problem? For all of the talk about putting our town on the map as a major shopping destination, I would feel more confident if Simon’s map correctly identified us as Gloucester Township and not Gloucester City.

Admittedly, this is a small error on Simon’s part and it will not have an adverse effect on the project. However, it is an example of how a small aspect of any project can be overlooked and mistakes made. We can only hope that no big mistakes were made in the market analysis of our area for this project.

TRAFFIC: TOO LITTLE?

Under that map of the Gloucester Premium Outlets® on page 24 of Simon’s Development Portfolio 2013, there are three bullet points. The first bullet point gives a one-sentence description of the physical attributes of the project. The second bullet point lists PREIT-Rubin’s involvement. What I find most interesting is the third bullet point, which reads: “Will serve Cherry Hill from its location off the Atlantic City Expressway.”

Cherry Hill residents are seen as the primary target audience for the project. However, since this project was described as a regional draw at the Gloucester Township Planning Board meeting on July 23, 2013, I think you can rightly include Moorestown residents and even some Pennsylvania shoppers who would cross either the Walt Whitman Bridge or the Benjamin Franklin Bridge. The third bullet point also describes the new College Drive – Exit 7B of Route 42 as the main entry to the Outlets for these shoppers.

If I were traveling from Cherry Hill or Moorestown to reach College Drive, I would drive down Interstate 295 south and then take Route 42 south to Exit 7B. Sounds simple and direct. Yet, we must consider the impact of a major factor: the Direct Connection, more formally known as the I-295/I-76/Route 42 Direct Connection in Camden County. This is the project that is intended to make the I-295/I-76/Route 42 interchange safer, reduce traffic congestion, and “address quality-of-life issues relating to motorists, residents, and the environment.”

The first phase of this project began in March, and the last phase is not expected to be completed until 2021. If the Gloucester Premium Outlets® open as scheduled in the fall of 2014, shoppers from Cherry Hill, Moorestown, and even Pennsylvania will face narrowed lanes, lane closures, and possible detours for roughly seven years. How bad could it get? Did you ever drive through the construction area when the Airport, Berlin, Collingswood, or Ellisburg Circles were eliminated? Traffic congestion was horrible not only during rush hour but also on Saturdays and Sundays. Now, take those conditions and apply them to the busiest interchange in the region. Will the potential shoppers from Cherry Hill, Moorestown, and Pennsylvania attempt to navigate through these obstacles, or will they decide to stay closer to home and shop at the Cherry Hill Mall, the Moorestown Mall, The Promenade at Sagemore, or The Plaza and The Court in King of Prussia? More importantly for Gloucester Township, how will this affect the first seven years of operation of the Gloucester Premium Outlets®?

TRAFFIC: TOO MUCH?

If the Direct Connection interchange construction is able to minimize the disruption to shoppers coming from the north on both I-295 and Route 42, will the new College Drive interchange exit and roadways be able to handle the increase in traffic?

Vehicles routinely travel Route 42 at 60 to 65 miles per hour, and while the off-ramps can handle the current traffic decelerating from those speeds, what will be the effect when the volume of traffic increases substantially with the opening of the shopping center?

When vehicles clear the exits, they enter the new roadway system on the property slated for development. While many people disagree with the inclusion of traffic circles on these roadways, I do not because these are not in fact traffic circles but, technically, roundabouts. Tom Vanderbilt points out in Traffic: Why We Drive the Way We Do (and What It Says About Us), roundabouts are much more efficient and safer than cross intersections or traffic circles. As Vanderbilt writes, roundabouts “eliminate entirely the two most dangerous moves in an intersection: crossing directly through the intersection, often at high speed, . . . and making a left turn.” If these new roundabouts are not removed and replaced with intersections during the construction of the outlets, I would try to make them safer by installing rumble strips right before each roundabout entrance and posting, under the current yield signs, another sign that reads, “Vehicles in circle have right of way.”

My main concern with the roadway system is how well it will handle the increased volume. The roads are one lane in each direction, which is more than adequate for the traffic currently going to and from Camden County College, but how will these roads handle both the college traffic and the added shopping traffic? At the very least, I would think that the road would be widened to include left turn only lanes into the shopping center parking lots. However, the new bridge over Route 42 will still be only one lane in each direction. I see a nightmare of traffic jams on Black Friday and weekends during the Holiday shopping season.

Let’s consider the Gloucester Premium Outlets® entrances and exits from the Black Horse Pike at College Drive and Zimmerman Drive. I think both roads will experience heavier traffic from the south, with shoppers from Washington Township using that first exit off of northbound Route 42 to wrap around onto the Pike to avoid congestion at the College Drive freeway exit. In addition, northbound traffic on the Black Horse Pike will increase because some shoppers would rather hack their way along the secondary arteries than put up with the possible backups caused by the Direct Connection construction.

The one piece of good news for the home and business owners near the Black Horse Pike and Zimmerman Drive intersection is that the Gloucester Township Police Traffic Safety Unit, in their Site Plan Review, requested installation of a traffic signal at that intersection to allow for a left-hand turn onto the Pike from Zimmerman. (The police Site Plan Review can be found on page 35 of Simon’s application* for the shopping center.)

RETAIL PIRACY

Will the Gloucester Premium Outlets® steal retailers from The Shoppes at Cross Keys? While most would agree that the shopping center is not a raging success (other than the eateries located there), most of the original retail tenants are still there: Banana Republic, Chico’s, Coldwater Creek, Jos. A. Bank, Justice, Lane Bryant, Loft, New York & Company, Rack Room Shoes, The Sleep Number Store, White House/Black Market. Will the new Outlets center be more attractive to any of these retailers? If so, could Gloucester Township be left with another mostly empty retail center, this time on its southern border?

These are just some of the perils that the Gloucester Premium Outlets® could present to Gloucester Township. I’m sure other residents could think of more. However, even with these downsides, I stand by my original statement: I think this project will be a good development for Gloucester Township. Simon Property Group’s building of the Gloucester Premium Outlets® is an investment in Gloucester Township’s future, and it will be up to our Township government to make sure that the investment attains its fullest potential for all residents.

Next time: 

Gloucester Premium Outlets – Perils & Potential  Part II: Potential

*The application is part of the Gloucester Township Planning Board Agenda for May 28, 2013, and may take a few minutes for the entire document to load in an internet browser.