Farah site shopping center may open in 2011

EL PASO, Oct 04, 2009 (El Paso Times - McClatchy-Tribune Information Services via COMTEX) -- WNR | Quote | Chart | News | PowerRating -- The national recession hasn't stopped plans for the proposed $100 million shopping center at the old Farah factory site on the East Side, the developer said.

West Miller, president and owner of Centergy Retail, of Dallas, and partner in the retail project with Western Refining CEO Paul Foster, who owns the Farah site, said he has more than 20 letters of intent and leases from major national retailers for the proposed center. He said names of prospective tenants could not yet be released.

National retailers continue to have interest in the proposed center because El Paso's retail sales volumes have been holding up better during the recession than volumes in many other places in the country, Miller said.

"I'm currently working at converting letters of intent to leases. ... When we have leases signed with tenants, then we'll go forward with demolition" of the mammoth Farah building, he said. "We probably will start demolition in the first half of 2010."

Plans call for opening a 200,000- to 300,000-square-foot first phase of the project, to be named The Fountains, by the fall of 2011, Miller said. The entire project is expected to be 500,000 square feet.

The former Howard Johnson's Hotel and former International House of Pancakes restaurant next to the Farah building, which are part of the entire site owned by Foster, were recently torn down to allow the developers to meet a November deadline for beginning site work under a city and county tax incentives

agreement. The city and county last year agreed to give the proposed project up to $18.7 million in sales and property tax rebates over 10 years when stores begin operating at the center.

Under the agreement, construction must be completed by 2013, Miller said.

Kathy Dodson, director of the city Department of Economic Development, said the current tight credit market and recession probably make it more difficult for the developers to find retail tenants for the project.

"I think they have every intention to move forward with it," Dodson said. "Maybe their timing is perfect" because the economy is beginning to improve, she said.

Miller said the project's development timetable was pushed back "in anticipation of construction costs going down," which has happened because of the national recession, Miller said.

Miller started working on the project as an executive for Regency Centers of Jacksonville, Fla. In May, Miller formed his own company to develop and invest in retail projects and, he said, he's "stepped into Regency's position" as partner in the Farah project.

Foster bought the 50-acre Farah site, near Cielo Vista Mall, in 2005 from an out-of-town investors group for an undisclosed amount. He later purchased the adjoining hotel and restaurant properties.

Vic Kolenc may be reached at vkolenc@elpasotimes.com; 546-6421.

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