By MIKE ANTHONY

Executive Editor

Retail, restaurant and entertainment uses should be added at the east end of the Westfield Shoppingtown Crestwood, a market feas-ibility study recommends.

The market feasibility study of the Watson Road Commercial District was performed by Melaniphy & Associates, a firm of real estate counselors, site selection specialists, market analysts, retail experts, restaurant consultants and international investment advisers based in Chicago, Ill.

The Board of Aldermen voted in February to have Melaniphy conduct the study in conjunction with the Westfield Corp.’s proposed redevelopment of the shopping center at a cost of $32,000.

Westfield paid for the study under the terms of a preliminary funding agreement with the city. Under the funding agreement, Westfield advanced the city $97,250 to pay for planning studies, reports and legal documents needed to proceed with the mall redevelopment.

John Melaniphy of Melaniphy & Associates presented the study to the Board of Aldermen Sept. 13. The study, he said, was completed before an Aug. 25 announcement by the Novus Development Co. and the May Department Stores Co. that a 160,000-square-foot Famous-Barr de-partment store will be first anchor tenant at Novus’ proposed MainStreet at Sunset in Sunset Hills.

The agreement would leave the Westfield Shoppingtown Crestwood with one less anchor tenant and Melaniphy in his study indicates that Dillard’s may decide to leave the Crestwood mall. Melaniphy also questioned the viability of the proposed MainStreet at Sunset.

“… First of all, it has significant problems,” Melaniphy said of the proposed MainStreet at Sunset. “I thought it had significant problems when I first saw it … Any time you’re assembling homes, it’s extremely difficult. Secondly, in my opinion, the developer had no experience in doing a major retail complex and (a) lifestyle (shopping center), which is the new vernacular in retail, is even more complicated. We have lots of experienced developers who’ve tried to do lifestyle centers and they’ve failed. And there aren’t going to be that many lifestyle centers even though everybody’s talking about them,” he said.

“So I think the legal issues are going to take a lot of years to resolve. I think there’s a real question about who the developer’s going to be and what we find is major players aren’t going to sit around and wait. So I think this thing may be around as a proposal for a long time …,” he added.

Regarding the Famous-Barr announcement, Melaniphy said, “The announcement occurred roughly two weeks ago, I believe, and I was shocked that that announcement was made because May made the announcement, but they’re being absorbed by Federated and I just don’t see them doing this. I may be wrong, but that’s my opinion.”

The market feasibility study included four alternatives, ranging from a do-nothing scenario to the entertainment one recommended by Melaniphy, which would encompass making “the east center entrance into a major entertainment, retail and dining concentration …”

The study also recommended building a new cinema and Westfield and AMC Entertainment officials recently announced their plan to build a megaplex AMC Theater at the front of the mall near Watson Road.

“… We relocate the food court, not just to the first floor, but into the east entrance so we create this synergy of food and entertainment. Add new entertainment venues and add new restaurant space. That’s important because it brings nighttime business into the shopping center,” Mel-aniphy said.

He also recommended adding new specialty retail stores and adding “junior big boxes” in the future if Dillard’s de-cides to leave. Office space also could be added to the upper floors at the eastern end if Dillard’s leaves, he said.

Improvements also are needed to parking access and traffic circulation on the eastern end of the mall, Melan-iphy said.

Furthermore, he said, “… We didn’t do a housing study, but it’s obvious there’s a market. At the eastern end of the center, there’s a big deck. I think you ought to be a major housing complex on that … How big it should be, I don’t know, but, you know, senior citizens today like to be close to things and if you could have housing as part of a mall or on their property and they can walk without getting killed, they like it …”

Of his recommendation, Melaniphy said, “This alternative is the most economic of the four alternatives and the more you improve the mall, the better the Watson Road Commercial District will be because the mall is the primary magnet.

“One of the reasons that the district has slowed down is because the mall has lost sales to the (big) boxes. So what we’re trying to do is create more interest … This improvement, as I said, will have a major positive impact on the entire Watson Road Commercial District …,” he said.

In response to a question from Ward 1 Alderman Richard Breeding about how Crestwood can compete with neighboring cities for retail sales, he said, “You’ve already got one of the big assets and that’s the mall. And the way you keep up with the ‘Joneses’ is make sure, first of all, that your primary asset is viable and that’s in 2005 and it’s going to be ready for 2007 and 2009 and so forth. And then, maintain and improve the district, making sure that you’ve got strong retailers and if you don’t, help people get the stronger retailers.

“If you improve the mall, any problems — almost any problems — you have on Watson Road will go away be-cause it will create demand, your other retailers are going to want to be here …,” Melaniphy said.

Ward 3 Alderman Jerry Miguel noted that the study’s assumptions are based on Famous Barr staying at the mall.

While the proposed MainStreet at Sunset development may be experiencing problems, “Famous has announced that they’re planning to leave (Crestwood),” Miguel noted.

“When it was the May Co.,” Melaniphy responded. “It was announced by the May Co. and then four days later, Federated merged. Federated hasn’t made any announcement.”

Miguel asked, “… Do we need to be looking at alternatives relative to Famous leaving? You had an alternative relative to Dillard’s …”

Melaniphy said, “The reason that that wasn’t even considered as an alternative was because we found out after we were done. Should you be considering that? First of all, I would go to Federated. I would get Westfield in my arm and I would go to Federated and say: “Listen now, let’s talk.’ We haven’t heard from Federated and they own them now … Yes, if it looks like that’s a probability.”

“I don’t think it is. You don’t walk away from a store that’s doing what this store (is),” he continued. “Now it’s true their sales have declined like other department stores. But it costs a lot of money today to build a new store and today developers don’t bring you those stores for a buck and a quarter the way they used to. Now you’ve got to pay your freight today.

“So I don’t see … if Sunset Hills goes ahead, I don’t see Federated jumping over there, in my opinion. OK? If Sunset Hills doesn’t go ahead, I still don’t see Federated walking …,” he added.

Ward 2 Alderman Jim Kelleher said, “… Mr. Jonathan Browne, the developer of the Sunset Manor project, has told members of this board and members of the staff that his development will do nothing but improve the economic viability of the Watson Road Corridor.”

Melaniphy said, “He’s absolutely wrong.”

Kelleher said, “And so why do you disagree with him?”

Melaniphy said, “Because they’re going to end up as two competitive nodes. It’s new competition. It’s new stores. He, I believe, proposed roughly 585,000 square feet. To be a lifestyle (center) … he needs to be doing an absolute minimum of $250 a square feet, but he should be doing between $300 and $400 a square foot. You do the math. It has to come from somewhere — not creating a new market, you’ve got to take it from somewhere …”