Tuesday, November 14, 2017

Simon Says Bye to Belk, Konnichiwa to Nobu Hotel and Restaurant

Belk confirmed yesterday that it will close its store in Buckhead's Phipps Plaza in 2018.  The three level, 170,000 square foot store opened in 2006, following the company's acquisition of Parisian, which had occupied the space previously. In 2007, the company designated the store a "flagship," a term reserved for only a handful of Belk stores that meet certain square footage and sales metrics.  
Belk never seemed to resonate with the Buckhead community and its closure had been rumored for years.  Sources close to both the retailer and mall owner Simon Property Group said the closure was "a mutual decision."  

The closure of Belk at Phipps Plaza comes after the retailer closed its store at Gwinnett Place Mall in 2013.  Belk was sold in 2015 to New York private equity firm Sycamore Partners for $3 billion with then CEO Tim Belk saying at the time that there were no plans for layoffs or store closings.

Belk, which is based in Charlotte, North Carolina, will also close its stores in Brookwood Village, near Birmingham and in Morgantown, West Virginia, in January and March 2018 respectively.  The retailer closed its store at Roosevelt Square in Jacksonville this past January. 
Remnants of Belk's past life at Parisian at Phipps Plaza
Belk continues to operate about 30 other locations in Georgia, none of which are inside the perimeter.  Among the remaining stores are those at The Forum in Norcross, Town Center at Cobb in Kennesaw, Mall of Georgia in Buford, and more rural locations such as Thomaston, Toccoa and Centerville.

To fill the space left vacant by Belk's upcoming departure, Phipps Plaza owner Simon Property Group, based in Indianapolis, has partnered with Miami Beach-based Nobu Hospitality to open a 150 room hotel as well as 10,000 square foot Nobu restaurant.  Nobu CEO Trevor Horwell told ToNeTo Atlanta that his company has "looked at Atlanta for years" and that they were "in discussions" about a parcel in downtown Atlanta, but that the elements of what Simon plans to do at Phipps Plaza fit perfectly with the Nobu brand.  

The 150 room hotel is on par with other recent luxury hotels that have opened in metro Atlanta such as the Mandarin Oriental, with 127 rooms and the St. Regis, with 151 rooms.  Most Nobu hotels are about 150 rooms, with the properties in Caesars Palace, (180 rooms) and the upcoming Barcelona hotel, (240 rooms,) the brand's largest to date.  

In 2008, A Baccarat Hotel and Residences and 1 Hotel and Residences, both part of the Starwood Capital Group, were to be built as part of The Streets of Buckhead project.  Neither hotel ever came to fruition and the eventual project, Buckhead Atlanta The Shops Buckhead Atlanta, has struggled to attract customers to its uber luxe project.   

Nobu brings new star power to Phipps Plaza, as the founding Nobu investors include actor and director Robert De Niro, film producer Meir Teper, noted chef Nobu Matsuhisa and established New York restaurateur Drew Nieporent. DeNiro, who has spent plenty of time in metro Atlanta in recent years on film projects such as Dirty Grandpa, Last Vegas and the upcoming The War With Grandpa, was reportedly a driving force in bringing Nobu to Atlanta.  

The first Nobu Hotel, an extension of the popular Nobu Japanese restaurant, opened in an existing tower at Caesars Palace in Las Vegas in 2013.  There are currently seven Nobu Hotels globally, with an existing pipeline of nine more properties for the coming years.  Of the seven existing hotels, four are within the United States including the newly opened all suite "Nobu Ryokan Malibu," which  according to Horwell, generates the highest RevPAR (Revenue Per Available Room) [of any hotel] on the west coast. 
Nobu hotel and restaurant at Phipps Plaza
The inspiration for Nobu Hotels, Horwell says, came when Nobu opened what was then their second overall restaurant in the COMO Metropolitan London twenty years ago.  

A sixteen year veteran of Hyatt Hotels and nine year veteran of Hard Rock Hotels & Casinos, Horwell plans to grow Nobu slowly, with plans to have 30 hotels open by 2020 and a total of 50 over the next ten years.  

Nobu Atlanta will be a destination for locals and travelers alike according to Horwell.  He anticipates the hotel functioning as a "living room for locals," calling it a "gamechanger" for Buckhead.  

Horwell anticipates "standard" (is there really such a thing at Nobu hotels?) rooms to start at about $300+ per night at the Atlanta property.  A 5,000 square foot "presidential suite" atop the hotel will likely be far more expensive, although it was too early for the hotel to speculate on potential rates.  The hotel will also feature a rooftop pool and bar, as well as private "villas." 

According to Horwell, Nobu generates as much revenue per "seat" in the restaurant (planned for 150-200) as they do from each "room" in the hotel.  Although Horwell did not disclose a specific figure, this kind of statistic is one that most hotel operators could only dream of.  

Nobu restaurant, which features "new style" Japanese cuisine, faces stiff competition from established local favorites Tomo in The Ritz-Carlton Residence building, just north of Phipps Plaza, and Umi, just south of Phipps Plaza, adjacent to the St. Regis hotel.  Horwell said the company expects the Nobu restaurant to serve 800 to 1,000 guest checks a day.  

At 10,000 square feet, Nobu restaurant will be five times the size of Umi and more than double the size of Tomo, which is just under 4,000 square feet.  Umi also operates Himitsu, a lounge in a space adjacent to its restaurant, which is about 1,300 square feet.  

When ToNeTo Atlanta questioned Horwell about his existing Japanese cuisine neighbors, he seemed unconcerned, alluding to the concept that "if we build it, they will come."  Horwell, for what its worth, has been to Umi, saying it was "good," but was unfamiliar with Tomo, despite its close proximity to Phipps Plaza.  

Nobu Hotels are marketed in a way that puts them in competition with the likes of The Ritz-Carlton, Four Seasons and St. Regis, but Horwell sees Nobu as a "crossover brand," adding that his hotels "draw from other brands" and like many hotels, target millennials.  Nobu does not offer a rewards/loyalty program, but maintains significant data on its guests in an effort to both curate their experiences and personalize their stays as much as possible.  The Ritz-Carlton, (which ToNeTo Atlanta has previously reported is being deflagged this month in Buckhead), tracks guests' preferences, and also rewards guests via its Ritz Carlton Rewards program and its invitation only "Cobalt" membership.  

Horwell was adamant that service is what sets his hotels apart from others.  Unlike the Solis Two Porsche Drive, which opened earlier this month near Hartsfield-Jackson Atlanta International Airport without a dedicated concierge, Nobu Atlanta will have at least one concierge on staff to assist guests and create the most personalized experience possible.  Nobu hotels are consistently well rated on TripAdvisor, where their Miami Beach and Malibu properties are each currently ranked #2 in their respective markets.  

Perhaps most amazing was the revelation by Horwell that 40% of its employees have been with Nobu 10+ years, an astonishing feat given the reputation of the hospitality industry for high turnover.  Horwell anticipates the Nobu Hotel and restaurant to employ about 300.  

The Nobu Hotel rooms will feature toiletries from Spanish skincare provider Natura Bissé which the company also features in the hotel's planned "boutique" spa.  
The overall project 
The Atlanta Nobu hotel will be designed by esteemed architect David Rockwell of  New York's Rockwell Group.  The design firm, which specializes in the hospitality industry,  designed the first freestanding Nobu Restaurant, located at Doha's Four Seasons Hotel, as well as the Nobu's relocated restaurants in New York's FiDi (Financial Distict) neighborhood.  Although Rockwell Group has designed other hotels - Chicago's Virgin Hotels, The New York EDITION and Dream Hollywood in Los Angeles among them - the Atlanta Nobu would seem to be the first time the firm has worked with the hospitality company on a hotel/restaurant combination project.  

Chanhassen, Minnesota-based Life Time Athletic will also open a 90,000 square foot fitness facility as part of the mall's redevelopment project.  Life Time's Phipps Plaza location will be what the company refers to as a "Diamond Club," with assorted premium offerings and amenities not offered at many of their other locations.  The three-level facility will feature yoga and cycle classes, small group and personal training, a full-service LifeSpa, fast casual LifeCafe, Life Time Kids Academy and a rooftop pool, beach club and bistro.  The project also will incorporate Life Time Work, a subscription-based membership co-working program for individuals and small groups that provides work, meeting, collaboration and social spaces within Life Time Athletic. Life Time currently operates six clubs in Georgia, two of which - Sandy Springs and Peachtree Corners - are "Diamond Clubs."  

Buckhead is already a crowded fitness market with niche national facilities like Flywheel, Barry's Bootcamp and CorePower Yoga open, along with over a dozen local options such as SculptHouse, Witzlib Fitness Studio and Stellar Bodies, among others.  Buckhead is also home to two LA Fitness clubs, one across the street from Phipps Plaza and another less than a mile away at the corner of Peachtree and Piedmont Roads.  There has also been interest from at least one fitness operator in opening in the former Circuit City/hhgregg in nearby Buckhead Triangle.  

The project, which Simon President of Malls and Chief Administrative Officer John Rulli said represented a "significant capital investment," is easily the most dramatic change to Phipps Plaza since the early 90s.  In 1993,  $140 million was spent on an expansion and renovation that added Parisian as the mall's third anchor and also brought a third level to the mall, which created room for a 14 screen AMC Theatres and a food court.   In 1998, Simon Property Group acquired Corporate Property Investors who at the time owned Phipps Plaza, Lenox Square and a number of other properties.
The new office tower at Phipps Plaza
The redevelopment at Phipps Plaza will also include an approximately 300,000 square foot Class A office tower.  Office development in Buckhead has slowed in recent years and Simon sees an opportunity to provide new options.  The office tower will be targeted towards tech firms, financial services companies and other brands that crave luxury office space at the nexus of some of Atlanta’s best shopping and dining, said Patrick Peterman, Simon vice president of development and asset intensification.  “We think the demand is there for it and we think we have a really good product,” he said.   

The new office tower, fitness/food hall building and hotel and restaurant will surround a new green space that will be an amenity not only for the mall, but for the surrounding community as well.  

Simon has in recent years invested heavily in capital improvements at some of their most prized retail assets, of which Phipps Plaza (and Lenox Square) are included.  Last summer the new 166 room AC Hotel,  a partnership between Simon Atlanta based Noble Investment Group, opened at Phipps Plaza.  A new apartment complex, Domain at Phipps Plaza, also opened last year, bringing more than 300 apartments to the posh mall.   

At this morning's event, ToNeTo Atlanta had the pleasure of speaking with former Atlanta Mayor and current "mayor of Buckhead" Sam Massell, who today is President of the Buckhead Coalition.  Massell, 90, was as excited as anyone at the news.  "Buckhead continues to attract new and exciting businesses" said Massell, adding that he was told that Nobu would command "the highest nightly rates of any hotel in Atlanta."  If you know Sam, you know his love for Buckhead is never-ending, and today's announcement is sure to become another stat he'll use to promote Buckhead in the future.  

The Nobu hotel and restaurant, Life Time Athletic, office space and public area will be also be joined by a 30,000 square foot  food hall.  The hall, which will occupy the first two floors of the Life Time Athletic building, will feature "at least one full service restaurant," according to Rulli.  Simon has identified three operators, one of which it hopes to have a signed agreement with to manage and operate the food hall in the coming months.  The three prospective operators include a "Dallas [Texas] firm," chef/restaurateur Mike Isabella and Eataly, which currently operates a pair of food halls in New York and single units in Chicago, Los Angeles and Boston, among others.   
Genuine Pizza plans to open next month at Phipps Plaza
In addition to the new food components of Life Time, Nobu, and the food hall, Phipps has a number of restaurants already in the pipeline over the next twelve months or so.  Genuine Pizza from Miami celebrity chef Michael Schwartz is expected to open on the mall's first floor along Peachtree Road in late December.  Daniel Reed's Public Kitchen & Bar from Savannah's Daniel Reed Hospitality is also opening along Peachtree Road and is currently expected to open in January 2018.  

Ecco, part of Atlanta's Fifth Group Restaurants, is also joining the center with a freestanding two story restaurant near the corner of Wieuca and Peachtree Roads, next to the AC Hotel.  The restaurant, which was first announced in early 2016, has been delayed a few times and is now expected to open in summer 2018.  Grand Lux Cafe, a concept from the owners of The Cheesecake Factory, is also opening in Phipps Plaza.  The restaurant, which is essentially a slightly higher end version of The Cheesecake Factory, will open on the center's second floor in space previously occupied by home furnishings retailer Frontgate. (Frontgate recently relocated to a new space on the same floor, closer to Nordstrom.)  Grand Lux is expected to open in time for the 2018 holiday shopping season.      

The new projects, which will be integrated to the existing stores and infrastructure of Phipps Plaza, are expected begin construction in late 2018 with openings planned in phases throughout 2020. The project will not disrupt current mall operations or parking, Rulli said.  There will be a net gain of "minimal parking" according to a Simon source.   Horwell is hopeful that the Nobu portion of the project will open in late 2019, but knowing how slowly things tend to move in the City of Atlanta, that may be overly optimistic.   

City of Atlanta Fire Station Number 3, located below the Belk parking deck on Phipps Boulevard, will need to be relocated, and while a Simon spokesperson indicated they will remain on property, an exact location has not yet been determined.  
Fire Station #3 at Phipps Plaza will relocate elsewhere on mall property 
ToNeTo Atlanta pressed Rulli on when the remaining restaurant adjacent to Public Kitchen (in the former Twist space) would be announced, to which he responded "soon."  Rulli was a little more descriptive about what Simon has planned for the former Prime restaurant space at Lenox Square, saying the company is working on "something very cool" that will "transform the front of the mall," adding that news of the tenant/s should come in "six to eight months."  An apartment tower planned behind Lenox Square, near Bloomingdale's, was announced in 2013, but has been "indefinitely tabled."

Have you ever been to Nobu?  Are you excited about the changes planned for Phipps Plaza?  What types of eateries would you like to see open in the food hall component? 

Please share your thoughts below.  


atlducks said...

Please please let it be Eataly.

Anonymous said...

Surprised that Belk Phipps Plaza lasted as long as it did. Belk is a small town retailer outside of NC and imho the only true flagship store that works for them is SouthPark in Charlotte.

Ham said...

Agreed, not surprised that Belk closed. I walked through a few times, but don’t think I ever made a purchase. I did sort of like Parisians, but that seems like forever ago now. I like the idea of a food hall since the old food court was removed, so there may be some nice lunch offerings. However, I do wonder if the rest of the project is a little too ambitious. When you consider traffic and other existing facilities will or even can Buckhead support much more. I fear that every new opening no longer adds to the mix, but just cannibalizes someone else’s business. But, hey, that’s progress…

Anonymous said...

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Chips-A-Foye's Incredible Blog Spot said...

I have read every websites article on this information and I felt this was the most informative/well put together. Thank you.

Anonymous said...

Its time for Belk to go. Parisian fit into that mall well because it was a little more upscale and the service was excellent. Belk has not filled that void. This mall is being “demalled” all the time. I wonder how long Saks and Nordstrom will stick around.

Anonymous said...

I don't understand why Belk opened at Phipps anyhow, and they're also at The Galleria in Dallas, which is too far west for a store like Belk. I always thought Von Maur would be a better fit at Phipps (even though its a Midwestern Chain, its pretty upscale) than Belk is.

Anonymous said...

in 2006 Belk acquired the Parisian chain thus converting the Phipps Plaza store. The Galleria Dallas came about in 2014 when Saks vacated that store. Recall when May merged with Federated well over a decade ago, that began the closure of many legendary department stores. The stores that survived like then family owned Belk was one of the few chains left to fill the empty anchor stores.

One of the reasons malls are dying is because anchors pay the biggest rents and when they close it hurts the smaller retailers. Chain reaction. Bon Ton is closing 40 stores next year. There are many upscale department stores left to fill those anchors.

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