Prior to the Great Recession, developer Peter Bell’s 1,500-acre Pabst Farms development in Oconomowoc included plans for a 1 million-square-foot upscale regional shopping center, called the Pabst Farms Town Centre, northeast of I-94 and Highway 67.
Several components of the overall Pabst Farms project came together including: 150 single family homes, the Aurora Medical Center in Summit, two hotels, a 1 million-square-foot Roundy’s distribution center, and a neighborhood shopping center anchored by a Pick ‘n Save grocery store.
But plans for the upscale regional mall have not moved forward and most of the development at Pabst Farms ground to a halt during and after the Great Recession.
Chicago-based General Growth Properties Inc., one of the nation’s largest mall operators, was originally selected to develop the regional mall at Pabst Farms. But the company dropped out of the project in 2007. In 2009 General Growth filed for chapter 11 bankruptcy protection.
Beechwood, Ohio-based Developers Diversified Realty Corp., replaced General Growth, but it too was unable to move the Pabst Farms upscale regional mall forward. DDR dropped out of the project in 2012.
Now the Pabst Farms Town Centre is finally gaining momentum, with the recent announcement that the project will be anchored by a 151,000-square-foot Walmart Supercenter store and a 136,000-square-foot Sam’s Club store.
As large discount retail stores, Walmart and Sam’s Club do not fit the image of an upscale regional shopping center that was originally planned for the site. But Bell said that is still the goal for the Pabst Farms Town Centre.
“We remain committed to an upscale, regional shopping destination, and look forward to working with retailers like Walmart and Sam’s Club that are economically strong, weathered the recession, and are well-positioned to succeed in this new economic environment,” Bell said. “As consumer spending continues to bounce back, there is more optimism in the retail sector than there has been in years. With Walmart and Sam’s Club committed, we are now actively working on retailers and a movie theater to fill out the rest of the development.”
However, some observers doubt that the Pabst Farms regional mall will become the upscale regional shopping center that was originally envisioned, especially with Walmart and Sam’s Club as anchors.
“There is virtually no chance that this evolves into an upscale shopping center at this point,” said Cory Sovine, vice president of the retail group for Siegel-Gallagher.
“Obviously a lot has changed since (prior to the Great Recession),” said Peter Glaser, first vice president of the Milwaukee office of CBRE. “You have to let the market forces play out where the demand is. I don’t know that Milwaukee needs another regional mall right now.”
Sovine predicts the Pabst Farms Town Centre will still be a successful retail development, but one that serves the needs of area residents rather than becoming a regional draw.
“(The Pabst Farms retail development) is not going to blow the doors off of anything, but it will provide a needed service,” Sovine said. “It’s going to be a very successful project. Just because it’s not what their original vision was, that doesn’t mean it’s not going to be a successful project.”
The I-94 and Highway 67 interchange is desirable to retailers and should attract development similar to the I-94 and Highway 83 interchange in Delafield and the I-43 and Highway 60 interchange in Grafton, Glaser said.
According to marketing materials from Mid-America Real Estate-Wisconsin LLC, which is marketing the retail space for Pabst Farms, 100,000 people live within 10 miles of the site and the average annual household income within that radius is nearly $112,000. About 59,000 vehicles pass the site each day on I-94 and about 24,000 vehicles pass the site each day on Highway 67.
Yet despite those demographics, Oconomowoc’s position at the far western edge of the metro Milwaukee area may have prevented Pabst Farms from attracting the upscale tenants to create the regional mall that it had envisioned. The Marcus Corp.’s The Corners project in Brookfield has not broken ground yet, but it got a commitment from Davenport, Iowa-based upscale department store chain Von Maur. That was a major blow to the Pabst Farms project, Sovine said.
Also the commitment by Seattle-based Nordstrom to build a store at Mayfair Mall in Wauwatosa reaffirmed that mall as the region’s leading upscale shopping center.
The Pabst Farms upscale regional mall plan might have worked if it had come together prior to the Great Recession and General Growth’s financial problems, Sovine said. That combined with Von Maur’s commitment to The Corners has forced Pabst Farms to move in another direction, he said.
“You can’t dictate to the market what the property is going to look like,” Sovine said. “The market is going to tell you what it’s going to look like.”
The addition of big box discount stores like Walmart and Sam’s Club is not necessarily a bad fit for an upscale development like Pabst Farms, Glaser said.
“You see those types of retailers in upscale communities as well,” he said.
Construction for the Pabst Farms Town Centre is expected to begin later this year. No date has been set for the construction of the Walmart and Sam’s Club stores. Plans for the stores must still be approved by the Oconomowoc Common Council.
“The city is excited to see the long anticipated Town Centre project at Pabst Farms get under way,” said Bob Duffy, economic development director for Oconomowoc. “The new Walmart and Sam’s Club will not only provide approximately 400 new jobs, but since the Pabst Farms tax incremental (TIF) district is in the process of closing early, this will mean a substantial direct increase in Oconomowoc’s tax base from day one.”