3401 Walnut troubles won't hit Sansom shops, U. says

The new project should be able to avoid the problems the Shoppes at Penn had. Although Mad 4 Mex has seen a boom in business since its recent opening in the 3401 Walnut Street complex, the three years it took for the University to bring a restaurant to the former Italian Bistro spot highlight what many area retailers see as a continuing inability to retain businesses within the Shoppes at Penn. But although several businesses -- including Tuscany Cafe, Sam Goody, Quantum Books, The Lodge, Perfect Pretzel and two movie theaters -- have left the complex in recent years, University officials are confident that they will be able to maintain a consistent level of retail in the new Sansom Common project. Managing Director of Real Estate Tom Lussenhop explained that the retail spaces in Sansom Common will be larger than those in the 3401 Walnut Street complex, allowing the University to attract new "larger and more upscale" businesses. Most of the complex's retail spaces are approximately 400 square feet, while the new Sansom Common spaces will be approximately 5,000 square feet each -- an increase of over 1,200 percent. Additionally, the University is in a "position of total control over the tenant mix, the economics and occupancy terms of the individual tenants [of Sansom Common]" because it is the equity owner of the entire project. Although the University obtained leasing rights over the 3401 Walnut Street complex last year, when the space was developed between eight and 10 years ago, a private company with a different set of "expectations" controlled its retail mix, Lussenhop said. "The University is in a position of control of Sansom Common to the extent that the broader objective of exciting retail in the University community can be pursued in a direct way rather than via the intermediary of a third party who has its own objectives," he added. Lussenhop said the University's control over the Sansom Common project will allow it to prevent the types of problems which have marred the Shoppes at Penn complex -- where many current retailers complain that business is often poor, particularly over vacation periods -- since its creation. "It's been very tough for me to stay in business at 3401, but I don't need a lot of money and I like working with the students so I stay here," said Chris Anastasiou, manager of Eyeglass Encounters. "Over the summer and over vacations business is slow, and in general, the rents are high," he added. Foot Locker Manager Terrell Stinson described his store's business at the 3401 Walnut Street complex location as "mediocre," adding that the location "is not necessarily a bust, but it will never be a booming retail area." But University City Realty General Manager John Greenwood -- who manages the complex --Esaid he "would not refer to the Shoppes at Penn as a bust," and stressed that it is not unusual for the original tenant group of an area to evolve into a more "appropriate tenant mix." Lussenhop agreed that the need to change stores is fairly common in retail complexes, and said that although some retailers do well in the 3401 Walnut Street complex, others "typically" do not. Although some 3401 Walnut Street complex retailers complained that vacancies in the space caused their rents to rise, Greenwood stressed that since every tenant has a different lease, not all rents increase as a result of vacancies. "In certain circumstances, some tenants will pay higher occupancy costs due to vacancy, but that is very typical to some retail areas and traditional shopping areas," he said. For now, the Shoppes at Penn still has a vacant storefront in the former Sam Goody home, but Greenwood said the University has "more prospects than it has space." Shoppes at Penn tenants said Sansom Common will not compete with the existing complex, but will help to create what Greenwood described as "bigger critical mass in retail, and a destination similar to a mall." University of Cards Manager Christine Kern, for example, said that although she fears the Barnes & Noble University Bookstore -- scheduled to open in July 1998 -- may compete with her store, the Sansom Common project will "provide an attraction, and it will be fun to have more people around."

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