Silverthorne partners with Outlets in redevelopment of town core
The Levi’s in the Outlets at Silverthorne is the lone survivor in a ghost town of empty storefronts in the northern part of the Green Village. The store sits on the corner, and its customers can look down a row of dark and unadorned windows. The parking lot is empty, except for the quickly piling snow and a single Outlet security car.
Although the Outlets remain a sales tax revenue juggernaut for the town, the Great Recession and the rise of e-commerce has struck a blow to a business model that had thrived for decades. Year over year, sales have decreased for the retail center, as have occupancy rates.
However, the apparent evacuation of the Green Village is part of a bigger, intentional plan for the Outlets.
Jayne Esser, the general manager of the Outlets at Silverthorne, said that part of the reason stores began to initially shut down in the Green Village was partially due to a selection of stores that didn’t make sense together. After the Old Navy closed in 2011, the company began to deliberately shut down the area, in the hopes of laying the ground work for a new future working with the town. The town of Silverthorne has started on long term plans to create a New Urbanist, pedestrian-friendly town core. Ryan Hyland, the town manager of Silverthorne, said that the town’s plan is to add residential structures to the area between Rainbow Road and Blue River Parkway.
“We’re in a prime location to assist the town with that vision and that need,” Esser said.
THE RISE OF A retail giant
The Outlets started nearly 30 years ago as a retail powerhouse. Stores welcomed their first customers in 1989. A second and third building were added, and all three villages were open by 1994. The town’s budget for 2015 and 2016 said that there are 130 retail spaces in Silverthorne. Currently, Esser said that the mall has 67 stores and comprises roughly six acres of retail space. Craig Realty Group, an outlet development company, owns the Silverthorne location, as well as 13 other outlet centers around the country, Esser said.
The shops and businesses in the Outlets rise and fall on the health of the economy, and less than 10 years after the final village opened, the company had its lowest occupancy rate at 75 percent. The Outlets were renovated in the hopes of modernizing and drawing in more customers. The project was finished in 2008, just in time for the recession to hit.
As Colorado began recovering from the economic blow, Silverthorne generally saw an increase of 25 percent in retail sales from 2010-14. But for the Outlets, it was a different story. Although the Outlets still brings in an average of 28 percent of the town’s sales tax revenues, the total amount has been steadily going down over the past four years.
Nationally, outlet malls struggle to hold stores. A 2015 “State of the Outlet” report by the International Council of Shopping Centers said that there were 215 outlets in North America, but that over a 45 year history, the industry had opened 455. If an outlet has a less than 50 percent occupancy rate, the council removes it from the list.
In 2012, sales tax revenue was more than $2.8 million. Revenue began decreasing by around $100,000 every year after that. Silverthorne revenue administrator Kathy Marshall said that taxes collected from the Outlets in 2015 were more than $2.5 million, but saw a decrease of 3.76 percent from 2014. The most recent sales tax report from Silverthorne has revenue through September 2016. The year-to-date numbers showed that the Outlets was more than $124,000 behind the same time in 2015, and accounted for 23 percent of the total revenue for the town.
Although the Outlets has seen revenue numbers fall, it is still one of the town’s financial pillars, with annual revenue hitting more than $2 million. During peak season the stores employ around 800 people, making it one of the largest employers in the town.
RECREATING THE WHEEL
The Outlets is still attempting to bring in more business. Esser said that recently the company has tried to place stores in more strategic locations next to similar stores to help boost sales. Because of this, many of the tenants have chosen to expand their stores. The decreasing shoulder season is also more appealing to tenants looking at leasing retail space.
“As leases are coming up, we are looking to help the tenants find better spaces, maybe more marketable for them to neighbor with, businesses that are similar, that attract the same audience,” Esser said.
She added that the strategy is to cater to locals as well as tourists.
“The long term and the permanent residents are just as important to us as the destination travelers,” Esser said.
The Outlets also started to look at bringing in different kinds of tenants to the retail spaces. The town recently began construction on a performing arts complex that will eventually house the Lake Dillon Theatre Company. While the building is under construction, the theatre group is holding performances in a space at the Outlets.
Craig Realty is working with the town to redevelop the Green Village area. The company’s CEO, Steve Craig, will meet with staff from both the Outlets and the town later this month to discuss that land and future projects with the town.
Hyland said the realty company supports the town’s goal of bringing in more residential space in the area between the Blue River and Rainbow Drive. The company previously partnered with Silverthorne in 2014 to buy a .5 acre piece of land on Blue River Parkway by the Interstate 70 ramps as part of future development plans.
Strengthening the town core will help to bring more people to Silverthorne, which could benefit the Outlets as well.
“The more successful we can be downtown, the more successful they are,” Hyland said. “The more folks we have in that region, the more vibrant it is.”
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