J.C. Penney plans S. Austin store
Retailer is in talks with Southpark Meadows developer to lease 99,000 square feet.
By Kate Miller Morton

AMERICAN-STATESMAN STAFF
Wednesday, June 29, 2005

Department store company J.C. Penney Co. Inc. is in negotiations to become an anchor tenant at Southpark Meadows, a 425-acre retail and residential development at Interstate 35 and Slaughter Lane. Penney is in discussions with Southpark developer Endeavor Real Estate Group to lease approximately 99,000 square feet in the northern portion of the retail center, west of a new Wal-Mart Supercenter.

Endeavor principal Chris Ellis said he expects to reach agreement by the end of August. Officials at Penney would not comment.

The Plano-based retailer would be the second-largest confirmed tenant at Southpark Meadows, smaller only than Wal-Mart, which recently opened a 206,600-square-foot store.

Southpark Meadows eventually will have 1.6 million square feet of retail, comparable with other retail hubs in Austin including Parmer Lane at Interstate 35 in North Austin and FM 1325 at I-35 in Round Rock.

The project is significant for South Austin, which has been largely ignored by major retailers despite significant residential growth on both sides of the Hays-Travis county line.

Southpark Meadows will contribute to the trend, adding more than 1,000 single-family houses, town houses and apartment units.

J.C. Penney traditionally has served as an anchor for enclosed malls and already has stores in the Austin area at Highland Mall, Barton Creek Square and Lakeline Mall.

The company began opening stand-alone stores two years ago as a way to accelerate growth and reduce costs.

"We wanted to open up new stores, and there really are not too many malls being opened any more," Penney spokeswoman Brenda Romero said. "It's also less expensive for us to build off-mall stores, and we find that customers really like that convenience of being able to go shopping at J.C. Penney without having to park at the mall parking lot and having to deal with all the traffic that comes along with going shopping at the mall."

The department store chain now has 12 stand-alone stores and plans to open 75 to 100 over the next few years.

The new stores average 95,000 square feet, less than half the size of the chain's 250,000-square-foot mall locations. With less office and storage space, the stand-alone stores are more efficient and have wider aisles, centralized customer service and expanded home furnishing and jewelry departments.

J.C. Penney would join a retail roster that includes Rooms to Go, Hobby Lobby, Ashley Furniture, Circuit City, Bed Bath and Beyond, Office Max and JoAnn Etc., a fabric and crafts store.

T.G.I. Friday's, Chick-fil-A and Johnny Carino's are also on board, and Waterloo Ice House and Mama Fu's have signed letters of intent.

Endeavor continues to negotiate with several movie theater companies, and Ellis said he was "cautiously optimistic."

The retail buildings will be built in three phases. The first part includes Wal-Mart and Petsmart and is already open.

Endeavor recently began construction on the second and third phases and expects retailers to begin moving in by May.

Ellis said the project has benefited from the lack of retail opportunities in the area, despite a large population south of the Colorado River.

Austin developer Terry Mitchell has announced plans for a 760-acre, 3,500-home subdivision on the eastern end of Slaughter Lane just north of the Hays-Travis County line. Farther south, Kyle and Buda have approved the construction of thousands of new houses.

"Retailers have neglected South Austin, and they see this as an opportunity to really have a presence in South Austin in a project with 1.6 million square feet of retail where they can all congregate together," Ellis said. Southpark Meadows will add a sizable number of new South Austinites when the 149-acre residential portion of the project is complete.

Endeavor recently agreed to sell nearly 50 acres east of South First Street to Fairfield Residential LLC, which is building a 250-unit, 13-story condominium project at the foot of Rainey Street.

At Southpark, Fairfield plans to build two apartment complexes near Slaughter Creek. One complex will have more than 400 units and the other will have approximately 200.

Endeavor also is close to selecting a home builder for the 85-acre single-family portion of the project on the site's northwestern edge where 400 to 500 houses will be built.

Endeavor also will sell 15 acres south of the single-family site where 100 to 200 town houses will go.

kmorton@statesman.com; 445-3641