By  on May 15, 2007

The Related Companies is using restaurants to set the tone and attract high-end retailers to CityNorth, a 144-acre mixed-use development under construction in northeast Phoenix. Related announced on Monday that five eateries have signed leases for the 293,000-square-foot High Street retail district, which is part of phase I.

Cameron Mitchell, based in Columbus, Ohio, will open an 8,500-square-foot seafood restaurant; Il Fornaio, based in Marin County, Calif., will unveil a 7,800-square-foot Italian restaurant; Daily Grill's 7,600-square-foot eatery will be devoted to the fresh cuisine it pioneered in Los Angeles; Phoenix-based Kona Grill will serve pan-Asian and Southwestern cuisine in 7,000 square feet, and the 6,300-square-foot Blue Martini Lounge of West Palm Beach, Fla., will offer martinis and tapas along with live entertainment.

Dining has become a signature of Related, which brought Thomas Keller's Per Se and Masayoshi Takayama's Masa — two of Manhattan's priciest restaurants — to the Shops at Columbus Circle in the Time Warner Center in Manhattan.

CityNorth has a signed letter of intent from Nordstrom, which will occupy one of four anchor slots. Macy's West is said to be close to an agreement, and Bloomingdale's, which kicked CityNorth's tires earlier this year, is described as "still interested," according to sources. It would be Bloomingdale's first store in Arizona.

Williams-Sonoma will have "a very significant presence" at the project, said Kenneth J. Himmel, chief executive officer of Related Urban Development, which is building CityNorth with the Thomas J. Klutznick Co. The Williams-Sonoma unit could be the first of a new retail concept.

Anchor tenants should be set over the next 60 days, Himmel said, adding that a W Hotel and Equinox health club are expected to open on High Street.

Neiman Marcus, which was eyeing CityNorth, has taken a step back. "In the next five years, Neiman Marcus and Saks Fifth Avenue will do second stores [in the Phoenix area] because there's so much wealth and growth," Himmel said. "For Neiman's, it's a matter of clarifying the time line in terms of when the market's growth will offset any cannibalization of their existing unit [at Fashion Square Mall in Scottsdale]. We have a master plan that will accommodate Neiman's in 2010 and 2011."Neiman's would anchor a luxury retail zone, he added. "The luxury tenants will be representative of [retailers from] Americana Manhasset in Manhasset, N.Y., to South Coast Plaza [in Costa Mesa, Calif.] and Bal Harbour [Fla.] Shops," Himmel said. "We're talking to Louis Vuitton and Gucci and we're getting very strong signals. Their distribution in Phoenix is not as deep as you might think."

The battle for retailers in the Scottsdale-Phoenix area is fierce, and no wonder. Phoenix-Mesa-Scottsdale is one of the five fastest-growing metro areas in the country, with more than four million people. The number of households with incomes of $200,000 or more almost doubled in the last five years in Maricopa County, which includes Phoenix and Scottsdale.

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