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Americana Manhasset Builds a Bigger Footprint

Despite the soft economy, Americana Manhasset’s current expansion is part of an ongoing strategy to pump up its luxury appeal.

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NEW YORK — Counter-intuitive? Not so, according to the Americana Manhasset. Despite the soft economy, the shopping center’s current expansion is simply part of an ongoing strategy to pump up its luxury appeal.

The Long Island shopping center, a rarity on the suburban retail landscape with its high concentration of chic designer shops, urbane architecture and independent attitude, will extend its classic limestone facades and array of top European and American labels. Total space at the Americana Manhasset, after the project is completed this fall, will be 220,000 square feet.

While Americana Manhasset executives declined to discuss the cost of the project, real estate sources said such an expansion would cost in the range of $30 million to $40 million.

“This is the single largest change that we’ve ever made at one time,” stated Frank Castagna, partner of Castagna Realty Co. Inc., developer of the center. “We’ve been planning on this for at least 10 to 12 years.”

During an exclusive interview about the long-awaited expansion, designated Section IV, Castagna explained that the 29,000-square-foot Waldbaum’s at the center’s eastern end always resisted vacating, even though from the center’s perspective it was practically an eyesore. The food retailer’s apples and oranges just didn’t match up with the silk-screened Hermès scarves.

But Waldbaum’s lease expired last year, the building was razed and another 11,000 square feet of retail and restaurant space was torn down, setting in motion a 40,000-square-foot expansion/renovation project. The objective is to create real upscale harmony and do what hardly any other shopping centers do — cast an image of elegance.

For several designers already housed in the center, the expansion means relocating to larger shops, enabling them to show their collections the way they want to — in full. For example, Louis Vuitton will open a 5,000-square-foot “global” shop, while Brooks Brothers is taking a 12,750-square-foot, two-level space. St. John is moving to a 5,000-square-foot space, and Coach is taking 2,700 square feet.

Also, Gucci, which formerly had a small boutique inside the 8,100-square-foot Hirshleifer’s, the family-owned specialty store mainstay in the Americana that offers a variety of designer labels, is creating a 6,000-square-foot store of its own.

In a few other cases, the project provides space for newcomers, such as Yves Saint Laurent, which is creating a 2,400-square-foot-shop, and Bottega Veneta, which is building a 1,553-square-foot shop.

Filling in some of the space created by those moving into Section IV from elsewhere in the center, Christian Dior is planning to open a 2,700-square-foot shop in August, and Burberry plans to expand to 5,000 square feet from its current 2,900 square feet. The Burberry expansion should be ready to receive customers in late spring of 2004.

Recently, two other high-end businesses moved in near Section IV. Salvatore Ferragamo opened a 3,755-square-foot shop and a 2,700-square-foot Payard Patisserie & Bistro opened last June.

For the Americana Manhasset, Section IV is just the latest phase in what’s been an active process at the center of relocating tenants and finding new ones. There’s rarely a time when the center isn’t fully leased, and the designers, according to Castagna, sign 10- to 15-year leases. “Any top-flight tenant is not about to take a five-year lease,” he said.

Even though luxury sales have been on the soft side since before Sept.11, 2001, Americana Manhasset’s mission remains clear — to sharpen its luxe appeal and secure its unique positioning. It’s a privately owned property, covering 16 acres, and among the most productive shopping centers in the country, hitting $950 in sales per square foot last year, or $200 million in total sales, give or take $10 million in recent years.

The center anticipates sales per square foot rising to about $1,025 later this year or in 2004 after all of Section IV’s occupants are open. By comparison, mainstream malls and shopping centers average around $250 to $350 in sales per square foot, depending on the mix of stores and location.

Asked about the center’s recent performance, Castagna replied, “Business is good. We’ve been surprised. All the retailers saw the downturn coming before 9/11. However, the fact that we don’t depend on tourists is why we have stayed stable. We’ll follow a recession,” he acknowledged, though he added, “We just don’t go down into the pits. We enter the recession last — and we get out first.”

With all the consolidation and mergers occurring in the world of shopping centers, the Americana Manhasset, a prime property, could easily be sold. However, Castagna, who is a co-partner in the real estate company along with members of his family, said he has every intention of holding on to what he considers his crown jewel and a work always in progress. “We’re not for sale,” he said.

While he is very involved in finding new tenants, even traveling to Europe to learn about emerging brands and to attend fashion shows, John J. Gutleber serves as president and chief executive officer, making sure the Americana runs smoothly. Diedre Costa Major serves as senior vice president and creative director, and Andrea Sanders is vice president and director of branding and communications.

When the Americana Manhasset debuted in October 1956, it was a typical strip center, with a drive-through bank, a Chinese restaurant and, overall, a lower grade of retail, with such tenants as Lerner’s and Bakers Shoes. Castagna Realty still has some conventional holdings, such as the moderate-priced, family-oriented Wheatley Plaza, in Greenvale, N.Y., and two residential developments, Rock Rim Pond in Pound Ridge, N.Y., and Brady Brook Falls in Pawling, N.Y. It also has commercial property in Garden City, N.Y.

However, Castagna has maintained a different vision for the Americana Manhasset for more than 20 years, evolving it into a rare breed in retailing that includes Bal Harbour Shops in Miami, The Atrium at Chestnut Hill near Boston, and Highland Park Village in Dallas. And Americana Manhasset occasionally gets compared to South Coast Plaza in Costa Mesa, Calif., as well, which is also independently owned and, like the Americana, has a very hands-on owner/management, and an upscale lineup of designer shops. However, it’s a regional megamall, with multiple anchors and sections serving up different price points.

On the other hand, the smaller Americana Manhasset, a peanut in comparison to South Coast Plaza and other such regional centers, has intimacy, which few centers can boast, especially because there are no anchor department stores and it’s open-air. The result is often described as the Madison Avenue of suburbia. Moreover, the center is elegantly landscaped by the world-renowned landscape architects Oehme, van Sweden & Associates. Castagna says over $360,000 is spent annually on flowers alone, and more is spent on keeping up the ornamental grasses and perennials, creating a meadow around the center’s perimeter. Near the stores, there’s a more manicured look with ground covers and annuals.

The master plan was devised by store designer Peter Marino roughly two decades ago. His association with the Americana Manhasset has continued through the years, right up to the current expansion. Best known for creating retail spaces like Barneys New York on Madison Avenue, Marino was hardly gung ho to work for Castagna at first, and copped an attitude of his own. “Peter told me, “I don’t do shopping centers,” Castagna recalled.

However, Castagna, who is known for his patience and reserved, methodical manner, continued to pitch the Americana Manhasset and eroded Marino’s resistance. “Peter didn’t say a lot, but he was a good listener, and he finally agreed.”

With Marino’s master plan establishing a contemporary, clean look for the center, limitations have been put on such things as graphics and lighting, and Marino’s approval of everybody’s facade is required. “The tenants are happy to comply, but we would never do anything that would hurt their brands,” Castagna said. The restrictions are flexible enough so that designers can put their signature stamps on their stores and how they look, while there’s continuity in the architecture through the center. Louis Vuitton, for example, will be practically a glass box, yet it will have a limestone roof. Yves Saint Laurent will have a black frame broken up by limestone sections and big glass windows.

While the Americana lineup of 42 stores does include Gap and Talbots, these moderate, value-minded businesses are a small minority and getting smaller. There are also some tenants in the bridge and better-price point zones, such as Ann Taylor, Dana Buchman and Banana Republic, and Ellen Tracy will be moving in this year. Still, the lineup overall is 85 percent true designer, with such brands as Ralph Lauren, Fendi and Barneys New York, and the customer base truly has money. The center’s customer has an average household income of $155,000, and a median home value of $1.25 million.

But as Castagna sees it, it’s not the smell of wealth that makes the initial impression. It’s the smell of the flowers, which is perfectly fine by him.

“The first thing people say is, ‘Don’t you love the flowers?’” observed Castagna. “I think of flowers as fashion.”

The center is located along a 1,469-foot stretch at 2110 Northern Boulevard, by the intersection of Searingtown Road in monied Manhasset. Shoppers come primarily from several other wealthy Long Island towns, such as Great Neck, Sands Point, Roslyn, Brookville and Locust Valley, though the Americana Manhasset draws as far west as Manhattan, east to Oyster Bay in Nassau County, and north to south, from the Long Island Sound to Garden City.

Aside from a few designer shops situated on some of Long Island’s fancier main streets and a few situated in the Roosevelt Field Shopping Center in Garden City, the Americana Manhasset faces little competition. “Our strongest competitor is New York City,” Castagna said.

However, there could one day be stiffer competition, so Castagna feels there’s no better time than the present to strengthen the business. Taubman Centers, which has a portfolio of high-end malls, is seeking to build one in Oyster Bay on Long Island, where Neiman Marcus wants to open a store. But that project has for several years been stalled by politics and local opposition for traffic and environmental reasons. The situation is not about to be resolved soon, since Taubman is battling a takeover attempt by Simon Properties, the nation’s largest shopping center developer and operator.

While that situation may always be in the back of Castagna’s mind, he hasn’t let up on the remerchandising effort. It’s intensified since 1996, with, among other brands, Escada, Escada Sport, Prada, Max Mara, Emporio Armani, Wolford Hosiery, Rizzoli, London Jewelers and the nation’s first freestanding Estée Lauder Salon & Spa locating in the center since then.

Castagna and his team see the constant tweaking of Americana as similar to working over a very high-end department store. There are similarities, considering the limited amount of space that’s available to work with and the politics of dealing with the always-demanding designer crowd. As Castagna explained, it’s an ongoing, delicate process, involving renegotiating leases, and waiting for leases to expire.

“Section IV opens up a whole new avenue, a whole new perspective, but it doesn’t end here,” Castagna said. “We’re always anticipating changes as new trends and new designers arise.”

The remerchandising process, he said, is “like a perpetual chess game, of moving the pieces, but in some ways it’s simpler. That’s because we’ve become more focused.

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