North American Development Group

A reputation for innovationKeith Regan learns how North American Development GroupÔÇÖs comfort level with more complex projects has helped it add some innovative developments to its portfolio. North American Development Group (NADG) has been in the business of developing retail centers for more than 30 years and over that time has had a hand in developing, redeveloping or acquiring some 17 million square feet of retail and related space.  Based in Markham, Ontario, the company moved into the United States in the late 1980s, first building and acquiring projects in Florida and more recently expanding into markets in Texas, Arizona and Colorado. Though the companyÔÇÖs focus remains squarely on its historic expertise in retail development, the types of projects it is now taking onÔÇöas demonstrated by two projects now under way in two different Canadian provincesÔÇöare increasingly complex and ambitious. ÔÇ£WeÔÇÖre doing more land planning than in the past,ÔÇØ says Glenn Munro, the companyÔÇÖs managing director for Eastern Canada. In many cases, he notes, it makes financial sense to purchase not only the land for a retail development but also the property around it, which can give the developers control over what happens there. ÔÇ£Often, itÔÇÖs not that much more expensive to the developer, and if you can find the right partner, it can make for a better project.ÔÇØNADG has also found itself working on more brownfields projects, building its malls and lifestyle centers on once contaminated sites. ÔÇ£WeÔÇÖre getting more comfortable with it,ÔÇØ Munro says, though the company is careful in selecting such sites. ÔÇ£ItÔÇÖs a question of understanding the risk, but itÔÇÖs also a function of the fact that in a lot of cases, these sites are good dirt from a retail perspective. They may be polluted, but they also may be located at Main and Main, in the right type of setting for retail expansion.ÔÇØ Such sites often already have infrastructure in place as a result of their historic uses, with sewer, stormwater and sometimes highway access already in place, a factor that can substantially reduce up-front development costs. Such was the case at Faubourg Boisbriand, a 232-acre site north of Montreal, a former General Motors assembly plantÔÇöwhere Camaros and Firebirds were assembled for the Canadian marketÔÇöthat was cleaned up by the automaker before it was sold to The Cherokee Fund. Cherokee is developing a residential and industrial/office component on the property and brought both NADG and Kimco Realty aboard as partners. NADGÔÇÖs part of the project will eventually include some 1.1 million square feet of retail, restaurant and service space, with medium to big-box retailers such as Zellers and Costco on board along with slightly smaller retailers such as Future Shop and Golftown, regional retailers and service retailer players. Several restaurants are already in place. The first phase of the lifestyle retail part of the project will open in April, anchored by several restaurants. NADG has found in working with its retail partners that retailers want a balance between a ÔÇ£downtownÔÇØ experience, which is gaining favor in lifestyle projects in the US, and the need to offer customers adequate parking near stores and restaurants. ÔÇ£What weÔÇÖre finding is that there is interest from retailers in that lifestyle concept, but they want it to have more parking adjacent to the stores,ÔÇØ Munro says, noting that the tweaks to the parking plan were one of the few modifications NADG has made to CherokeeÔÇÖs original master plan for the property. Other parts of the project include a hotel, with an agreement recently reached, and an ice rink complex that will be equipped for high-level hockey training. The regional transit authority is also studying the viability of extending commuter rail service to the property, which has existing train tracks. Further East, NADG is involved in a similar project in Halifax, Nova Scotia, where it is the main developer of a 500-acre site. Dartmouth Crossing, as the $250 million project is known, is on the site of a former quarry, and it not only posed environmental challenges but topographical ones as well, with a significant grade change across the property as elevations rise from 60 feet above sea level at the lowest point to 230 feet at the highest. The project has seen NADG work closely with provincial and local governments and with special interest groups to make the project as much of a win-win for all involved as possible. For instance, the developer cleaned up two brooks on the property that had been altered by the quarrying work, reclaiming one to make it the centerpiece of a retail village and rehabbing a second that had been damaged by blasting over the years into an active trout-spawning habitat complete with fish ladders. The project also includes extensive parklands focused around the waterways and the integration of walkways and bike paths that connect the new project to existing neighborhoods on the other side of Bayers Lake. Dartmouth Crossing has attracted some of North AmericaÔÇÖs largest retailers, including Wal-Mart, Home Depot, Costco and Canadian Tire. The Wal-Mart built on the site embraced the ecological part of the project, working with designers to create a system to enable water to be piped directly from the buildingÔÇÖs roof into the stormwater ponds that in turn feed the new trout habitat. The mall has also drawn more interest from restaurants than it can accommodate. ÔÇ£We believed heading into the project, and itÔÇÖs been shown by the interest in leasing, that there was real demand in the area for a center like this one,ÔÇØ Munro says. NADGÔÇÖs long-range plans for the property also include another office and industrial park overlooking the lake that would have as much as 750,000 square feet of space and would be built with green in mind, including a possible LEED certification for the overall park. A medium-density residential component is also on the drawing board. NADG has also brought a partner on an earlier projectÔÇöa retail complex south of MontrealÔÇöas a financial backer on the Dartmouth Crossing project as well. Canadian REIT, or CREIT, bought a stake in the new project even before it was completed, Munro says.As it unfolds, meanwhile, the project is being built with the long term in mind. ÔÇ£WeÔÇÖre viewing the Dartmouth project as a long-term hold, and with that in mind, you spend a few extra dollars up front, because you plan to be there in the future when the leases expire.ÔÇØ ┬á