BUSINESS/ECONOMY

On time in Bloomington

D'ARCY JENISH January 19 1987
BUSINESS/ECONOMY

On time in Bloomington

D'ARCY JENISH January 19 1987

On time in Bloomington

The deadline was Jan. 2, and Edmonton’s Ghermezian brothers delivered. On that day Bloomington Port Authority officials confirmed that the Ghermezians, who own the 828-store West Edmonton Mall, could raise the money to build their next giant mall in the Minnesota city. The project: a five-million-square-foot, $500-million Fashion Mall of America ! and Fantasyland, matching West Edmonton Mall in size. The city also received a $2.5-million cheque, to secure the land on which the mall will be built. “I am obviously pleased to have twice as much of the Ghermezians’ money as before,” said Bloomington mayor James Lindau. “It gives me the assurance that we are on track.”

The Jan. 2 closing was an important milestone for the Iranian-born Ghermezian brothers—Eskandar, Raphael, Nader and Bahman—who launched a drive to duplicate their Edmonton mall in Bloomington in July, 1985 (Maclean’s, Dec. 22, 1986). The six-year-old West Edmonton Mall, the world’s biggest shopping centre, also contains five million square feet of retailing and entertainment space. If the Ghermezians can successfully repeat the format elsewhere, industry experts say, they could become the cutting edge that revolutionizes retail marketing.

The Bloomington deal was also crucial because it showed that the Ghermezians are capable of raising development funds that may allow them to repeat the concept elsewhere. Although the final details are not set, the

Fashion Mall of America is expected to contain 800 to 1,200 stores, with 700,000 square feet devoted to entertainment. The stores will be laid out in a figure-8 pattern, with amusement areas built inside the loops.

Lindau said he made sure that the brothers’ development firm, Triple Five Corp. Ltd. of Edmonton, was in solid financial shape before agreeing to release the mall site. During the negotiations, Bloomington officials and an independent auditor examined the firm’s financial records and spoke with the bankers proposing to back the project. For their part, to lure the brothers, Bloomington put together $60 million in concessions to service the mall and provide parking facilities.

While making its plans to build in Bloomington, the Ghermezians also proposed similar malls in Mississauga, Ont., and Niagara Falls, N.Y. Last fall New York state welcomed the brothers with $556 million in concessions, while the Ontario government rejected the brothers’ demands for $200 million in allowances that they wanted before they would build in the province. At the same time, a group of major Ontario developers lobbied against any concessions to the Ghermezians. They were relieved that the Ghermezians appeared to be concentrating on the Fashion Mall of America. But the indefatigable Ghermezians may still build another megamail in Canada.

D'ARCY JENISH

ANN WALMSLEY