California firm buys part of outlet center|[6/02/05]

Published 12:00 am Thursday, June 2, 2005

Plans for expansion at Vicksburg’s factory outlet shopping center got a boost Wednesday with the sale of the center’s managing interest to a California outlet developer.

Craig Realty Group of Newport Beach, Calif., is the new principal owner of Vicksburg Factory Outlets, 4000 S. Frontage Road, succeeding an Alabama man, John T. Huff Jr., and Huff LLC, said the property’s general manager, Margaret Gilmer.

“It’s to help the mall grow larger,” Gilmer said of the deal.

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Craig’s Web site says the company owns, manages or has under development 10 properties, including four in California and one each in Portland, Ore.; Conroe, Texas; Brescia, Italy; and New Jersey. Huff, by contrast, owned only one center, Gilmer said.

“The exciting thing for us is that it’s somebody that’s been in the industry,” Gilmer said. The company was founded by Steven L. Craig in 1995.

The sale was of about a one-third ownership interest in and the top decision-making partnership for the property, Gilmer said. The remaining interests in the property are owned by 46 local investors, whose approval of the deal was required and was obtained, Gilmer added.

VFO has space for 30 stores with all but one space full and about three prospective tenants, Gilmer said, adding that demand for its space among retail outlets has remained strong.

The property opened in 1995 with about 115,000 square feet of retail space and has planned since about 2003 to add to that area an additional 80,000 square feet. The plan received financial backing from the city and county in the form of approval for up to $1.1 million in tax-increment financing.

It hit a snag, though, in late 2004, when slow growth in the retail industry resulted in an insufficient number of commitments from prospective tenants of the expansion.

“We are extremely pleased to have Craig Realty Group consider an association with this center and this area,” Gilmer wrote in a letter to the center’s investors requesting their approval for the deal.

“The group is a leader in the development of upscale factory-outlet shopping centers. The company’s portfolio of properties are known for their quality branded merchandise and their architecturally themed environment,” she said.

Craig learned of the VFO through trade shows management of both attended and the transaction, Gilmer said. He became impressed with Vicksburg’s direction and the transaction had been in the works since October, Gilmer said.

“What he saw in the last four years was a commercially viable location for larger centers,” Gilmer said of Craig, who was not available.

No personnel changes among VFO’s current staff are expected, Gilmer said.

About 250 to 275 people work at VFO stores, whose average sales are about $20 million to $22 million a year.

Surveys have shown about 39 percent of the center’s customers live in Warren County, about 37 percent elsewhere in Mississippi and about 24 percent outside the state.