Phipps Plaza, Atlanta’s shopping playground for the upper crust, is about to undergo yet another transformation as the owners of the Buckhead mall attempt to re-energize the space with a new luxury hotel, restaurants, an office tower and fitness complex.
The project, which Simon President of Malls and Chief Administrative Officer John Rulli said is “probably north” of $200 million, is likely the most dramatic single addition to Phipps Plaza since the 1990s brought a complete overhaul and third anchor store to the posh shopping center.
The new projects are expected to open in phases throughout 2020. The project will not disrupt mall operations, Rulli said.
The Nobu hotel and restaurant are clearly the headliners. Nobu is a luxury boutique hotel and dining brand whose Japanese fusion restaurants have won acclaim worldwide. The brand brings new star power to Phipps, as the founding Nobu investors include actor and director Robert De Niro, film producer Meir Teper, renowned chef Nobu Matsuhisa and well-known New York restaurateur Drew Nieporent.
Rulli said the latest additions to Phipps build upon a plan in the works for more than 10 years for the mall to evolve into a mixed-use development and entertainment center. That plan came in response to other planned luxury shopping rivals such as the pre-recession Streets of Buckhead project, which after the recession became the Shoppes at Buckhead Atlanta at East Paces Ferry and Peachtree roads.
“The vision is to change Phipps into the luxury destination of choice in the Southeast,” Rulli said.
In recent years, a development team acquired land to build the Phipps Tower office project that’s now home to corporate offices of children’s apparel maker Carter’s, among others. Simon also brought in partners to build a new AC Hotel, more than 300 luxury apartments and the Legoland Discovery Center.
Phipps and its sister mall Lenox Square put Buckhead on the international shopping map, and Simon has invested heavily in both properties to ensure their statuses as fortress retail meccas. Retail has undergone a seismic shift amid the rise of e-commerce behemoths such as Amazon and from a consumer base that has gravitated toward luxury and “experiential” shopping and dining.
Rulli said the idea is turn an enclosed mall into a shopping destination that meets the street.
“Let’s turn Phipps inside out and create a Fifth Avenue streetscape,” Rulli said. “All of these incremental moves are tied to this grander vision.”
The bulk of the new development will take place on what is currently the site of the Belk store on the north end of the mall. The Belk store, which replaced the former Parisian anchor store in 2006, will close next summer, Belk spokesman Andy Izquierdo told the AJC.
Izquierdo said employees were notified Monday of the store’s closure. Employees will be able to transfer to other stores if they desire, he said. Belk has about 20 metro Atlanta locations.
Belk currently does not have a plan to replace the Buckhead store, but Izquierdo said “we’re always open to looking for new locations that make sense.”
The evolution of Phipps follows other mall redevelopment by Simon and other majorplayers in recent years. Mall owners have spent billions in recent years adding entertainment venues, fine dining and other attractions to maintain the stream of customers.
In many ways, Phipps has been on the vanguard of this effort.
In the wake of the recession, Simon recruited the Legoland attraction and AMC renovated its theater into a limited, luxury-seating layout. Simon also added fine dining such as the Davio’s Italian steakhouse concept, and with partners used undeveloped land on its campus to build the Domain luxury apartments and the Euro-style AC Hotel by Marriott.
“We look at every asset and we ask ourselves what does this asset need and want to be,” Rulli said. “That’s how we come up with a vision and a strategy for what we want to create. It’s not about changing the mall but creating a product for where the market is today.”
Buckhead office space has gotten very tight with little in the way of new development in the offing. That’s a change from the last economic expansion that left Buckhead with several new high-end towers all jockeying for tenants amid the downturn.
The office tower, which will total nearly 300,000 square feet, will be targeted at tech firms, financial services companies and other brands that crave luxury office space at the nexus of some of Atlanta’s best shopping and dining, said Patrick Peterman, Simon vice president of development and asset intensification.
“We think the demand is there for it and we think we have a really good product,” he said. “That should allow us to compete.”
In Nobu, Phipps will boast what is likely to be one of the most expensive hotels in the city as well as a high-end Japanese restaurant that in New York and other global cities is a major attraction for celebrities and other high-profile guests.
The Nobu concept pairs high-luxury, high-touch service hotels with active dining and bar scenes.
“We see our restaurant as our hotel’s living room, something for the guest and locals to come and gather,” said Trevor Horwell, CEO of Nobu Hotels. “It’s the energy of the hotel. When we partnered with Simon, they wanted to engage new customers, reconfigure and refresh the whole experience at Phipps.”
Horwell said the company expects the Nobu restaurant to serve 800 to 1,000 guest checks a day. The hotel will feature a rooftop pool and bar concept.
Nobu operates about 40 restaurants and seven hotels with another nine hotels in the development pipeline in cities including Chicago, Toronto and Sao Paulo.
Horwell said the company has scouted Atlanta for some time. De Niro has been involved in several Atlanta movie productions, including upcoming The War with Grandpa, Dirty Grandpa and Last Vegas, and that helped Nobu ownership gel on the city.
“He knows Atlanta. He knows what Atlanta needs,” Horwell said of De Niro.
J. Scott Trubey is the economy and environment editor for The Atlanta Journal-Constitution. He previously served as a business reporter for the AJC covering banking, real estate and economic development. Trubey is also a former investigative reporter, with a specialty in banking, real estate and public corruption. He joined the AJC in 2010.