New focus for WEM includes hotel, arena and seniors’ complex

The second-generation Ghermezians are bringing a new focus to their family-run business, the West Edmonton Mall (WEM).

Their vision is reflected in the mall’s 10-year, 68,820-square-metre (gross leasable space) expansion plan proposal, which emphasizes diversification and an aversion to self-inflicted competition.

Waiting on the sidelines are a third hotel, an 8,000-seat multi-use arena, 125,000 sq. ft. of office space and a 600-unit adult apartment residence, likely to appear in that order.

Kenton Friesen, Business Edge
General manager and COO Gary Hanson with a design depicting West Edmonton Mall’s vision for the future.

Another 300,000 sq. ft. of retail space is proposed to be phased in at about 30,000 feet per year.

“By having non-retail and (non-entertainment) components . . . it flattens out our risk,” says Gary Hanson, general manager and chief operating officer of WEM. “It’s not as volatile.”

The hotel, tentatively scheduled for construction in 2003, will attract families on some floors and business travellers on others. The ownership structure is undecided, but it will be managed by the mall.

The multi-use arena is proposed to fill a niche that exists between the 18,000-seat Skyreach Centre and the 3,400-seat Agricom. It will target amateur and professional sporting events including hockey, lacrosse and indoor soccer, as well as trade shows and formal functions.

“The biggest asset (in the complex) is free parking,” says Hanson.

Kenton Friesen, Business Edge
Visitors pumped $8.9 billion into mall between 1996 and 2000.

The office building is penciled in on the northeast side of the mall and will serve to consolidate the head office and internal administration, allowing the present offices to convert to retail space.

Professional use is also part of the plan, and the natural growth of the west-end business sector is expected to fill up the balance.

Response from seniors surveyed about living in an apartment complex attached to the mall was surprisingly positive, says Hanson.

“They can park their car underneath, they can do their walking. There’s seniors’ skating, seniors’ events and just coming in now is an Asian grocery store,” says Hanson, referring to a T & T Supermarket being constructed in the old Canadian Tire location.

In 1994, the mall started a four-year shift from 80 per cent retail and 20 per cent entertainment to a 60/40 ratio.

The shift was designed to lessen the stress on existing retail tenants and extend the hours of the shopping centre.

An example of this reprioritizing was replacing the furniture and household goods giant IKEA (which was in direct competition with many smaller stores in the mall) with Red’s, a billiards, bowling and nightclub facility.

Incorporating entertainment outlets that open for business as the mall’s retail outlets wind down for the day alleviates congestion in the mall and parking lot. At a floor space of 493,000 square metres (5.3 million sq. ft.) contained mostly on two stories, the mall has almost maximized outward expansion in the 24 city blocks it occupies.

The majority of future growth must be vertical, and all the latest developments have been in excess of two stories, requiring the mall to seek approval from the city’s subdivision and development appeal board.

Rather than continue the convoluted approval process for every separate expansion project, the city planning department recommended the creation of a 10-year vision that would provide a framework the city could approve, says Hanson.

Approval for individual projects could then be expediently approved as long as they fall within the framework.

The mall management took the idea to heart and has recently completed 18 months of planning, which culminated in a hearing at city council on Oct. 10.

Concerns were raised about transportation and noise pollution from an increase in the number of nightclubs.

Hanson says both concerns already exist and are ongoing issues.

“What they are asking us to do is cap the nightclubs, which we are willing to do,” says Hanson.

As for transportation, WEM will pay for any improvements directly related to the mall, and it will be mutually beneficial if those improvements are done at the same time the city expands 170 Street.

A study commissioned by city Councillor Stephen Mandel in September noted that “since the mall opened . . . the mall did not receive any transportation concessions, and has not been treated differently than other large commercial developments.”

The same will hold true for the $8.2 million transportation improvements necessary to sustain the proposed developments. The mall will absorb $2.9 million of the expenses to add to the $9 million it has invested historically.

The second and third readings are scheduled for Nov. 12. If the bylaw amendments are passed, the biggest is sure to get bigger.