Upscale outlet mall proposed off turnpike

Another major shopping mall could be coming to tax-free New Hampshire, and this one promises to be like no other located in the retail hubs along the Massachusetts border.

Chelsea Property Group Inc., the owners of the popular upscale outlet mall in Wrentham, Mass., would like to build a similar shopping center in Merrimack. Company representatives do not have any tenants lined up yet for the approximately 130 stores, but its mall in Wrentham features such premium-brand stores as Barneys New York, Bebe, Benetton, Burberry, Versace, Salvatore Ferragamo, Coach, and Sony.

"One thing we recognize is that for our customers in the northern part of metro Boston it's not as convenient for them to come to Wrentham," said Michele Rothstein, vice president of marketing for Chelsea Property Group. "This will allow us to broaden our market."

The stores -- the outside of which will resemble traditional New England architecture, including big red barns -- would collectively consume 550,000 square feet, about half the size of most regional malls in the area, such as the Pheasant Lane Mall in Nashua. It would be built on part of the 174-acre property that overlooks the F.E. Everett Turnpike, with access off exit 10. The stores also would include mainstream brands such as Banana Republic Outlet, The Gap Outlet, J. Crew, and PacSun.

An opening is scheduled for fall 2006, but the company has not submitted a formal proposal yet to the Merrimack Planning Board for approval. Construction of the outlet center would require a change in zoning, which restricts use to offices or light industrial manufacturing. The company has asked the Planning Board to place a proposal on the Town Meeting ballot this April so residents can decide if they want to change the zoning.

That possibility has generated considerable opposition from nearby residents. They worry their neighborhoods could turn into shortcuts to get to the outlet center, and they question the wisdom of allowing a mall when corporate development would bring in more in property taxes and higher-paying jobs. Two previous proposals to build malls on the land in the past few years failed to gain Planning Board support for a zoning change in part because of neighborhood opposition.

"The one thing I like about this town is that it isn't congested with traffic," said Donna Kenney, a member of Concerned Merrimack Citizens Alliance, a grass-roots group in town that opposes retail development on the land. "One of the reasons I moved here was the rural character of the town."

If voters approve the zoning change, it would signal a turning point in the town's development. Merrimack has long resisted capitalizing on the lack of a sales tax in New Hampshire to expand its tax base with retail development -- unlike other New Hampshire communities near the Massachusetts border. Instead, the town has focused on drawing in corporations, such as Anheuser-Busch Inc., BAE Systems, and PC Connection. In fact, the outlet mall would be located across the street from one of Fidelity Investments' regional offices.

"We're very pleased they call us home," Walter Warren, Merrimack's community development director, said of the companies that have located offices or manufacturing plants in town.

But high vacancy rates among office buildings and manufacturing plants in southern New Hampshire and northern Massachusetts have caused difficulties in selling the site of the proposed outlet center for corporate uses, said Thomas Farrelly, executive director of Cushman & Wakefield of New Hampshire, which has been marketing the land for the last three years. Additionally, he said, the site contains large granite ledges, making development more costly.

"Right now, people can lease space in Massachusetts cheaper than they can in southern New Hampshire," he said.

The outlet center is expected to draw up to 7 million shoppers annually, raise $1.4 million in property taxes, and create nearly 1,000 new jobs. Chelsea Property Group doesn't expect the outlet stores will have an adverse effect on other malls in the region. The company is a wholly owned subsidiary of Simon Property Group Inc., which owns the Pheasant Lane Mall, Mall of New Hampshire in Manchester, Mall at Rockingham Park in Salem, and the Burlington Mall in Massachusetts.

"Typically, the outlet centers bring a level of shopping sophistication that people don't normally see," Rothstein said. "It brings a whole new experience to the area."

The Planning Board will probably vote at the end of a public hearing on Feb. 8 in favor of placing the zoning change on the Town Meeting ballot, said the board's chairman, Nelson Disco. He said the change is very narrow, essentially allowing only outlet stores on the property. A second zoning change proposal suggested by the Planning Board for the April ballot, he said, will ask voters to prohibit the construction of big-box stores on property around the outlet center.

"It gives us leverage to control what goes in there," Disco said of the two zoning proposals.

Some residents appear to be warming to the idea of a mall in town. At a public hearing last month on the outlet center proposal, many residents spoke in favor of it. But Concerned Merrimack Citizens Alliance intends to keep fighting. Although the outlet center would be located directly off exit 10, the group fears traffic could become so backed up at the exit's toll booths that some drivers will drive farther north to exit 11 and cut through town to get to the mall. The group doesn't want to see the kind of weekend traffic congestion that gridlocks Nashua and Salem, the two largest shopping destinations in the region.

"It could easily tangle up all local traffic," said Susan Lee, a member of the group.

Company representatives have said they do not think the proposed mall will create traffic problems because most customers will be coming from out of state and won't know how to cut through local neighborhoods. They will simply get off the highway at exit 10 to get to the mall.