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Next role for the shopping mall: city state?

The expansion of Square One shopping mall in Mississauga will add two acres of green space to the 89-acre site, including two parks and a landscaped plaza.

Square One, at the heart of Mississauga's city centre, is leading the development of master plans for Oxford Properties Group Inc.'s 11 shopping centres across Canada.

It will eventually be at the centre of Oxford's largest mixed-use development in Canada.

Built on land that was a cornfield just 35 years ago, Square One is now a shopping island surrounded by a sea of concrete parking spaces.

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Likening the future role of major shopping centres to that of a city state, Michael Kitt, executive vice-president Canada for Oxford, the real estate investment arm of Ontario Employees Retirement System (OMERS), said the development will have to meet the needs and desires of people who live, work and shop there.

"Our definition of mixed use is the creation of a community that has emotional contact with the people close to it," Mr. Kitt said. "Emotional connection and engagement is very important to us. People will go to school there, live, work and raise their kids. There'll be visitors staying in hotels and students being educated."

Oxford, with the backing of OMERS, has the scale, the partners, which in the case of Square One is Alberta Investment Management Corp. (AIMCO), global outlook and in-house expertise to focus on a long-term investment strategy that enables it to develop a master plan with a 10- to 20-year horizon, he said.

Square One, which now draws 24 million visitors a year, is in the middle of a $460-million expansion that will bring the total retail space to 2.1 million square feet.

It accounts for almost half of the current $1-billion investment Oxford is making in its Canadian retail expansion.

The first stage at Square One is an expanded food court, which opened last fall. It increased space and added upgrades such as real cutlery and dishware rather than plastic and paper. As a result, food court sales per square foot increased by 30 per cent and waste was cut by more than 80 per cent, Oxford said.

The expansion will also replace bleak concrete walls with more glass-fronted retail space and restaurants with outdoor patios, providing Square One with more inviting exteriors to attract passersby.

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Canadian department stores Holt Renfew and La Maison Simons will join Hudson's Bay and U.S. discount retailers Target and Wal-Mart as anchors when the expansion is complete in 2016.

But the expansion is not without trials. Target opened 124 stores across Canada in its first year, including one of its largest in Square One. But the formidable retailer is struggling here with distribution, pricing and management problems, triggering speculation it might leave Canada.

Mr. Kitt dismisses that notion. "Target is very good at what it does. They took on a very big challenge opening that many stores so quickly and they're still trying to connect with the Canadian consumer. But I have every confidence they'll get it figured out."

Construction is also under way on a new underground parking facility to replace an old one that was removed to accommodate Holt Renfrew.

Parking is a fulcrum issue for suburban malls. Square One will have 8,000 parking stalls, including 2,800 high-quality, climate-controlled underground spaces, when the current renovation is complete. By contrast, Eaton Centre, in Toronto's more densely populated and transit-rich downtown core, has just 2,400 spaces.

"Parking is always at the top of the list of what people talk to us about," said Mr. Kitt, shaking his head in obvious frustration at the complex conflict between cars and people.

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Like all suburbs, Mississauga, which in the past 40 years has grown rapidly to become Canada's sixth most populous municipality just behind Edmonton, was built for the automobile. Transit is beginning to catch up but not as quickly as livability and walkability are emerging as the urban planning challenges of the day.

Oxford's master plan will wrestle with those conflicts as well as the challenge of anticipating when and how the three levels of governments will respond to the need for improved urban transit.

The plan will also deal with the retail revolution triggered by a rapid growth in online shopping, Mr. Kitt said, noting "we're just beginning to learn about the shopping habits of Gen Z."

Green space will be another important component for the future, he said. The current expansion will add two acres of green space to the 89-acre site, including two parks and a landscaped plaza. But more will be coming.

Trees, grass and benches soften concrete commercial sprawl and play a special role in attracting people. "It's our intention to create places that people will have an emotional connection to and engage with," Mr. Kitt said.

Oxford's nearby Yorkdale centre demonstrates the success of its strategy. With sales of $1,300 a square foot, it is one of the top performing centres in North America.

"Yorkdale has been very successful at attracting first-in-Canada retail shops with aspirational brands and new innovations," said Tom Balkos, CBRE's senior vice-president of retail service. "They've been able to make it exciting for shoppers to visit."

Yorkdale shoppers can now buy a car at the mall, after Tesla Motors, the premium electric auto maker, opened its first shopping-centre dealership in Canada there last year. One of the first four Nordstrom department stores is scheduled to open in 2016.

But in the longer term, Square One has greater mixed-use potential than Yorkdale because of the wide expanse of Oxford's undeveloped property holdings on 41 acres north of the centre.

A preliminary rendering for the master plan suggests the possibility of 10 new office towers with eight million square feet of space, 15 condo towers and townhouses with combined total of 5,000 residential units as well as a hotel and 500,000 square feet of institutional space.

"Intensification is not a trend, it's a secular shift," Mr. Kitt said, and the master plan will address the future needs, including emotional ones, of more people living and working more closely together.

"We believe we'll take Square One [up] to the level of Yorkdale," Mr. Kitt said. "It's in the fastest growing region of North America. Our vision is to be a model in North America for world-class mixed-use development."

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