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airport development

McArthurGlen’s designer outlet outside Venice was inspired by nearby palazzos. The firm has 21 outlets in eight countries.Nick Turpin

Airports have become the stealth shopping malls of the 21st century, with proliferating acres of restaurants, massage-therapy centres and stores selling perfume, technology, luggage and books.

Now, the Vancouver International Airport is on the verge of seeing a stand-alone mall constructed on its land – what appears to be a first for North America.

And not just any mall. A 460,000-square-foot luxury outlet mall is going through the planning arm of the Vancouver Airport Authority, which is exploiting two airport trends.

One is an increased interest from Canadian airports in maximizing the value of their leased federal land. The other is shoppers' growing willingness to drop large sums of money on shopping at airports around the world.

The proposed Vancouver airport mall is also a new move for British-based McArthurGlen Group, which revolutionized the European designer-mall world 20 years ago by providing upscale settings for designer-label-mad bargain hunters.

It currently has 21 designer outlets in eight countries, where the malls are built to replicate local architecture and design features. In the mall outside Hamburg, which opened in September, there are faux half-timbered houses and Germanic town plazas. In the mall outside Venice are mosaics and frescoes inspired by the palazzos of that nearby city, the company says.

McArthurGlen has about 100 high-end brands it mixes in different quantities in its malls, including Bottega Veneta, Fendi, Paul Smith and Prada.

The company's European malls are often near airports, but not right on their land, said McArthurGlen's managing director of development, Gary Bond, in a phone interview from London.

The unique Vancouver opportunity appeared on the company's radar by chance – one where the city's function as a resort community paid off.

A company founder, Alan Glen, has houses around the world, including one in Vancouver. He saw a local advertisement from the airport authority, inviting development proposals for its land.

Plenty of factors made Vancouver a good fit: A huge contingent of Asian visitors, renowned around the world for their propensity for high spending on luxury goods. An equally big contingent of nearby local shoppers. No other outlet malls in the vicinity (the nearest at the moment is across the U.S. border, two hours from Vancouver). A spectacular natural setting, without too much of the industrial development that usually dominates near airports.

"It ticked off all the boxes. Forty per cent of Richmond is Asian and there are millions of [Asian] visitors. They're so brand conscious. But it's also just the wealth of the local population. It's a wealthy city."

There was one more huge attraction.

"We found out they have their own planning authority," Mr. Bond said. In Europe, it can take up to six years to get approvals for one of the company's malls due to complex local approvals processes and resistance from local retailers.

In Vancouver, the company approached the airport less than a year ago. Airport authority president Larry Berg announced the planned mall in June. It's expected to be open by the fall of 2014.

"It was easy to work with them," Mr. Bond said. Now the company is seeing offers come in from airport authorities around the globe, from other Canadian cities to the United Arab Emirates. McArthurGlen is also looking at some offers of land near ports.

Toronto isn't one of them, though. The Greater Toronto Airports Authority is also looking to maximize the revenue it gets from its land. Last year, it developed a real-estate plan that outlined what kinds of development it would pursue that would fit with the airport.

It recently concluded a deal with a developer who is going to build an industrial facility for the kind of company that would benefit from being able to get its products to the airport quickly. But it's not going for just any kind of development opportunity.

"We have not identified an outlet mall as being one of them," said Pat Garisto, the authority's development manager. "We look at what the community need is and the fact that it's an industrial zone. We have outlet malls very close by. Why would we compete?"

That thorny question has been raised in Vancouver, where the plan for an airport mall raised huge public interest, but also strong concerns earlier this year from the closest municipality, Richmond, and Metro Vancouver, the regional authority, which is focused on trying to shape land use and prevent sprawl.

Both Richmond Mayor Malcolm Brodie and Metro senior planner Gaetan Royer raised questions about why the airport would go into the business of mall development.

"We question whether a major retail outlet centre falls within YVR's mandate," Mr. Royer wrote in a letter last July to the airport authority. "Allocating federal land for the exclusive benefit of a development that could be undertaken by any commercial developer on private land appears to be beyond the role of an airport operator."

Mr. Brodie said the mall, then proposed for a corner of the airport's 1,340-hectare lands that was the closest to Richmond's rapidly developing downtown, went against his city's concept of trying to concentrate local retail into a town centre that was easily accessible by transit.

Since then, the airport and McArthurGlen have looked at shifting the mall location to a site next to a stop on the rapid-transit line that runs from the airport through Vancouver to downtown. Authority spokeswoman Rebecca Catley said that a significant proportion of the public wanted a mall that people could get to on the Canada Line. The first mall site would have required them either to drive or take a shuttle from a Canada Line stop.

Ms. Catley said that Vancouver's land-use plan, developed in 2007, specifically set aside a portion of the land for non-airport-related uses. Those other kinds of development will help the airport generate revenue separate from the taxes and fees that airports usually draw on for improvements.

The tempting reality for all airports is that shoppers are dropping increasing amounts of money at what used to be just waiting rooms for planes.

Vancouver just brought in a World Duty Free outlet, another European retail concept that focuses on super-luxury products.

Ms. Catley added, "We're constantly polling our passengers and one of the things they want is more high-end products."

If McArthurGlen does end up at the site on the Canada Line stop just minutes from the airport (something that Mr. Bond says is likely), Ms. Catley expects that arriving travellers will see the mall's advertising on their way into the city and make a point of visiting at some point.

It will likely also attract a new crowd that is becoming part of airport planning.

"We know people come out here because they just have an interest in airports," Ms. Catley said. They're not flying anywhere. They are simply attracted to the bustle and the shopping that airports now offer.

A luxury outlet mall will give them one more reason to make the trip out to their local aerotropolis.