Never Underestimate the Power of a Highland Park Woman

Henry S. Miller Jr. has always known that there are a few institutions in life that one simply shouldn’t tamper with. What he didn’t know is that Highland Park Shopping Village is one of them. After buying the renowned center several months ago, Miller began hinting that there might be some tenant changes, a hint which didn’t go over with some of the Village merchants who have clientele as loyal as the palace guard. Now Miller is cast in the bad guy role, facing armies of angry ladies who are trying to “save” their favorite Village merchants.

Take the case of Hall’s Variety Store. Owner Doug Hall says he told his employees not to tell customers that the store’s lease was in jeopardy, but word got out and the protesting telephone calls to Miller’s office began. Many calls came from such socially prominent Highland Park ladies as Mrs. Trammell Crow, women who patronize Hall’s Variety not only to make purchases, but also to visit or cash checks. Some irate women telephoned Miller’s wife Juanita, also a prominent socialite, to announce that if necessary they would start a petition to save the store. It wasn’t necessary. Miller reconsidered and renewed Hall’s lease, but with less floor space. “Originally we thought that there no longer was a need for a variety store in the Village,” Miller said. After the angry telephone calls Miller admitted he had “discovered the need for that kind of store.”

“Some people don’t think that women in Highland Park ever sew, wash clothes or anything like that,” said Hall. “Well, most of them are just like any other women and they need a store which sells all sorts of household goods. The ladies have an intense loyalty to our store,” Hall explained.

Then there was the S&S flap which broke open in a half page story in The Dallas Morning News. Owner Barbara Fisher announced to some of her loyal customers that Miller was considering terminating the restaurant’s lease, which expires November 30. Again the angry telephone calls to Miller began, some from his personal friends, others from strangers. Twice the usual number of S&S customers appeared at the restaurant the day of the News story and the petition signing began. Within two days 600 signatures had been collected, with particular emphasis on securing men’s signatures, in an effort to prove that men really do dine at the S&S. Ms. Fisher describes the reaction to the News story as “overwhelming, one of the most unbelievable experiences of my life.”

The S&S situation is somewhat different from that of Hall’s Variety Store. In S&S’ case, there is no doubt that Miller wants a restaurant in the space, but there is some doubt as to which restaurant he wants there. The S&S is open to the public only two nights a week, Thursday and Friday, although it holds private parties on some other nights. Miller is looking for a restaurant which will remain open at least six nights, attracting customers to the area in hopes that the Village can become an active nighttime center.

Miller concedes that the S&S situation has him on the spot. “I don’t know what we’ll do about the S&S lease,” he says, “but if we renew it the public will say ’We forced him to do it’ and then every tenant in the Village will use the same tactic.”

At the heart of the Village tug of war is an unusual circumstance. Neighbors really do feel a close personal relationship with the 46-year-old shopping center. Most of the neighbors have lived in the area for many years and to them the Village is a historical site, their own downtown Highland Park. Over the years merchants have come to believe that the Village belongs to them (just ask one), not the owners, an unrealistic attitude engendered through the years by loose management.

Miller is caught in the crosscurrents of sentiment and economics. Quite obviously the sentiment is considerable, but so is the investment involved. A joint venture headed by Miller purchased the center from Howard Corporation, which is owned by Republic National Bank. The purchase price was steep, approximately $26 a square foot, 50 percent higher than the going rate for other first class shopping centers. If the new owners expect to make any money out of their $5-6 million deal, they must run the center with one eye on the cash register. Village lease payments are tied to the amount of each merchant’s sales – the higher the individual store sales the more lease income for the owners. Naturally the owners would like to see as many high volume stores in the Village as possible without destroying the chemistry which has made the Village so distinguished.

For the last 10 years the Village has been run loosely, allowing merchants to enjoy a considerable freedom which they’re not likely to exercise under the Miller ownership. Because Howard Corporation is owned by Republic Bank, Howard couldn’t aggressively raise rents or pressure stores to improve their merchandising methods. Some of the Village’s major tenants have close banking ties to Republic, ties which were more important to Republic than rental rates at the Village. Rates at the Village are rather low, in some cases a third of what is charged in other comparable centers. Under Miller’s ownership the leases will increase sharply to a low of about 1.5 percent of sales for a low markup store such as Safeway, to approximately 8 percent of sales for a high markup store such as a boutique.

As leases expire Miller says he will be looking at each store to determine whether its lease should be renewed. “We will look at each merchant and see whether his performance compares favorably to similar merchants at other shopping centers,” Miller said.

The Miller group is already investing money in the Village. Parking design within the Village will be altered to increase the number of spaces 15 percent while widening each space by six inches. Parking across Mockingbird will also be expanded. The lighting and general appearance of the center is being improved, in hopes of giving the Village a distinctive theme.

The Village deal was closed by George Wilkin, a Miller officer who formerly was a trust officer at Republic. Wilkin knew that Republic had to sell the Village (regulatory authorities required it) and that it was just a matter of time until the bank decided to sell. Keeping his ear to the ground and using his contacts at Republic, Wilkin moved in at the appropriate time and closed the sale, much to the disappointment of several competing brokers.

The new owners are Henry S. Miller Co., Henry S. Jr.. son Vance, son-in-law David Donosky, George Wilkin and three unidentified Dallas investors. The group borrowed $4 million to help finance what should be a very safe investment, considering the Village neighborhood isn’t about to deteriorate. The investors will enjoy two financial benefits from owning the Village. First they will be able to take the center’s depreciation and use it as a tax shelter against their personal incomes. Second, presuming the value of the Village appreciates, they will be able to sell it at a handsome profit, or they can keep the center and take out their profit in about ten years by refinancing the entire deal.

Not everything involved with the Village is as simple as dollars and cents – sometimes it helps to have friends in high places. When asked recently whose side of the Hall’s Variety Store squabble Miller’s wife, Juanita, was on, Miller hesitated for a moment, then grinned. “Theirs,” he admitted.