Westfield Corp. plans to spend $800 million on a massive makeover of its Century City mall as it races to stave off local competitors and the rapid growth of online retailing.
The overhaul comes after a major renovation just a decade ago, underscoring the challenge of keeping pace with the revolution in retail.
When the work is completed in 2017, Westfield will have spent about $1 billion on improvements since acquiring the mall in 2002, estimated Peter Lowy, co-chief executive of Westfield Corp.
The project will transform and expand the luxury property with new shops and a heavy emphasis on restaurants — largely in an outdoor setting intended to embody the Southern California lifestyle.
The transformation into a so-called lifestyle center — a concept popularized in Los Angeles at the Grove — will include the addition of a Nordstrom department store that is moving from rival Westside Pavilion, and the first California branch of Eataly, a fashionable gourmet Italian food emporium co-owned by celebrity chef Mario Batali.
Plans call for eight acres of open space with plazas, gardens and tree-lined pathways among its shops and restaurants, said Peter Lowy, co-chief executive of Westfield Corp.
Lowy pointed to the Grove and Santa Monica Place in Santa Monica as prime competitors. The makeover also comes as online marketplaces such as Amazon.com continue to eat into the sales of conventional retailers.
Westfield is betting heavily on becoming a dining destination, Lowy said, with about one-fourth of the mall devoted to food when the makeover is complete.
Jonathan Ziegler, a Santa Barbara retail analyst, said a food-centric approach makes sense as online sales grow, because eating out is something you have to do in person. Restaurants also help draw customers to other tenants and keep a mall active at night.
"The Internet is taking away a lot of business from bricks-and-mortar stores," he said.
In the perpetual race to attract well-heeled Westside customers, Westfield also was compelled to act if it didn't want to fall behind the Grove and other upscale competitors, added Pasadena retail consultant Peter Lynch of A&G Realty Partners.
Malls have to renew themselves periodically to retain customers with updated amenities and create things for people to do to keep them coming back. "A top-tier mall has to be experiential," he said.
Details of the expansion were unveiled at an event for neighbors and officials Thursday, but work on the project was already well underway. To make room for the expansion, Westfield recently razed a 14-story office building at 1801 Avenue of the Stars that was one of the original gateway towers to Century City in the early 1960s. It also built additional garage space, doubling the mall's parking capacity to 4,700 cars.
More major construction will soon follow as Westfield races to reshape the mall, expanding its store space by about 50% to 1.2 million square feet, Lowy said. It will be made over in sections so that part of the mall will always be open.
"We are going to tear down three-quarters of it and rebuild, all while it's operating," he said.
The portions that won't be changed include the AMC Century City 15 theaters and a newer section of the mall between the multiplex and Santa Monica Boulevard. The theater complex came as part of a 2005 upgrade costing about $150 million, which also included an outdoor dining terrace popular with workers in nearby office towers.
About 30 shops have been closed already. Macy's and other stores will close in January so they can be demolished. Macy's will reopen in a new building, and Bloomingdale's will be completely remodeled.
Eataly will be considered the third anchor store for the mall. The other Eatalys in New York and Chicago have numerous mini-kitchens turning out regional Italian dishes and sell the same meats, pastas, seafood, etc. that were used in making them.
The Chicago Eataly, for example, includes a full-service restaurant called Baffo, as well as 23 other "eateries," including a focaccia bar, a rotisserie station, a panini bar, a bakery and a gelateria. There also is a salumeria selling cold cuts and dishes made with the meats, and seafood, produce and pasta markets doing the same.
The Los Angeles branch is expected to be about the same size, at 50,000 square feet, but also have extensive outdoor and rooftop seating.
Competition among local malls to get Eataly was fierce, said Lynch, who is not involved in Westfield's Century City expansion.
FOR THE RECORD: In the Aug. 21 Business section, an article about Westfield Corp.'s makeover of its Century City mall said that Nordstrom Inc. would move a store there from Westside Pavilion. The article described the current Nordstrom space as being about 100,000 square feet; it is 150,000 square feet.
Westfield also prevailed in competition for popular Seattle department store operator Nordstrom Inc., which will move from about 100,000 square feet at Westside Pavilion to nearly 150,000 square feet in Century City. Nordstrom has anchored Westside Pavilion since 1985.
Founded in Australia, Westfield is an international corporation with a reputation for lavish spending on its properties, which are prominently branded with its red Westfield logo. In Warner Center, the new $350-million Village at Westfield Topanga is set to open next month.
The Village will be another outdoor-centric lifestyle center, landscaped with native plants surrounding pathways and water features. There will be outdoor lounges, children's play areas and boccie ball courts.
The outdoor concept took off in Los Angeles after developer Caruso Affiliated built the Grove in the Fairfax district in 2002 and followed up with the Americana at Brand in Glendale six years later.
Mall landlord Macerich Co., which also owns Westside Pavilion, ripped the top off Santa Monica Place in a $265-million upgrade in 2010 that made the mall more upscale and open to ocean breezes.
Westfield bought 1801 Avenue of the Stars a decade ago with the intention of building condominiums on the site, but will instead use that location to build the new Macy's and Eataly as the footprint of the mall grows from 19 acres to 22 acres.
"Plans for the residential component have been put on hold," Lowy said.
City regulations limit the amount of additional traffic new development can create, and Westfield prefers to use its allotted car trips on the mall expansion, he said.
Homeowner activist Mike Eveloff, who lives near the mall, said he has seen the plans and supports the coming changes. Eveloff, former president of a homeowner group called Tract 7260, has been publicly skeptical of past projects in Century City. But he said Westfield "really did a good job on the last go-round" and has communicated well with neighbors about the latest project.
Westfield, he added, "has been very accessible and very aware of the neighbors' concerns."