Old and New Malls Square Off

Glendale’s mall brawl may be only Round 1 in the clash between old and new retail.

The closeness of Tuesday’s special election, in which voters narrowly affirmed city approval for an outdoor shopping center proposed by Los Angeles developer Rick Caruso next to the Glendale Galleria, illustrates the ability of an established mall owner to raise obstacles for competitors.

Round 2 could begin unfolding in Arcadia, where Caruso wants to develop an outdoor shopping and residential complex at Santa Anita Park, not far from an enclosed mall owned by Westfield Group.

Caruso, who developed the Grove next to the Los Angeles Farmers Market, spoke combatively Wednesday.

“In Arcadia they had a wake-up call this morning,” Caruso said. “If they fight us, they’ll wind up losing, and all they’ll do is burn a lot of bridges.”

Westfield spokeswoman Katy Dickey declined to comment.

Caruso, whose Glendale project bears the name Americana at Brand but is referred to by friends and foes as the Town Center, said he spent more than $2 million during the last three months to sway Glendale voters.

Arthur Sohikian, a spokesman for the Glendale Galleria’s owners, General Growth Properties Inc., said the company does not plan to ask for a recount.

“The ‘no’ campaign has heard from half of Glendale that this is not the right Town Center project,” Sohikian said. “We believe traffic will be gridlocked and parking will be a nightmare.”

Of the more than 29,000 votes cast by 35.7% of Glendale’s registered voters on three ordinances that dealt with the project’s planning, zoning and development agreement, Caruso squeaked by with 51.8% of the vote on Measure A, 51.3% on Measure B and 50.9% on Measure C.

Disputes related to the Town Center proposal will continue in court. General Growth has challenged the project’s environmental review in a lawsuit against the city, taking issue with the document’s parking and traffic assumptions, among other things.

Land-use battles are nothing new, but in Glendale, Caruso not only faced growth-averse neighbors but a deep-pocketed competitor who funded the opposition.

General Growth, a Chicago-based, publicly traded company, spent more than $1.4 million trying to block Caruso’s shopping center proposal.

“There have always been neighbors against developments,” said Los Angeles retail developer Jerry Snyder. “This time they joined with a developer and, all of a sudden, you have a pile of money to run a campaign.”

General Growth’s willingness to duke it out in public was also unusual, according to one observer.

“The difference in this one is that they did it openly” instead of through a proxy citizens committee, said Los Angeles developer Doug Ring. “But there wasn’t anybody dramatically impacted other than Glendale Galleria.”

More such battles could erupt as traditional, enclosed malls face new competition from rivals such as Caruso who favor so-called lifestyle centers, which typically combine dining, entertainment, specialty stores and housing in an outdoor setting.

“There’s always the potential for opposition when a large, new project is butting up against an older property,” said Aubie Goldenberg, a retail analyst at Ernst & Young in Los Angeles.

“There’s a lot of shopping centers and commercial properties out there that are aging,” Goldenberg said.

A number of mall owners, meantime, are trying to revitalize their properties.

Westfield Group, owner of Westfield Shoppingtown Santa Anita, is renovating and expanding that 30-year-old mall with the addition of an outdoor restaurant plaza, atrium and retail wing. When work is completed next month, there are expected to be 30 more stores, five more restaurants, a new theater complex and a new food court.

General Growth plans to refurbish the Glendale Galleria by remodeling the food court and offering open-air dining along Central Avenue.

In Huntington Beach, Snyder’s company tore apart a closed mall to create an outdoor shopping center called Bella Terra that should be finished next month.

“That’s how Southern California malls ought to be,” Snyder said.