Retailers who ‘chased rooftops’ -- and got burned
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A couple of good stories today about Southern California commercial developments that were built based on bubblicious assumptions about housing and the economy and are now struggling. To borrow a headline from Calculated Risk, these projects ‘seemed like a good idea at the time.’
In taking a broader look at the region’s economic slump, the L.A. Times’ Peter Hong zeroes in on The Promenade Shops at Dos Lagos (pictured), which opened two years ago in Corona and, as Hong writes, were ‘built to serve communities that didn’t materialize’:
A year after the median home sales price in Southern California started to go down, Dos Lagos is a good example of how the housing slump is spreading into the broader economy. New housing developments were supposed to have brought thousands of big-spending residents to the area. But only a fraction of those houses were actually built and sold, leaving the rolling hills around the mall bulldozed and bare. ... There is also the possibility of store closings and staff cuts at the many retail complexes, like the Promenade at Dos Lagos, built to serve communities that didn’t materialize. ‘The retailers were chasing the rooftops,’ [Jack] Kyser said of stores built near new housing developments, ‘but all of a sudden they found no one is living under those rooftops.’
Kyser is chief economist of the Los Angeles County Economic Development Corp.
Calculated Risk links to this Orange County Register story about the troubled South Coast Home Furnishings Centre in Costa Mesa:
The vast sea of empty parking spaces at the South Coast Home Furnishings Centre tells a story about our local economy better than any graph or chart. The Costa Mesa retail center, envisioned as a Mecca for people looking to upgrade home interiors, was conceived and built during the historic run-up in housing prices a few years back. It opened in 2007, just as the housing market was dropping into freefall. Today, the center has the feel of a ghost town.
--Peter Viles
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Photo Credit: Los Angeles Times