Hopes for Mall Fizzle as Big Tenants Stay Out of Picture
The rich promise of the Golden Triangle has tarnished a bit.
The prime, three-sided plot of vacant land in the heart of the city has drawn little interest from major retailers, who are being wooed to anchor a high-fashion mall on the site. Without a commitment from a top-flight department store, city officials say that plans for a $95-million regional mall on the Towne Center site are in trouble.
General Growth of California, a Canoga Park-based mall builder, has spent 18 months trying to line up at least two major stores for the mall on the north side of the 125-acre parcel along Bloomfield Avenue near Artesia Boulevard. But the only taker, city officials say, was Meryvn’s department store, which has since passed on the Towne Center project and will open this spring across town in the empty Ohrbach’s building in the Los Cerritos Center.
Reasons vary for the lack of interest in the Towne Center mall proposal, but retail experts agree: Southern California is saturated with large, enclosed malls, and there is little room on the shopping landscape for a new one. Experts also say a rash of mergers and store closings among several of the big chains has discouraged many retailers from committing to new mall projects, like the Towne Center in Cerritos.
As a result, a second regional mall in the city is in doubt.
“(The council) has to come to grips with the realities of today’s market,” Councilman Barry A. Rabbitt said. “It seems to me that we have exhausted all the potential avenues and we must now look at other options.”
Sentiment for New Developer
A majority of City Council members agree that it may be time to look at alternative uses for the property with a different developer. In recent interviews, several council members suggested a mix of retail, high-density residential uses and even some sort of international market with shops selling goods from around the world to lure the area’s large ethnic population as well as draw tourists to the city.
Whatever the council decides will get close scrutiny. Those living near the Towne Center site organized for the first time last fall, complaining about its scope and appropriateness in a suburb of 55,000 people. And some residents say they will register their dissatisfaction at the ballot box if they are overlooked in the decision-making process.
The failure to attract an acceptable mix of stores for a new mall has cast a shadow over the entire $225-million Towne Center project, an undertaking that some have described as the crowning act in Cerritos’ rapid rise from a dairy town to wealthy suburb in less than two decades.
Since the early 1970s, the city has looked upon the 125 acres--bounded by Bloomfield Avenue, 183rd Street and the Artesia Freeway--as the site of its long-sought downtown and the key to a financially secure future.
The council has already approved plans for a 400-room hotel, 1,800-seat community center and 1.2 million square feet of office space on the property across from City Hall. Ground breaking on the hotel and the first seven-story building will be this summer, if all goes well.
The icing on the Towne Center project was to be an upscale regional shopping mall anchored by several pricey department stores like Saks Fifth Avenue or I. Magnin. But progress on the mall has been anything but sweet, and some members of the council believe it is time to sever ties with General Growth, one of the nation’s largest mall builders. Said Councilwoman Diana Needham: “ . . . Unless they have surprising news, our relationship is over.”
The council has given General Growth, which has been working on the Towne Center project since the summer of 1985, several extensions on its agreement to deliver a mall proposal. But the council has grown impatient, and officials say General Growth’s future may be decided by the end of February.
John Bucksbaum, president of General Growth, said part of his problem has been the timing of the project.
“Twenty years ago, this city could have had its pick of retailers, but not today,” he said. “I think the situation is self-evident. Here is 125 acres in a wonderful location and there has not been a stampede to get in. . . .”
Maurice Robinson, manager of real estate consulting services for the accounting firm of Pannell, Kerr, Forster, agreed that the boom days of mall building are over. “The 1970s was a phenomenal time to build malls,” he said. “The population was spreading out and malls were in vogue. . . . All a developer had to do was draw a circle of a million people and drop a regional mall into it. But today it’s a different game, and it’s hard to envision a second mall in Cerritos.”
Reluctant to Take Chance
Because of rapid changes in the retail industry, Robinson said, many of the big chains are reluctant to take a chance on a new mall. Instead, they are enlarging existing stores or building new ones at established malls. For example in Costa Mesa, South Coast Plaza, with eight anchors, added a Broadway and J.W. Robinson last year as part of a $100-million expansion, and Nordstrom is building a new store at Fashion Square in Santa Ana next to I. Magnin and Bullock’s Wilshire.
While there are no immediate plans to expand the Los Cerritos Center, mall manager Craig Pettitt said there has been talk of building a parking structure, paving the way for a sixth department store to possibly open at the 1.3-million-square-foot mall next to the San Gabriel River Freeway.
Pettitt said he is not surprised about problems with the Towne Center mall. “It’s just too close to other malls,” he said. “My feeling is there will never be a mall there. . . . Besides, people in Southern California don’t mind driving a bit.”
Within half an hour of Cerritos, there are 11 regional malls with 41 department stores in southeastern Los Angeles County and central and western Orange County. That’s why, Bucksbaum said, nobody has bought the city’s sales pitch for its exclusive, upscale mall.
‘Not in the Cards’
“What we found is (the major anchors) are all committed elsewhere,” Councilman Rabbitt said. “It’s just not in the cards.”
So the council may shuffle its options and try its hand at something else--with someone new.
If the council parts ways with General Growth, Torrance-based Transpacific Development Co. has 60 days to decide whether it wants to take a stab at the mall project. Transpacific is developing the hotel and office portion of the Towne Center project.
Under its agreement with the city, Transpacific gets first crack at the Towne Center’s 68-acre retail site should General Growth be dropped from the project. Richard Plummer, a marketing specialist with Transpacific, said his company is interested in the property, but he declined to discuss any specific plans Transpacific might have for the site.
Councilwoman Needham said Transpacific has specialized in mixed-use developments, which she believes might work on the Towne Center property. “A blend of high-density residential, some retail and commercial development could be attractive,” Needham said. A similar project is Transpacific’s South Coast Metro Center in Costa Mesa. The company is developing several high-rise office buildings, 770 luxury condominiums and a small neighborhood shopping center, all within walking distance of Orange County’s new Performing Arts Center.
Waiting in the Wings
Should Transpacific pass on the mall project, several developers are eagerly waiting in the wings. Joseph Dabby and Amos Krausz, no strangers to Cerritos, have expressed interest in developing the site. Dabby, owner of Jovet Inc., in Beverly Hills, built the Cerritos Triangle shopping center on 183rd Street near Gridley Avenue and he received council approval recently for a seven-story office building on the corner of Artesia and Bloomfield. Krausz developed Best Plaza and restaurant row along 183rd and owns the nine-story office tower on Studebaker Road.
Both believe that some type of “international or festival marketplace” is the ticket for the Towne Center site, an idea that has the strong support of at least one council member, Daniel Wong.
A center with 200 speciality shops featuring goods and food from around the world would put “Cerritos on the map commercially,” Krausz said in a telephone interview from his San Francisco Bay-area office. “It would not be a another Disneyland,” he said, “but it would be a one-of-a-kind center,” that he believes would become a must stop for tourists visiting Southern California.
Dabby said that once the project is under way, big retailers might show some interest. “The big chains have been burned in some places by expanding too quickly, so they’ve gotten a bit gun-shy,” Dabby said. “The city has to prove to them it can build a first-class project before they will come here.”
The festival marketplace concept is not new. It has worked in several East Coast cities like Boston, New York and Baltimore. The Fisherman’s Wharf area of San Francisco and Horton Plaza in downtown San Diego are variations of the colorful retail concept that blends speciality shops, entertainment and restaurants with some high-density residential development. In Long Beach, nationally known developer James Rouse, one of the pioneers of festival marketplaces, has purchased the old Pike amusement park site, and there is talk he may try and duplicate in Long Beach his hugely successful Fanueil Hall Marketplace in Boston.
Idea Called Risky Venture
But retail experts say a festival or international marketplace could be risky in Cerritos. “Fanueil Hall and the Fulton Fish Market in New York have done well for two reasons: They are near water, a natural lure, and they are situated near the heart of dense population centers,” said Alfred Gobar, a private real estate economist in Brea. “In Cerritos it would be a real long shot. That city has always guessed right, but this would be a big gamble.”
Councilman Wong disagrees. He thinks that a mall with an international flavor would draw people from as far away as San Diego. “When they come to Disneyland and Knott’s Berry Farm, they will make the Towne Center their next stop,” said Wong, who added that he wants some retail project on the Towne Center site under way by the time his second term expires next year. “This city has always been innovative--solar heating in City Hall, the first auto mall. We’ve got to be creative with this project. . . . “
Councilwoman Ann B. Joynt suggests a different tact: Patience. She said the council has no reason to rush into any project. “It is a valuable piece of property, and its value will only go up,” she said. “So what’s the hurry? If there is no market for a regional mall, maybe the best alternative is waiting.”
She also doubts that there will be any movement on the issue in the next few months because Mayor Don Knabe is running in a special March 17 election for the 33rd State Senate seat. If Knabe should win, she said the council must then wrestle with filling his seat. “I suspect there will be a number of distractions in the coming weeks,” she said.
Neighbors Grumbling
When the council does take up the Towne Center question, there may be a new element to contend with, one that has not surfaced before. Residents who live near the project have only recently expressed concern about the scope of the entire 125-acre project. They complained that not enough notice was given about the project’s implications--traffic, noise and pollution.
While too late to influence the hotel and office development, resident Hector Perez said, “A lot of people are going to monitor this project from here on out.” Perez, an attorney who lives a block from the site, and several others have already presented the council with a petition asking for more citizen participation in the project approval. But he says that’s not enough.
“They should put this to a vote of the people,” Perez said. “And if they don’t, we can always register our complaints at the ballot box come reelection time.”
