Timetable, Cost Overruns Cited : Peninsula Center Curbs Its Expansion Plans
Owners of the Peninsula Center, the oldest shopping center on the Palos Verdes Peninsula--which is in the midst of renovation and expansion--have canceled plans for a new retail building because of escalating costs and an inability to meet an October construction deadline, according to a company spokesman.
In a surprise announcement last week at a Rolling Hills Estates City Council meeting, Sierra Real Estate Equity Trust said it was canceling the 8,191-square-foot building scheduled for what is now an interior courtyard near Buffums department store. Half of the space was to have been used to expand Buffums and the other half for retail tenants. A number of mall tenants had come to the meeting and planned to complain to the council that disruptions from construction have hurt business.
In an interview later, Richard Funke, manager of the shopping center, said anticipated costs and construction time led to the cancellation.
“As we got more and more into the details, the cost kept going and going to a point where we would not derive enough income to make it break even,” he said. Funke would not provide specific cost information.
Because of holiday season shopping, Sierra wants to complete all work by Oct. 31 and Funke said the building could not have met that deadline.
Funke said the action “is not a sign that the shopping center cannot support additional retail space.”
But Buffums’ Planning Director John Weiler said that while building costs were a significant factor in Sierra’s decision, he also believes it reflects a “more reasonable view” of the center’s needs. “It did not need more space,” he said. “It already has open leasable areas.”
In a $6-million project under way since last year, Sierra is redesigning and landscaping parking lots, putting new facades on existing buildings and adding retail space, including a fast-food outlet along Hawthorne Boulevard and a building along Silver Spur that will house five tenants. Three have been selected.
Funke said original plans called for 22,000 square feet of new retail space, which has been reduced to some 14,000 with cancellation of the additional building.
Planning Director Stephen A. Emslie said Sierra wants to retain the right to build the space in the future under the permit issued for the entire renovation project. He said, however, that the company “may be giving up that right” by canceling the work now.
