Shopping Mall Stakes Future on Renovation : Simi Valley: Mountain Gate Plaza, once the city’s busiest, has been on the decline. Tenants say work on a $12-million face lift has further hurt business.
At first glance, Mountain Gate Plaza in Simi Valley appears to have everything going for it.
The shopping center is located at the busiest intersection in the city. It is surrounded by a wide variety of fast-food shops and medium-priced restaurants. All of this attracts customers to the area day and night as well as on weekends.
But despite these and other advantages, customer patronage and the number of tenants at the city’s oldest shopping plaza have been steadily declining for years. Out of 65 spaces for shops in the center, only 29 are occupied.
That may be changing. Champion Development Co. and Long Beach Services Corp., which bought the shopping center two years ago, began a $12-million renovation of Mountain Gate Plaza in December, which they hope will attract more patrons.
The renovation, scheduled for completion in time for Christmas, will include new landscaping, new lighting for the parking lot and a new facade for the center, which is located at Los Angeles Avenue and 1st Street.
It is the third and most extensive renovation that the shopping center has undergone in the past seven years. During a previous renovation in 1975, a portion of the plaza was enclosed.
“It will be very different than what you see right now,” said Elizabeth Hoxworth, a Champion spokeswoman. In addition to the mall renovation, Hoxworth said, the developer recently signed an agreement with Edwards Theatres Circuit Inc. to open a seven-screen complex in the center at the end of the year.
“Certainly the theater will be a large draw,” Hoxworth said. “It will give credibility to the entire renovation.”
Hoxworth said Mountain Gate will also benefit from a new shopping center that is under construction next door. Simi Valley Plaza, which will feature restaurants and shops, is scheduled to open toward the end of the year.
But Mountain Gate Plaza merchants remain divided about their own fate as well as that of the shopping center. Some said that Champion has failed to come through on some of its promises in the past and that they are no longer optimistic about the shopping center’s future. But others said they believe that the developer is serious about improving the center and trying to boost business.
Richard Noone, owner of Ken’s Stationers, said he is excited about the prospect of having a theater in the shopping center. Although his business has been hurt by the renovation work, he said he believes it will be worth it in the long run.
“You’ve got to have a base and that theater will pull people into the mall,” Noone said. “Like anybody else, I’d love to be making more money every month and not have to go through this hassle. But once the shopping center is complete, it’s going to be a good center for the valley. It’s going to turn around to what it used to be.”
Elias P. Pardo, owner of Anderson Jewelers, disagrees.
“There is not going to be any more business because of the theater,” Pardo said. “That’s going to bring a lot of kids, that’s not going to do anything for my business.”
Pardo, who bought the jewelry store nine years ago, said he also does not believe the renovation will help attract more customers.
“This is the third time it’s been renovated in seven years,” Pardo said of the mall.
He said he is frustrated because of the inconvenience that all of the construction work has caused his customers. Pardo and other tenants said the parking lot has been undergoing repairs for broken sewer lines, crumbling asphalt and other problems for the past three years.
“My business is off 60% of what it should be doing,” said Pardo, who has eight years remaining on his lease. “It’s hurting a lot of people. I’ve seen 35 or 40 businesses go broke in the last two years.”
Even though his business is among those that have managed to survive over the years, Pardo said that is not enough.
“I’m here to make money,” he said. “I’m not here just to hold on or to break even. That’s not the purpose of business. At this point, if I had a choice, and I got the opportunity, I would like to get the hell out.”
Ruben Donabedian, owner of Rube’s Valley House of Bar-B-Que, said that is exactly what the developer wants.
“They’re trying to chase everybody out” so they can raise the rent, said Donabedian, who has seven years left on his 20-year lease. He said that he pays 50 cents a square foot and that Champion is charging new tenants up to $1.75 a square foot.
Donabedian said his business has been off about 40% due to construction that has taken place at the plaza over the past three years.
“This is a city morgue,” he said. “This is not a shopping center.”
Donabedian said Champion should give tenants a break on their rent until the renovation is completed.
The developer points out that it has done just that in the case of Nizar Patel, owner of Shakey’s Pizza. Patel said he was ready to close down this month after Champion threatened to raise his rent.
But Patel, who said he owes more than $100,000 in back rent, said he was able to work out an agreement with the developer that will enable him to stay open for at least a few more months.
Patel said his rent is supposed to be about $5,000 a month, but that under the agreement he will only pay $2,000 a month until the new theater opens. At that time, his rent will increase to $5,000.
Hoxworth said that she understands the frustrations of some of the tenants and that “over the last five years they have been promised a lot of things that have not happened.” She added that this was for reasons beyond the developer’s control.
For example, Hoxworth said, the tenants had been told for a long time that Cineplex Odeon Corp. would be opening a multiscreen theater at the center. But she said the company’s plans fell through when it ran into financial problems.
Showing signs of its fiscal troubles, Cineplex Odeon recently announced that it will sell its 18-screen theater complex in Studio City to Universal Studios for $45 million.
As for rent increases at Mountain Gate, Hoxworth said that is just the nature of the business.
“There will be some tenants who will pay more rent than before,” Hoxworth said, because “when their lease expires, they have to renegotiate with whatever the market level is.”
Outside observers said they are convinced that Champion is making an honest effort to turn the shopping center around.
“We believe in what they are trying to accomplish there,” said June Dubreuil, a leasing coordinator with Troop Real Estate in Simi Valley. “I think they are trying to make improvements.”
Dubreuil said Mountain Gate Plaza, which opened in 1963 and was for a time the busiest shopping center in the city, began to experience a decline in business in the mid- and late 1980s when retailers began moving to the area around Sycamore Drive and Cochran Street. Target, Mervyn’s and Mann Theatres are among the businesses that have settled in or around Sycamore Plaza.
During the same period, Mountain Gate Plaza lost its two anchor tenants, Safeway and the Great Western Theater.
Dubreuil said that with the recent addition of Michael’s, an arts and crafts supply store, and Edwards Theatres, the center should be able to recapture some of its business. She said the new center being built next door will also give shoppers a reason to rediscover Mountain Gate Plaza.
“There’s a lot of excitement about 1st Street and Los Angeles again,” she said. “It’s going to come together. Yes, there are problems, but there is a renovation going on.”
Nancy Bender, executive director with the Simi Valley Chamber of Commerce, said she also thinks Champion’s efforts will eventually improve business.
“I certainly feel encouraged,” Bender said.
Nevertheless, Bender said that she has talked to both the tenants and Champion officials and that some communication problems remain.
Hoxworth agreed and said that Champion is taking steps to improve relations. She said that in the past month Champion officials have held two meetings with the merchants to discuss how the renovation is progressing and to answer questions about the developer’s plans.
During a meeting last week, Hoxworth announced that three new businesses have signed leases at the plaza, including Kinko’s, Tico Taco and Donut Cafe.
In addition, Hoxworth said, Champion will be distributing a bimonthly newsletter to the merchants to keep them informed of what is happening with the center. She said there are also plans for the developer to advertise individual businesses in the mall.
“I think they are starting to see that we are making progress,” she said. “Although not at lightning speed, we are moving forward in the right direction.”
