With San Gabriel Valley shoppers already spending many of their dollars at retail centers outside the area, the sales leakage could accelerate if Pomona loses its fight for a regional mall to Chino or Chino Hills, both in San Bernardino County.
Developers say decisions by retailers in the next year may determine where the region’s next major mall will be built.
Pomona lost ground when its developer, May Centers Inc., abandoned the Pomona project last year in favor of developing a mall at Chino Hills. But Pomona officials say their project recently regained momentum with a new developer who has found two department stores interested in leasing space.
Two huge malls just outside the San Gabriel Valley--Montclair Plaza and Glendale Galleria--are prime destinations for many San Gabriel Valley shoppers. Their success draws business, and tax dollars, away from the area.
To keep the region’s next mall in Los Angeles County, the Board of Supervisors in 1988 approved an agreement to use up to $31 million of county redevelopment revenue to aid the Pomona project. But despite the county’s financial backing--and $76 million in state and local funds committed to freeway construction to improve access to the Pomona mall site--the city faces stiff competition.
Randall Smith, director of marketing research for St. Louis-based May Centers, said the company is trying to line up anchor stores in a joint venture with the owner of the proposed Chino Hills mall site, Bramalea California Inc.
Smith said May Centers has been working on a retail center at Chino Hills for years, but also was working on a rival mall site in Pomona until it concluded that Chino Hills was the more promising project. The agreement with Pomona lapsed after the discovery of contaminated soil on a site, which had been used years ago as a dump. A spokesman for May Centers said the contamination was a factor in the company’s shift of its full attention to the Chino Hills project.
The Chino Hills site occupies more than 75 acres along the Corona Expressway, south of the Pomona Freeway. It is a block from the proposed Pomona regional shopping center, which would be built on a 74-acre site owned by the city redevelopment agency.
Pomona city officials, who contend the contamination is a manageable problem confined to three acres, say their project is in good shape, drawing new life from an aggressive new developer.
Forest City Development Inc., a national builder of shopping centers, apartments and office towers, took over efforts to develop the Pomona mall in October.
Pomona City Administrator Julio Fuentes said two department stores have written letters expressing interest in leasing more than 100,000 square feet of space each in the proposed Pomona mall, but he declined to disclose their names. “I know who they are, but the developer has asked that it be kept confidential,” he said.
The letters are not commitments to rent space, but they do represent significant progress in the mall project, Fuentes said.
“I’m more convinced than ever that the mall will be built in Pomona,” he said.
The proposed Pomona and Chino Hills sites are about two miles from a third proposed site along the Corona Expressway, at Grand Avenue in Chino. Developers and city officials say that only one of the three proposed malls is likely to be built.
“There’s only enough (population) for one mall in this area,” Fuentes said. “We’re in a footrace.”
It’s a race with high stakes.
Montclair Plaza, where many residents of the Pomona-Chino area now shop, produced $3.5 million for the city of Montclair in sales taxes last fiscal year. That was the main reason Montclair edged Pomona in total sales tax revenue--$8,980,000 to $8,906,000--last year even though Pomona has five times Montclair’s population.
Victor S. Grgas, project developer for Forest City Development, said the Chino-Pomona area is the only section of the San Gabriel Valley that is not already saturated with malls. “We feel it’s a real pocket of opportunity,” he said.
But Rocky Tarantello, associate professor of real estate and land economics at USC, noted that some retail analysts are questioning whether malls are beginning to lose some of their appeal.
Clustering stores together creates traffic congestion, adding to air pollution, he said. It might make more sense to scatter retail development, he suggested. In addition, he said, department stores, which are the heart of mall projects, are under increasing competitive pressure from discounters, specialty stores and a new creature, the outlet mall, where manufacturers sell directly to consumers at bargain prices.
But Grgas said, “The notion that malls are a thing of the past, or dinosaurs, has been overblown.” Malls continue to perform well, he said, and the key to putting together a successful retail center still lies in obtaining commitments from department stores.
On that score, the Chino and Chino Hills projects would appear to have an advantage because their developers have department store affiliations.
May Centers is partly owned by the May Department Stores. The development team for the proposed Chino mall includes Homart Development Co., an affiliate of Sears.
Developers of all three mall projects said their projected opening dates are three or four years away. Because of the time required to plan and build a mall, the current economic downturn should not be a factor, they said.
Rick Moses, Homart’s western regional vice president of mall development, said it takes 250,000 to 300,000 residents to support a regional shopping center. The trade area near the Chino site is approaching that figure but “it’s not quite there yet,” Moses said.
Homart, which owns Montclair Plaza, is undertaking the Chino mall as a joint venture with Majestic Spectrum, whose partners include Majestic Realty Co. in the City of Industry. The proposed 88-acre mall would be part of a 425-acre business center.
Moses said a winner in the mall competition should emerge soon.
“I think in the next 12 to 18 months,” Moses said, “it’s going to be clear which one will be built.”