COLUMN ONE : Mini-Mall Boom Hits a Dead End : The recession, stricter zoning and environmental laws have devastated Southern California’s signature development form of the 1980s. Not everyone is unhappy.
One week there would be a gas station, the next week there would be a mini-mall. That seemed to be the story of the ‘80s on many Southern California street corners.
So the irony wasn’t lost on Hal Katersky when he saw that a familiar San Fernando Valley mini-mall had been demolished--soon to be replaced, of all things, by a gas station.
“I got a big laugh out of it,” said the real estate investor who once was part-owner of a dozen of the shopping strips. “ . . . It has gone full circle.”
The mini-mall, Southern California’s signature development form of the 1980s, is in a maxi-slump. Construction of the centers--which cluster shops, restaurants and markets around small parking lots--has ground almost to a halt. Vacancy rates are increasing, rents are tumbling.
Banks and savings and loans have shut the door on all but the most secure construction loans, and that doesn’t include many mini-malls. New city ordinances limit the scale of mini-mall construction and require more amenities. State laws force costly underground tank removals and environmental cleanups on gas station properties. And potential tenants, spooked by sinking sales, have put off plans for new businesses.
Finally, with an estimated 2,000 of these shopping centers in Los Angeles County alone, who needs more mini-malls anyway?
The troubles have not disappointed everyone, of course. Mini-mall detractors are legion, and they are already dreaming up ways to replace what they consider one of Southern California’s worst eyesores.
The mini-mall has an ancient history by Southern California standards, though not necessarily a glorious one, dating as far back as the 1930s. But the mini-mall did not emerge as a pervasive form of development until the 1980s, when consumers’ increasing demand for convenience coincided with a shortage of space on traditional shopping thoroughfares.
The utilitarian construction and cacophony of signs may trouble architectural critics, but many consumers now welcome mini-malls as oases of fast food and quick service. “I think they are ugly, but the good thing is they are everywhere and they are accessible,” said Joyce Simmons, a personnel manager who stopped recently at a Westwood mini-mall to pick up her dry-cleaning.
“It’s quick in-and-out and you are gone,” agreed businessman Lawrence Corbell. “I think they fall in the same category as prisons. Everybody knows we need them, but nobody wants to live right next to one.”
Developers of the small centers led a seemingly charmed life for much of the last decade--awash in easy money, flush with prospective tenants and initially unfettered by government regulation. In Southern California, hundreds of parcels of land became available for development as gas stations closed in record numbers.
More than half of the 6,000 service stations in Los Angeles County in the mid-1970s had closed by last year. The high price of doing business--from rent and insurance to environmental safety measures--typically left only big-volume stations as survivors.
Mini-mall developers were often first in line to buy the land, and they found banks and savings and loans eager to make construction loans. At the same time, a steady stream of immigrants, particularly from Asia, arrived looking for places to set up shop.
“The thing that was beautiful about Los Angeles was you had a tremendous urban population,” said Bill Hayes, whose Windsor Financial Corp. is one of the biggest mini-mall builders. “There was a tremendous influx of immigrants wanting to open small businesses and very high traffic counts within a mile or two of most locations.”
Since most gas station properties were already zoned for commercial development, local government review was not required.
Then came the mid-1980s backlash.
“I think it was sort of a visceral reaction,” said Laura Lake, president of the Friends of Westwood homeowners group. “The architecture is dreck. It’s too much of the same thing. . . . They didn’t have adequate parking and you have way too many people coming in and going out (of traffic). They also become hangouts and places where criminal elements tend to congregate. . . . They are bad karma.”
The sameness of the mostly L-shaped, stucco structures came under attack almost as much as the de rigueur tenant mix of dry cleaners, nail parlor, yogurt shop and doughnut shop. Residents were so dismayed by plans to build a mini-mall on one Studio City corner that they tried to obtain cultural monument status for the existing building--a car wash.
“They are like boxes, totally nondescript,” said Ted Kitos, a Silver Lake activist. On learning that one architect had designed 300, Kitos fumed: “May he burn in hell! . . . Just kidding.”
In the eyes of urban planners, mini-malls perpetuated the city’s sprawling “suburban mentality.” And city officials complained that the centers contributed to the native phobia about walking.
Los Angeles approved its first controls in 1986 and expanded them in 1989 to require decorative walls, landscaping and twice the amount of parking previously mandated. Parking guidelines have been increased so much for restaurants, gyms and other high-traffic businesses that many cannot move into older centers with few parking places.
The city now requires a minimum of four parking spaces for every 1,000 square feet of construction and up to 10 spaces per 1,000 square feet for restaurants and other businesses that attract a lot of traffic.
Santa Monica’s parking requirements and other restrictions are so tight that city Planning Director Paul Berlant said not one of the malls has been built during his four-year tenure. San Diego invoked some of the same rules and banned the malls altogether from parts of the city. Most Orange County cities rely on standard zoning to control the malls.
The biggest obstacle to mini-malls has been the economy itself. “There are so many vacancies, there is just no market for them any more,” said Bob Linnell, a city planner in Fullerton.
Concedes Canoga Park developer Lynn Simay, who herself built about 30: “You can’t have one of them on every corner.”
Corners free of mini-malls may stay that way for awhile.
Los Angeles issued 262 retail construction projects in both 1985 and 1986, compared to just 101 in 1990 and 47 in the first eight months of 1991. An official in the city Department of Building and Safety said more than half of those permits were issued for mini-malls.
Hayes said he has not built a mini-mall in more than a year, after completing 175 over the previous 20 years. In the mid-1980s, his company had more than two dozen projects in the works at a time.
Those who are still building find tenants increasingly hard to come by.
National chains that once were mini-mall mainstays have been standing pat or closing outlets. Winchell’s doughnut shops, for example, has only about 300 stores left in the western United States, compared to its peak a decade ago of more than 1,000. The Southland Corp. filed for bankruptcy reorganization in 1987 and now has 1,700 fewer 7-Eleven stores nationwide than it did at its peak.
Winchell’s executives said they prefer to keep their remaining stores out of the malls. “There is often not enough parking. . . . You can get stuck with a long-term lease and very few customers coming in,” said John Kirkpatrick, who controls the La Mirada-based firm’s real estate.
Mom-and-pop outfits are not eager to sign those mini-mall leases either, as the retailing environment remains bleak.
Developers such as Nate Stock have felt the brunt of the slowdown. Stock has leased just 15% of the 30,000-square-foot Marina Collection center that opened a year ago near Marina del Rey. And the rent he is asking today is roughly half of the $2.50 to $3 a square foot he hoped to get when he started the project four years ago.
A city-imposed building moratorium delayed construction for a year. Then the city demanded that Stock give up a 13-foot-wide swath of his property so that street crews could widen Glencoe Avenue. Stock blamed the city’s actions for adding $1.25 million to the cost of construction.
He said he barely staved off foreclosure by selling other properties in order to buy out his partners in Marina Collection. The Marina area is still a good long-term investment, Stock believes, but he now expects it will take at least five years to break even. “When we drive by one of these empty centers,” Stock said, “we don’t just see a building. There is a lot of heartache behind every one.”
Big developers own and operate many of their own centers. Hayes of Windsor Financial, for example, said he owns about 30. But, like their clientele, mini-mall owners are typically an eclectic lot. Investors with stakes as small as $10,000 often team up to buy the centers, which can cost as little as $1 million.
Hundreds of businesses continue to flourish in the centers, but other tenants are struggling. As sales have declined, many are finding it difficult to pay higher rents locked in several years ago.
At a two-story center on Vermont Avenue across from Los Angeles City College, for instance, several of the 15 tenants said they are having trouble making ends meet. In this low-income area, even a fast-food meal or a haircut is considered a luxury and many neighborhood people who are unemployed have stopped patronizing the center.
The mostly Filipino tenants have banded together to ask the building’s management, Westwood Financial, for a break on rents. In a few cases, they have won concessions. “Right now it seems like people are working just to pay their rent,” said Myrna Sison, owner of Little Quiapo, a Filipino fast food eatery. “Not to really get ahead, just to make the rent.”
Maggie Coting, part-owner of the Baranday Market in the same center, said she is barely hanging on. “We are trying to keep it as long as we can, so we at least break even,” Coting said. “Right now, we are taking money out of our own pockets. . . . You feel like you are being chewed up.”
Owners of the centers feel their own pressures. If they don’t get anticipated rents, they can’t pay their mortgages. “Sometimes there is nothing we can do” about lowering rents, said Todd Siegel, a property manager with Westwood Financial.
While critics say they do not welcome the hard times for mini-malls, some already have conceptual plans for forms of development they consider superior to the “pod malls.” A study sponsored by UCLA and a local architectural firm recommended, for instance, the promotion of more cosmopolitan “mixed-use” developments. Street-level restaurants and shops would be topped by offices, apartments and condominiums.
Los Angeles, Santa Monica and other cities have sought to encourage this idea by letting developers build more if they combine housing with offices and retail space. Planners believe more people will walk to stores or the office if they have a place to live nearby.
Jane Blumenfeld, chief planning adviser to Los Angeles Mayor Tom Bradley, said the few mixed-use developments in Los Angeles have been popular with consumers, but developers have been hesitant to try the unfamiliar form. “For years, we have separated one use from another,” she said. “It’s going to be hard to break tradition.”
But some experts warn against “snobbish” delight in the travails of mini-malls. Kevin Starr, a professor of urban planning at USC and author of several well-known books on California history, credits the centers with fostering a sense of community in some neighborhoods, providing business opportunities for immigrants and creating shopping opportunities in some neighborhoods that don’t have supermarkets.
He sees an odd beauty driving past mini-malls at night--the yogurt shops and nail salons awash in neon and fluorescent light. “They may be ugly,” Starr said, “but Los Angeles has a certain quality of ugliness that, when perceived correctly, can be very moving.”
Even Los Angeles City Councilman Michael Woo, a frequent mini-mall basher, predicts that their demise might be met with a certain nostalgia. “I think it may happen,” Woo predicts, “in the same way we now have nostalgic feelings for drive-in restaurants that, several years from now, the Los Angeles Conservancy will be fighting to preserve some of the last remaining mini-malls.”
Barbara Hoff, director of preservation issues for the conservancy, isn’t so sure. “The last one we’ll preserve, maybe,” she said, laughing. “But not until its documented that it’s the very last one.”
