For the Trendy and Chic : Soon-to-Open Paladion Center to Cater to the Upper Crust
Shopping for a sapphire-studded diadem or silver service for 50? Or something more discreet--a gold pen-and-pencil set, a designer scarf or $300 Italian shoes, perhaps?
For San Diegans with the taste and income for the finer things, a new era begins Feb. 22 when the Paladion retail center opens in downtown San Diego. The three-level mini-mall on Front Street west of Horton Plaza will feature only luxury stores as tenants.
Paladion’s neighborhood north of Market Street may have a way to go to achieve the status of Beverly Hills’ Rodeo Drive, New York’s 5th Avenue, Palm Beach’s Worth Avenue and Chicago’s North Michigan Avenue. But the city nonetheless is about to join the rarefied ranks of cities that have exclusive shopping districts.
Among the stores already committed to occupying space in the 115,000-square-foot development are Cartier, Tiffany & Co., Alfred Dunhill, Mark Cross, Gucci, Gianni Versace and Salvatore Ferragamo. The design of the $32-million center, which is more than 50% leased, features marble and fine wood finishing and was inspired by the Italian Renaissance architect Palladio, center developer Walt Smyk said.
The high-priced focus of the retail center makes sense because of the explosive population growth of San Diego County over the past decade, Smyk said, which has created a large enough “critical mass” of well-heeled shoppers to support its mix of goods.
Now is hardly a propitious time for a new retail center of any category, given the recession and deep slump in local retailing. Recent data shows San Diego County’s 1991 retail volume is off 5.5% over the first 11 months of the year, contrasted with the same period in 1990. Retail jobs in the area have taken a similar dip.
But the tenants said they are taking the longer view of San Diego’s market--and that they like what they see. Tiffany senior vice president Brian Ohl said last week he was attracted mainly by San Diego’s high number of tourists, the third-highest total of any any major American city. The busy traffic generated by Mexican shoppers and Pacific Rim visitors were also incentives, he said.
“I’ve known the San Diego market for 15 years and it’s undergone a tremendous metamorphosis, which has accelerated over the past five years. There has been a revitalization of downtown in new offices and condominiums,” Ohl said, in a telephone interview from his New York office. “There is no resemblance to what San Diego was 15 years ago.”
In 1990, Tiffany became the first major tenant to commit to the Paladion project, Smyk said, and will be the largest tenant with 12,500 square feet of ground-floor and second-level space. With leases signed by Tiffany and other blue chip tenants in his pocket, Smyk was able to get a construction loan in 1990 from Yasuda Bank & Trust of Japan.
Synonymous with fine silverware, jewelry and accessories, Tiffany will have 13 U.S. locations once the San Diego store opens. The firm is perhaps best known for its jewelry, fine silver and other items, which it still makes in a company-owned plant in Parsippany, N.J.
Simon Critchell, president of Cartier Inc., the U.S. subsidiary of Paris-based Cartier International, said the strong growth in tourism and San Diego’s proximity to Mexico were decisive factors in Cartier opening the San Diego store, which will be the firm’s 24th U.S. location.
“A lot of people go through San Diego,” Critchell said. “People talk of Mexico as the Hong Kong of the 1990s, and, from the perspective of the (proposed U.S.-Mexico-Canada) North American Free Trade Agreement, Mexico will become an important business area.”
Free-spending visitors are a market that retailers such as Cartier and Tiffany target assiduously. Cartier seems also to have successfully targeted the regal market. Since 1902, when Cartier made 27 crowns for the royals attending the coronation of King Edward VII of Great Britain, the 145-year-old firm has been named court jeweler to 18 royal families, Critchell said.
But visitors to the Cartier store on Front Street are more likely to see an array of watches, pens and “writing instruments,” as the company describes its pens and pencils. Both Tiffany and Cartier executives commended Smyk’s timing in conceiving the Paladion, describing it as an idea whose time had come.
Ferragamo, the Italian shoe and fashion designer whose only other U.S. retail outlets are in New York and Beverly Hills, decided to lease space at the Paladion on the day that Massimo Ferragamo, head of the U.S. operation, visited here. “He came into town and made a deal in one day,” Smyk said.
Smyk also developed the 177-unit Meridian luxury residential condominium tower one block west of the Paladion, a precursor of the surge in downtown condominium development. Open since 1985, Meridian’s condos are now 90% sold, Smyk said.
