Making Over Topanga Plaza : Retail: The successful Woodland Hills center undergoes a $45-million renovation now rather than suffer a possible dip in sales.

Some old shopping malls don’t fade away, they simply get a face lift.

At the 28-year-old Topanga Plaza in Warner Center in Canoga Park, the $45-million surgery is designed to produce a more elegant look, with marble floors replacing ragged carpet, new skylights and storefronts, palm trees and a water fountain.

The renovation--begun in January and expected to be completed in mid-November--also features a new elevator, ramps for handicapped customers and seismic upgrading.

Why spend big money fixing something that isn’t broke? After all, Topanga Plaza is one of the San Fernando Valley’s most successful shopping centers. It has Nordstrom, May Co., Broadway and Montgomery Ward stores. Since 1984, when Nordstrom chose to open one of its popular department stores there instead of at rival malls nearby, Topanga Plaza’s sales have grown from $175 per square foot to $300, officials say, a rate achieved by only the top 1% of shopping centers nationwide.

The timing of the renovation might also seem odd, what with retailing in a nationwide slump. A costly upgrade at a time when some shopping centers and retailers have been closing their doors could be viewed as a risky move.

But John Lyda, development director for CenterMark Properties, the unit of Prudential Insurance that owns and manages Topanga Plaza, said that now is the ideal time to update the mall. “One of the worst things that can happen to a shopping center or a retailer is to have a decline in sales and then try to turn that around,” Lyda said. “The easiest thing to do is to try to catch it at its peak and keep it going.”

Another likely factor for the renovation was a similar overhaul by the Promenade, an upscale mall less than two blocks from Topanga Plaza. In recent years, the Promenade has lagged well behind other major Valley malls in sales growth, and in 1990, its sales were less than half of Topanga Plaza’s $232 million in sales.

Lyda still considers the Northridge Fashion Center a tougher competitor than the Promenade. But the Promenade’s remake “certainly gave us encouragement to make sure that we completed our renovation within the same year.”

Elena Butorac, Los Angeles regional director for La Jolla-based Hahn Co., a large shopping center developer, agreed with CenterMark’s strategy. “In a market as competitive as L. A., if you don’t renovate your neighbor will and there goes your market share,” she said.

As for the rough times in the retailing business, Lyda argued that industrywide consolidation has left stronger retailers ready to expand, particularly in markets such as the West Valley, where the population is growing and increasingly affluent. He figured the renovation would give successful tenants such as Limited Stores Inc. and The Gap Inc. an opportunity to add more space, and would lure popular retailers such as Crate & Barrel Inc. and Eddie Bauer Inc.

So far, the plan is working. Gap and Limited plan to increase the size of their stores at Topanga Plaza, and the mall has been easing out smaller, marginally performing shops as their leases expire to clear the needed room.

Crate & Barrel, a popular housewares chain, plans to open a 15,000-foot store at Topanga Plaza in May, followed by an Eddie Bauer Home Store in a year. Godiva Chocolatier, hip San Francisco retailer “bebe” and a Johnny Rockets restaurant are also moving in.

“We do have our pick of the malls,” said Bette Kahn, a spokeswoman for Crate & Barrel in Northbrook, Ill. The retailer chose Topanga Plaza because of the renovation, as well as the mall’s strong customer base and anchor department stores, she said. “A mall that is renovating and changing the space is a perfect place for us.”

CenterMark’s hope is that Topanga Plaza’s sales will grow to $400 per square foot within 2 1/2 years after the renovation is complete. That would translate to a healthy boost in revenue for CenterMark, which charges tenants about 10% of the mall’s average sales per square foot as rent.

But whether the hoped-for jump in sales materializes remains to be seen.

Keith Foxe, a spokesman for the International Council of Shopping Centers, a New York-based trade group, said that malls experience an average 19% increase in customer traffic after renovating. In other words, customers come more often and stay longer, which presumably translates into more sales.

Hahn Co.’s Butorac countered that mall owners shouldn’t expect big returns on their investments when upgrading facilities. Renovations are more a defensive tactic, she said, designed to keep customers from straying. “There isn’t always the financial return you want, but you have to do it,” she said.

Retail consultant William Flatley noted that mall developers now have another incentive to renovate: the dearth of financing available to build new malls. “The focus is not so much on new construction, but on trying to get a higher return on what you already have,” said Flatley, who works for Kurt Salmon & Associates, a New York firm that advises retailers.

For Topanga Plaza, the current renovation is its second in less than a decade. The mall was built in 1964 by May Centers Inc., a division of May Department Stores Co., in partnership with the Warner family, the original owners of the land who sold their stake in the mid-1980s.

By the early 1980s, Topanga Plaza’s sales began to decline, in part because the Promenade had opened in the 1970s and lured shoppers away. In 1984, Nordstrom came in, the mall was renovated and 50 new shops were added. Sales rebounded.

(Prudential bought a 50% stake in May Centers in 1989. In May of this year it acquired the remaining half from May Department Stores, and changed the name to CenterMark Properties. The unit owns 25 shopping centers nationwide.)

With Topanga Plaza’s renovation nearing completion, CenterMark is now turning its attention to a proposed expansion of the mall. If approved by the city of Los Angeles, the expansion would add a total of 723,000 square feet over 15 years, including two new department stores. That would enlarge the mall by two-thirds from its present size.

The developer, which owns 100 acres in Warner Center--one-tenth of the total acreage in the business development--also hopes to build seven 11-story office buildings, a hotel and up to 300 residential units there over the next 20 years in partnership with the Warner family.

The proposed mall expansion and mixed-use development are subject to the dictates of the Warner Center Specific Plan, the master plan for the business center. The specific plan is now undergoing a revision, and local homeowners groups and Councilwoman Joy Picus have been lobbying for tight restrictions on new development.

But Lyda said the current draft of the specific plan would allow for CenterMark’s proposed development. The plan is expected to be voted on by the City Council later this year, and if approved, CenterMark hopes to receive permits and begin the mall expansion in about a year.