Area Malls Playing for Big Stakes : Commerce: Owners of the county’s three largest centers are guessing their rivals’ strategies while trying to position for future growth.

In this lingering recession, banks are as tight-fisted about lending money for building shopping centers as shoppers are about spending.

But that hasn’t stopped the high-stakes game of mall development in Ventura County.

Like poker players, the owners of the county’s three largest malls are plotting how to position their retail centers for future growth, guessing their opponents’ strategies and calling each other’s bluff.

The owners of Buenaventura Mall in Ventura have submitted a proposal to the city to double the center’s size and add three department stores.

The application moves them out in front of the Esplanade Mall in Oxnard, which announced a similar expansion earlier this year but has not submitted any papers to city officials.

Meanwhile, the managers of the The Oaks mall in Thousand Oaks, apparently unperturbed by the Buenaventura Mall’s proposed expansion, will continue with their plans to go upscale by adding specialty clothing, home furnishings and toy stores and booting out poor performers.

Because the recession has slowed development of new shopping centers, developers are asking themselves, “How can I make this the dominant property within the market to preclude another developer from even entering the market?” said Barbara Teuscher, general manager of The Oaks.

But the competition is not just among developers hungry for profits. It is also among cities starving for sales tax revenues.

The Oaks, for instance, contributes about $3 million in sales tax revenues annually to Thousand Oaks, one-quarter of the city’s total sales tax base.

The Buenaventura and Esplanade malls generate less, but all sales taxes have become increasingly vital since the state two years ago slashed funding to cities, leading civic leaders to pursue new retail centers.

And in some cities where plans to build new malls or expand existing ones have stalled, officials are luring factory outlet centers and similar ventures to boost sales tax dollars.

Camarillo and Oxnard, for instance, are in a race to see which city will have the county’s first factory outlet center.

But the most notable recent advance in the county’s shopping center contest is the proposal to double the size of Buenaventura Mall. The Santa Monica-based MaceRich Co., the mall’s owner, has proposed increasing the number of department stores from two to five and double-decking the entire mall, including finishing the portion of the second floor that already had begun.

Although the expansion would allow Buenaventura Mall to push aside The Oaks as the county’s largest shopping center, the grand plans did not appear to ruffle managers of The Oaks.

“It’s just not a done deal,” Teuscher said, adding that it is becoming increasingly difficult to find department stores to anchor malls.

And, if Buenaventura’s owners “don’t get the three department stores or one department store or two department stores, there probably won’t be any expansion,” Teuscher said.

MaceRich officials listed two additional department stores as tenants on the expansion application filed with the city but would not confirm whether either company was committed to such a move.

One of the companies is Gottschalks, a Fresno-based chain of 25 stores comparable to Broadway. Gottschalks Chairman Joe Levy confirmed that the company is talking to MaceRich about moving to Buenaventura Mall.

The other company listed by MaceRich was the May Co., fueling speculation among Oxnard city officials that the May Co. would abandon the Esplanade for Buenaventura Mall.

Neither MaceRich nor the May Co. would comment on these rumors.

The May Co., based in St. Louis, also owns the Robinson’s chain, and announced two weeks ago that it would merge the two chains into Robinsons-May stores beginning in January.

Outside of Gottschalks and the May Co., Buenaventura has only a short list of other department stores to draw from because officials at both Nordstrom Inc. and R.H. Macy Co., owner of Bullock’s, said they are not considering opening stores at the mall.

MaceRich Vice President Lori Gatto said, however, that her company is talking to all major department store chains in Southern California, and she indicated that the list could include discount retailers such as Mervyn’s.

To help lure department stores, MaceRich officials can cite the more than $10 million in improvements already made as a sign of things to come at the mall.

“We have shown what Buenaventura Mall can be. We put our money where our mouth is,” Gatto said.

The improvements include green neon lights decorating the new arched ceiling and a gleaming mirrored elevator leading up to the unfinished second floor.

The Esplanade, in contrast, has no mirrors, neon or even the beginnings of a second floor.

“It’s just plain,” lamented Frank Russo, manager of the Zales jewelry store at the Esplanade.

If the Buenaventura Mall lures the May Co. from the Esplanade, it could be a fatal blow to the Oxnard mall’s prospects for improvement, officials said.

“Whether or not May Co. stays determines the expansion possibilities” at the Esplanade, said Steve Kinney, director of economic development in Oxnard.

“It’s not a case where both projects” can expand, he said. “There’s not market enough. There aren’t department stores enough to go around both projects.”

Tom Schriber, president of the Newport Beach-based Donahue Schriber Co., which owns the Esplanade, could not be reached for comment about the company’s plans for the mall.

Oxnard city officials said the company discussed with them earlier this year a proposal to double the number of department stores to four and add a second level of shops.

Although Donahue Schriber so far has not filed any applications with the city, Oxnard officials and industry observers said the Esplanade should not be counted out of the game yet.

“It’s going to be the first developer that has a couple of department stores in hand and financing in place that’s going to have the major mall” in the Oxnard-Ventura area, said Bill Speer, director of market research for The Hahn Co., the state’s largest mall developer.

The Hahn Co.’s holdings include The Oaks and La Cumbre Mall in Santa Barbara.

Speer added that Donahue Schriber has the advantage of having access to funds from a Canadian investor, while MaceRich may have to depend entirely on bank financing, which is now difficult to obtain for commercial projects.

Also, even if Buenaventura Mall obtains anchor tenants and bank loans, MaceRich will still have to satisfy strong neighborhood concerns about traffic and air pollution.

The question of which city has the major mall is an important one for the cities.

Ventura officials estimate that the proposed expansion of Buenaventura Mall could double the amount of sales taxes the shopping center generates for the city to about $2 million.

In Oxnard, the Esplanade, though it is roughly the same size as the Buenaventura Mall, generates about half as much sales tax revenues, which city officials say is a sign that Oxnard residents are shopping in other cities.

In an effort to enhance sales tax revenues, Oxnard officials approved a 265-acre Town Center project in the mid-1980s that would have featured the county’s largest mall. But the developer ran into financial difficulties and the land, on Vineyard Avenue east of the Ventura Freeway, is vacant except for one completed and one partly finished office building.

Since then, the city has taken a different tack.

After the 1990 opening of the retail center between Rice and Rose avenues that features warehouse stores and other value-oriented shops, the council in July approved the Shopping at the Rose project, a nearly 600,000-square-foot center featuring discount stores, and voted last month in favor of a 45-store, 285,000-square-foot factory outlet mall.

But Oxnard is not the only city vying for the county’s first factory outlet center. Camarillo recently approved a 60- to 80-store center, and a similar project has been proposed in Moorpark.

While these cities vie for the sales tax dollars from price-conscious consumers, the huge mall on the other side of the Conejo Grade is positioning itself to be the center for upscale retailing in Ventura County.

The Hahn Co. aims to gradually take The Oaks mall into the same league as the Beverly Center in West Los Angeles or South Coast Plaza in Costa Mesa, Teuscher said.

In 1993, the leases of one-fifth of the mall’s 150 shops expire, giving the shopping center’s managers the opportunity to boot out the poorer performers and bring in specialty clothing, home furnishings and toy stores.

The list of shops the mall would like to add includes Banana Republic, Williams-Sonoma and possibly a Sesame Street store, Teuscher said.

The planned changes are geared toward serving The Oaks’ major customer base, the upper middle-income families of the Conejo Valley, Simi Valley and Moorpark, she said.

Teuscher said only about 15% of the mall’s customers come from the north side of the Conejo Grade, primarily from Camarillo.

She estimated that an expanded Buenaventura Mall could take away about half of these customers, but only if the mall’s new selection of department stores and shops is as good as that at The Oaks.

Although the market areas of the Buenaventura or the Esplanade overlap with that of The Oaks, there is room for large regional malls at either end of the county, Teuscher said.

Ventura County’s Major Malls

Dept. of Vacancy Sales Tax Mall Square Feet Stores Shops Rate Generated The Oaks 1,085,000 Bullock’s 150 3% $3 million to May Co. Thousand Robinson’s Oaks JC Penney Broadway Buenaventura 619,805 JC Penney 92 8% $1.1 million Broadway to Ventura Esplanade 650,000 May Co. 81 5% $625,000 Sears to Oxnard

% of City’s Mall Sales Tax The Oaks 25% Buenaventura 8% Esplanade NA