Desertions Driving Up Commercial Vacancies : Warner Center: Tenants are leaving and landlords are scrambling to find replacement occupants for the Promenade and an office building.

As if a 22% office vacancy rate wasn’t bad enough, Warner Center also recently lost a department store and a major office tenant has tentatively agreed to move.

The double blow comes at a critical time for the Woodland Hills business center. With several large projects on the table--involving proposals for new office towers, hotels and mall extensions--the losses cast a shadow on Warner Center’s prospects for growth.

The Robinson’s department store at Warner Center’s Promenade mall closed earlier this month, one of 10 Southern California stores shut in the aftermath of last year’s merger of Robinson’s with May Department Stores. But just a block away at Promenade’s rival, Topanga Plaza, a May Co. survived the cuts and was renamed Robinson’s-May.

The loss of Robinson’s leaves the Promenade with two remaining anchor tenants, Saks Fifth Avenue and I. Magnin. The mall caters to affluent shoppers but has for years lived in the shadow of the bigger and more successful Topanga Plaza. Now it must find another department store at a time when most retailers are scaling back.

“I don’t know who on the upscale side has the money to invest there,” said Sandra Bane, a partner in the merchandise practice group at accounting firm Peat Marwick in Los Angeles.

Though the mall’s owner, New York real estate investment firm O’Connor Group, says it might be close to signing a new department store, a planned expansion of the mall has already been delayed and O’Connor officials won’t comment on the status of those plans.

Half a block away, 20th Century Industries, parent of auto insurer 20th Century Insurance, is outgrowing the building it now occupies. The building is owned by developer Tishman West, CenterMark Properties--a Prudential Insurance unit that also owns Topanga Plaza--and other investors.

20th Century’s lease expires in November, 1995, and it has signed a letter of intent to move less than a mile away to the proposed Warner Ridge development, a $200-million office and condominium project on De Soto Avenue across the street from the eastern border of Warner Center. That project’s developer, Jack Spound, hopes to break ground in June, bringing to an end eight years of legal wrangling over the controversial project.

John Lyda, CenterMark’s development director, said he hasn’t given up hope of signing a new lease to keep 20th Century. The problem, he said, is that his proposed expansion project has been stalled by delays in the city’s adoption of a new master plan for Warner Center.

Following years of vitriolic debate among politicians, homeowners groups and property owners, a final development plan was approved last month by a Los Angeles City Council panel. A vote by the full council is expected this summer.

If the plan is approved, CenterMark hopes to win approval to remodel the Topanga Plaza Robinson’s-May store, and eventually hopes to expand the mall. It also wants to add the new office space that 20th Century needs in time to persuade the insurer to stay.

In the meantime, he said, “We’re hoping that we don’t receive confirmation that 20th Century has finally decided to move.”

At the Promenade, O’Connor Group says that the pain caused by the loss of Robinson’s might be short-lived. It’s negotiating to buy the vacated Robinson’s building from its new owner, May Department Stores (O’Connor owns the rest of the mall). And, said Kim Solomon, Promenade general manager, “If everything goes according to plan, we could have a new department store as early as August.”

Solomon would not identify the prospective tenant, but several shopkeepers at the mall said it was Bullock’s. Officials at Bullock’s, a division of R.H. Macy & Co., said, “We are still finalizing details with the lessor,” but would not elaborate.

But even with a new anchor tenant, the loss of Robinson’s could further delay O’Connor’s plans to enlarge the Promenade and add two new department stores.

O’Connor had hoped to begin construction late last year on the $40-million expansion of the 20-year-old mall, but it missed that target. The plans called for adding 410,000 square feet, increasing the Promenade’s size by two-thirds.

One former Promenade merchant, who spoke on condition of anonymity, said that the only way to lure new retailers to the sluggish mall is through generous financial incentives. He said he moved his shop out of the mall more than a year ago because “the losses were so monumental.”

Solomon wouldn’t disclose Promenade sales levels, but the mall has over the years lost some coveted tenants to Topanga Plaza. In 1984, Nordstrom opted for Topanga Plaza over its neighbor. Even after remodeling in 1991, the Promenade failed to land another retailer it wanted, housewares chain Crate & Barrel, which is opening next month at Topanga Plaza.

Despite the loss of Robinson’s, some Promenade retailers say they haven’t been affected. “We’re always the busiest store in this mall,” said Monette Chiralo, assistant manager at the Nature Co., although she added: “Some of the other stores are always empty.”

Brent McDaneld, an I. Magnin vice president, also said he hasn’t seen a decline in business at the Promenade. And Victoria’s Secret, a division of The Limited, is even planning to enlarge its store there by about sixfold.

But on a recent weekday, only a few cars were parked in the Promenade lot outside what was once Robinson’s. The former Robinson’s building was empty, save for some stacked chairs and unadorned racks. Inside the mall, customers were sparse and several storefronts were boarded up. An eviction notice was on the door of the former Paper Goose gift shop.

“Business has slowed a little” since Robinson’s closed, said Julie Armstrong, training manager at Waldenbooks. “I come from the Westside Pavillion store, which is always busy. Here it is always like this,” she said, gesturing toward the slow foot traffic in the mall.

Meanwhile, 20th Century’s landlords have 2 1/2 years to prepare for the insurer’s possible departure from the 11-story building it has occupied since 1980.

Warner Ridge is technically not in Warner Center--which is bounded by Vanowen Street on the north, Topanga Canyon Boulevard on the west, De Soto Avenue on the east and the Ventura Freeway on the south. Rick Dinon, senior vice president at 20th Century, said if the insurer moves to Warner Ridge it would still be “part of the Warner Center community.”

Nonethess, the move would create a big hole in Warner Center, which already has a large supply of empty space. Voit Cos., Warner Center’s biggest landlord, opened its 25-story Warner Plaza III in November, 1991, but has yet to sign any leases for the office tower.

Seth Dudley, senior vice president at the commercial real estate broker Julien J. Studley Inc. in Los Angeles, believes the 20th Century building will be much easier to lease than Warner Plaza III because its rental rates are lower.

And Dudley said there are several prospective tenants that might be interested in the 20th Century building, including Amwest Insurance Group, Safeco Corp., and Pinkerton Security and Investigation Services. Those companies need large blocks of space, and most available offices in the West Valley are in small pieces, he said.

For them, Dudley said, the 20th Century building “presents a very unique opportunity.”