2 Developers Compete to Build Open Mall at Glendale Galleria : Retail: A city official said the keen interest bodes well for the local business climate.

An unexpected bid to develop land in competition with management of the successful Glendale Galleria has posed a “difficult” problem, but one which shows the growing vitality of retailing in the region, city officials said Thursday.

Vestar Development Co. of Phoenix has proposed a $125-million outdoor mall on land adjacent to the Galleria, which Galleria owners in July notified the city they wanted to develop.

“It’s a difficult decision,” said Jeanne Armstrong, redevelopment director. “On the one hand you have a developer that has proven they can succeed at retail development here, but on the other hand you have a new company with impressive qualifications.”

City officials said the fact that two major builders are interested in the site bodes well for Glendale’s retail economy, but it could be several months before it is decided whether the site will go to Vestar, the Galleria or another developer.

Armstrong said redevelopment agency staffers will prepare a report for the City Council within the next few weeks outlining the pros and cons of pursuing a deal with Vestar, Donahue Schriber or soliciting proposals from other builders.

Vestar asked the Glendale Redevelopment agency for exclusive rights to negotiate the purchase of 12 acres in the heart of downtown Glendale, bounded by the Galleria, Central Avenue, Brand Boulevard and Colorado Street. The company is proposing a 700,000-square-foot, open-air retail center with cinemas and other entertainment features, said company president Richard Kuhle.

“The development of this land has been discussed for the past five to seven years,” Kuhle said. “But the owners of the Galleria have never made a formal proposal. We have the financing in place and we’re ready to move forward with our project. We want to be under construction one year from now.”

But officials with Donahue Schriber, the development firm that built and owns the Galleria, said they, too, are preparing to develop an outdoor-style retail mall on the same site, and said they requested exclusive rights to negotiate for the land in July--but the redevelopment agency has not yet responded.

“We asked for the same thing they [Vestar] are asking for, but we didn’t make a big hoopla about it,” said Pat Donahue, senior vice president of the company. “We’ve been discussing this type of development with the city for two years. Anyone who says we’ve been sitting around is misinformed.”

Donahue said his firm, which built the Galleria starting in 1976, hopes to start construction on a new project in mid-1997 and have it completed within 18 months.

The 12-acre area, which includes land owned by the redevelopment agency and private owners, is also the site of a “Town Center” that would include a civic auditorium and plaza and is proposed to be built under the city’s Downtown Strategic Plan, said Armstrong.

Although plans for the Town Center are in the very early stages and it could be years before it is built, officials with both Vestar and Donahue Schriber said their developments would be designed to accommodate it.