Malls Turn to Face-Lifts When Bottom Lines Sag
In housing industry jargon, Buena Park Mall is a definite fixer-upper.
It still draws loyal shoppers, but its orange and brown color scheme is decidedly dated and past renovations led to an unsightly hodgepodge of competing architectural styles. The main entrance is hard to find, many storefronts haven’t been updated in years, and traffic patterns are dismal.
That’s why the mall--one of a growing number of aging shopping centers throughout Southern California--is in line for a face-lift that’s designed to lure more shoppers with a heavier emphasis on food, entertainment and specialty shops.
Retail experts say many of the more than 50 major regional malls built in Southern California during the last four decades are likely candidates to be remodeled--or knocked down completely to clear the way for new retail concepts.
The New York-based International Council of Shopping Centers reports that face-lifts outnumber new mall construction by nearly a 2-1 margin nationwide.
Retail experts agree that most centers require significant renovations as they age.
“An old property can limp along for some period of time,” said Jerry Yahr, a senior vice president with Newport Beach-based Koll Real Estate Group. “But a point arrives when something just has to be done.”
The need for renovation becomes painfully obvious as shoppers abandon older centers for newer competitors. Buena Park Mall’s sales per square foot, for example, tumbled in recent years to the low $200s from the high $300s.
The $30-million redevelopment plan unveiled last week by Helios Management Co., Buena Park Mall’s Los Angeles-based owner, includes a flashy new main entrance, a 500-seat food court, two family-style restaurants and possibly an expanded movie theater complex.
The shopping center, which opened in 1961 with an outdoor design, is “an antiquated mall that was pretty much abandoned by its previous owner,” said Helios Vice President Jonathan Genton. When the renovation is completed in spring 1997, he said, “it will look like it was built yesterday.”
A drop in sales also prompted the owners of La Jolla Village Square in San Diego to gut that tired center in the early 1990s and rebuild it as a value-oriented complex with a completely new tenant list.
Atlantic Square in Monterey Park recently underwent a significant rehabilitation, and the owners of Anaheim Plaza, one of Orange County’s oldest regional malls, opted to bulldoze the entire plaza and replace it with a new center anchored by a Wal-Mart.
City officials in Pasadena reportedly have begun negotiating with Helios about a possible multimillion-dollar revitalization of the aging Plaza Pasadena.
And a Washington-based developer recently unveiled plans to bulldoze The City, a now-vacant mall in Orange, and replace it with a 1.2-million-square-foot center top-heavy with themed restaurants, a massive movie theater complex and dozens of value-oriented shops.
Retail experts say two major forces are driving the redevelopment projects: lower real estate prices and the consumers’ fickle tastes.
California’s stalled real estate market is making many homeowners weep, but the recession is sparking a wave of business for developers who specialize in revamping tired mall properties.
“Under the old land prices, the economics just wouldn’t work out,” said Kent Digby, executive vice president of Mills Corp., which plans to redevelop The City. “But now, with a 30-year-old property, we’re getting to the point where it’s affordable to knock it down and start over.” As far as customers are concerned, even well-maintained malls start to look like something out of “the old ‘Partridge Family,’ ” said shopping center council spokesman Mark Schoifet. “You have to constantly change things at a shopping center or you’ll be left in the dust.”
Buena Park Mall has changed--it was converted to an indoor mall in the late 1970s and has been remodeled since--but even loyal shoppers say it needs major renovation.
“They let it go down pretty badly in the past few years,” said Carol Schrader, a 54-year-old Anaheim resident who shops regularly at the mall. Schrader said the remodeling should lure back customers “because it’s just so convenient to get to. You don’t have to drive all the way to Brea Mall or somewhere else.”
Sanford Goodkin, a San Diego-based real estate industry consultant, cautioned that some mall owners will have to face the fact that their properties have outlived their usefulness: “Some are dinosaurs . . . that have forgotten to fall down.”
“Maybe the land has real value as a medical center or a residential project with a touch of retail,” Goodkin said. “Developers have to learn to look at these properties as real estate asset, not just as shopping centers.”
