Developer Is Shopping for 2nd Chance to Build Mall

The city’s 10-year effort to build a regional shopping mall could take another step forward today when the City Council decides whether to sign an exclusive agreement with a Cleveland-based developer to pursue the project.

At first glance, today’s action may look like a step back. In June 1995, the city signed a similar agreement with the same company, Forest City Development, only to watch the company let the agreement lapse in December.

But council members and a company representative say Forest City never lost interest in the project and continued working with city officials. Now Forest City wants a new contract that will give the company the time it needs to lure potential mall tenants.

Several council members said Friday that they were pleased with the company’s performance and considered it the best choice to push the project forward.

“They’ve brought a lot more to the table than anyone else has,” Councilwoman Barbara Williamson said. “They’re willing to stay in there and work with us, which is more than others have done.”

The city has already gone through two other development companies in its efforts to build a mall north of the Simi Valley Freeway at 1st Street. Both bowed out when the regional economy soured during the early 1990s, making it difficult to find retailers willing to take a risk on a new mall.

Although the economy had improved by the time Forest City picked up the project, the company still had difficulty attracting tenants.

“The problem is, every department store is already represented in the market,” said Victor Grgas, project developer for Forest City.

A new mall needs department stores as anchors, drawing enough customers to generate the foot traffic that other, smaller stores in the mall will need to survive.

But the malls of Thousand Oaks and the San Fernando Valley, just a short drive from Simi Valley, already contain most of the big department stores, Grgas said.

“You’d be asking them to open an additional store in a market they already cover,” he said.

In November, Forest City released an economic feasibility study that said the mall would have to be significantly smaller than the 1 million square feet the city had once considered. Less than a month later, the company chose not to extend its six-month exclusive negotiating contract with the city.

But Grgas said the company continued negotiating to remain part of the project. The new agreement hammered out with the city would give the company 10 more months to find tenants.

One possible tenant has raised the hopes of some City Council members. The Dillard’s department store chain, which has no California stores, has announced plans to open several stores in Northern California. Grgas said Forest City is talking to Dillard’s about the Simi Valley project.

“What we’re looking to do is attract a player who is not currently in the market,” he said.

Since the Simi mall is still in the planning stages, Grgas pointed out, it would give Dillard’s a blank slate for creating a new store rather than forcing them to find a preexisting space.

“If Dillard’s is interested in this market, Simi Valley is one of the few places they could come,” he said.

Councilman Bill Davis noted that Forest City recently opened a new mall, anchored by Dillard’s, in Nevada and said the two companies seem to have a good working relationship.

“We can only hope that this is the catalyst that can get this going,” he said.