Small Malls Suffer as Consumers Shop for Trendier Alternatives

On one of the most frenzied holiday shopping days of the year, Plaza Pasadena on Colorado Boulevard is relatively quiet. There are no lines at the cash registers and only a dozen or so people stand gazing at its Christmas tree.

The center, like many other small malls around the country, is facing extinction as finicky shoppers stream into other venues that offer hipper stores, entertainment features and convenient parking.

“People just have more alternatives of where to spend their money, whether it’s power centers or bigger malls,” said Doug Eldridge, a principal consultant with Price Waterhouse. “They have to know they’re not going to be wasting their time if they go there, and that means having three anchors or more.”

Nationwide, sales at smaller regional malls have been slipping, dropping to $10 per square foot last year from more than $13 in 1994, according to the Dollars and Cents of Shopping Centers, a report prepared by the Urban Land Institute.

With business dwindling, many of the struggling malls have fallen into a kind of time warp. Landlords have held off on renovations, keeping the old paint and dated signs in exchange for lower rent. In these malls, clothing stores often occupy space next to county government offices, police substations, even libraries--hardly the stuff of window shopping.

“It’s nice and quiet in here,” said Bernadette Montoya, 18, on a recent shopping trip to Long Beach Plaza, a 16-year-old shopping mall in that city’s downtown. But, she added, “you can find all this stuff somewhere else.”

Regional malls began popping up in the 1950s, appearing first as a cluster of shops huddled around a department store, then growing into retail Goliaths of more than a million square feet. Their popularity reached a zenith in the 1980s, when movies like “Valley Girl” and “Fast Times at Ridgemont High” celebrated them as the primary source of suburban entertainment.

Though the mega-malls such as Glendale Galleria and South Coast Plaza are still thriving, shoppers have grown disenchanted with smaller, enclosed centers. Last year, only 33% of 6,000 people surveyed by Price Waterhouse said they shopped at a regional mall at least once a month, compared with 39% who did in 1992.

“There is a whole generation that has grown up in a mall-center culture,” said Michael Beyard, vice president of strategic development for the Urban Land Institute. “Now they are looking for something else.”

In Pasadena, weekend crowds flock to the trendy eateries and furniture stores of Colorado Boulevard and the tony shops along South Lake Avenue rather than to Plaza Pasadena. There, empty storefronts dot the second floor and vacancy has hit a high of nearly 40% after the defection of several high-profile retailers such as the Broadway, Kay-Bee Toys and Petite Sophisticate. In their place is a collection of outlet stores and mom-and-pop tenants that have signed lower-cost month-to-month leases. Shop owners say most of their business comes from a steady trickle of nearby office workers on their lunch breaks or teens from the neighborhood who hang out after school.

“Traffic is down because it’s just not a destination mall,” said Julie Lockwood, manager of Express, a young-women’s retailer. “We’re the lowest-volume store in our district because of our location.”

Plaza Pasadena’s owner, San Diego-based TrizecHahn Corp., acknowledges that the walled-in, early-1980s complex does little to lure shoppers away from the more upscale streets nearby.

“It’s just not a successful formula,” said David Malmuth, TrizecHahn senior vice president of development. “You have to create shops that have variety, put in interesting facades and other cool stuff that adds to the richness of the experience.”

To resurrect the dying center, Malmuth’s company is prescribing a complete “de-malling,” taking down the walls and turning the stores inside-out to face the street.

Other landlords, such as the owners of Huntington Center in Huntington Beach and Anaheim Plaza, have taken a different approach, signing movie theaters or adding discount stores.

But these make-overs don’t always work, especially if a center doesn’t occupy a choice site next to a major freeway. An estimated 10% to 20% of all regional malls are expected to fold in coming years, victims of a changing landscape and shifting tastes, Beyard said.

“Some are in neighborhoods that have changed demographically or that don’t have the same buying power they used to,” Beyard said. “And in many cases there is a perception of higher crime.”

Concerns about safety have kept Sheila Allen, 46, away from Long Beach Plaza, even though it’s close to her home.

“It’s kind of scary to come over here,” she said. “There are too many kids that just hang out here.”

On a recent Sunday, Allen made one of her rare ventures into the mall to buy some half-price Levi’s at Montgomery Ward, which is shutting its doors in Long Beach later this month. So far no other retailer has stepped up to lease or purchase the building, which takes up about a fifth of the mall. And no renovations are planned to entice another large retailer to the site.

“We’re just here keeping the lights on and doors open,” said mall manager Paul DeMarco.

The small, fortress-like mall was originally envisioned as a grand shopping destination, a link to the downtown shopping and entertainment district on nearby Pine Avenue. But it never managed to steal shoppers away from larger malls in neighboring Cerritos and Lakewood. Now the collection of maternity shops and five-and-dime stores draws shoppers only from neighborhoods within a mile or two of the center, DeMarco said.

The mall’s problems started in earnest six years ago when one of its three major department store anchors, Buffums, filed for bankruptcy and left. The store sat vacant for years and sales at the mall’s specialty stores withered. By the time the mall’s owners lined up a Ross Dress for Less to inhabit the Buffums space, it was too late. Most of the coveted specialty stores like the Gap and Foot Locker had moved out.

The situation got worse last year when the mall slipped into receivership and its owners stopped signing long-term leases. Without such commitments, DeMarco said, the mall stands little chance of attracting popular stores.

“Something has to be done here,” he said. “But there are no funds for redevelopment or renovation.”

Meanwhile, after years of patronizing larger malls and community shopping centers, most shoppers’ tastes have changed.

“The only way I would shop here regularly,” said Allen, “is if they bring in stores like a Petsmart, a grocery store and a Home Depot.”