Developer Turns Shopping Malls Into Centers of Attention
Has Rick Caruso reinvented the shopping center, as he and his champions claim? Or has the Southern California developer just put a more expensive set of clothes on an old formula?
The question is probably academic to the crowds who stroll among the ornate buildings he erected at the Promenade at Westlake in Thousand Oaks. Since opening last year, this 210,000-square-foot shopping center, anchored by a Bristol Farms supermarket and an eight-screen Mann Theatres, has become the closest thing to a town square in a city otherwise lacking in public space or night life.
While Caruso does not embrace the term “entertainment center,” he is a notable exponent of a new style of shopping center that encourages people to linger rather than make a few purchases and dash away. He is also one of a growing number of developers who have found a way to cash in on the vogue of malls that mimic downtown streets and urban ambience.
In the coming months, Caruso’s formula will be tested several more times: His next center, the Commons at Calabasas, will open Thursday. Later this year, his company, Caruso Affiliated Holdings of Santa Monica, will start construction on the controversial expansion of historical Farmers Market in Los Angeles.
While Caruso is clearly pleased to be gaining a reputation as a developer who creates pleasant, walker-friendly places, he is also pragmatic about his reason for doing so.
“Most people who go to malls stay about 30 minutes to an hour,” he said during an interview in a construction trailer on the Calabasas site. “I want people to stay three or four hours. The longer I can keep the customer on the property, the more money they will spend.”
To encourage people to lollygag on their shopping trips, Caruso invested $40 million to create a set of faux-European buildings, including towers, arches and Classical columns. Landscaping for the 190,000-square-foot Calabasas center includes miniature streams, waterfalls and footbridges.
Grand gestures should be no surprise coming from a developer who professes admiration for Steve Wynn, the Las Vegas casino magnate who recently opened the opulent Bellagio hotel in that city, and retail developer Sheldon Gordon, who created the Forum at Caesar’s Palace, an atmospheric shopping mall with a make-believe street and painted sky, also in Vegas.
Defying Conventions
Caruso has also bucked the conventions of retail development in other ways. He has planted street trees in several projects to make malls feel more like city streets, even though some merchants balk at anything that blocks the visibility of their storefronts.
He has also combined “everyday” merchants, such as supermarkets and drugstores, together with high-end merchants in the same center, even though tony retailers generally shun such ordinary neighbors.
Although Caruso said some retailers were cool to his rule bending when he introduced these concepts in the Promenade at Westlake, at least one retailer seemed enthusiastic in a recent chat.
“He’s the best. I would probably open a store anywhere with him,” said Mitchell Clipper, president of Barnes & Noble Development, the construction unit of the New York-based bookstore chain.
Most retail developers, Clipper said, want to do “the minimum amount of landscaping and setbacks to maximize the returns.” Caruso, in contrast, “wants to deliver a project with park-like settings, fountains and a lot of public space,” he said, adding that “highly educated people with disposable income like being in places like that.”
Although the 39-year-old Caruso has been a developer for nearly half his life, he has been developing retail centers for only five years.
Born in Los Angeles, Caruso attended public schools, and earned a bachelor’s degree from USC and a law degree from Pepperdine University. As a law student, he began developing industrial buildings.
After passing the bar, Caruso worked briefly as a real estate lawyer representing developers, but found himself attracted to their business. “I was more interested in what was going on the other side of the table,” he said.
Trading in his legal briefs for blueprints, Caruso quit practicing law and spent the next 15 years developing industrial buildings in California and elsewhere.
Caruso’s first retail project was a West Los Angeles retail center currently occupied by Loehmann’s. Since that time, he also completed centers in Encino and Moorpark.
The developer is a slender, dark man of middle height with a pleasantly reedy voice. Wearing sunglasses and a polo shirt, Caruso recently strolled the Calabasas site and appeared to know many of the construction workers by name.
“He is not an egotistical guy,” said Lew Horne, a longtime friend who is senior managing director at CB Richard Ellis’ Los Angeles office. “What he’s got is incredible common sense and very straightforward rules.”
When Caruso looks at a site, Horne said, “he doesn’t get very esoteric and ask what kind of [return on investment] he can get. Instead, he asks, ‘Would I like to take my family there on a Saturday night?’ ”
He also has developed a keen ear for what people say they want in their local shopping centers, and credits his ability to listen with helping win approval for projects in cities where earlier builders came to grief.
In Calabasas, “the previous developer wanted to bring in a bunch of big-box stores that the community did not want,” Caruso said. But the community was apparently appeased by Caruso’s policy of neighborhood-serving retail, such as a grocery store, as well as his commitment to balance national retailers with local merchants.
Similarly, in Farmers Market, Caruso said he has been able to win support from residents in a densely developed neighborhood traditionally hostile to new development. He dismissed the protests that greeted his project last year, when Caruso and the market’s owner, the Gilmore family, first announced their plans.
“They were worried that the old market would be torn down, which it is not,” Caruso said.
. The Grove at Farmers Market is Caruso’s proposed addition to the historical collection of wooden buildings at Third Street and Fairfax Avenue.
The 640,000-square-foot addition would take the form of 15 buildings arranged along miniature streets. Each building is designed to resemble a row of storefronts in distinct styles and materials. Adding a note of both fantasy and nostalgia to this city within a city is an internal transit system that will use retrofitted Red Line trolleys that once served the city. (Unlike the original Red Line, however, the Farmers Market trolleys will run on rubber tires, not train tracks.)
Caruso’s projects are not without their detractors.
One critic is architect and urban planner Stefanos Polyzoides, who is a prominent advocate of the New Urbanism, a movement that encourages pedestrian-oriented cities.
“It’s a tired example of the fact that the mall is a mall is a mall,” he said of the Thousand Oaks shopping center. “You can’t do anything there but shop. Whatever the style is, or however successful, it’s a classic suburban sprawl project.”
Developer’s Passion Praised
Another architect and planner, John Kaliski, had some qualified praise for Caruso’s suburban centers.
“A secret of [Caruso’s] success is that he is not going to build a formula mall,” Kaliski said. “He brings his passion and commitment” to the construction process.
He agreed, however, that Caruso’s suburban projects were not revolutionary. Caruso “is breaking the formula, but in a way that accepts the genre” of a conventional, suburban shopping mall,” Kaliski said.
But if the Promenade at Westlake is “not intrinsically different” from the standard suburban shopping center, he added, “it is better.”
Caruso himself says the architecture is about “creating an experience for shoppers.” He said his greatest pleasure comes on opening day, when he sees people thronging into his centers. “I like to see the wonderment in children’s eyes,” he said.
