Nordstrom Price May Be Too High for Town

The last time the bucolic calm of Santa Clarita was this rattled it was over a proposed 720-acre landfill, which would have been one of the country’s largest.

Folks showed up at City Hall en masse, angry and vocal. Not in my backyard, they screamed.

Once again, the burg just over the hill from Los Angeles is up in arms. This time, however, many Santa Claritans desperately covet what L.A. has and they lack.

Nordstrom.

We’re tired of schlepping to the Glendale Galleria or Topanga Plaza for Nordie’s, supporters say. We want one, and we want it right here in our mall.

But just as customers pay a premium for the department store’s well-known brand of white-glove service, Nordstrom is seeking an incentive package before it sets down its trademark grand piano and opens its doors in Valencia Town Center mall.

So as bait, Newhall Land & Farming Co. is offering Nordstrom, which has signed a letter of intent, a $32.5-million package of incentives. Newhall Land will front $20 million but wants the city of Santa Clarita to repay that amount, with interest, out of future sales tax revenues.

Now everyone, not just the shopaholics, has something to say before a final proposal reaches the City Council this summer.

“I didn’t think it would get to this proportion,” said Santa Clarita Mayor Jo Anne Darcy of the avalanche of daily calls, letters and questions.

The city even set up a special Web site for e-mail: nordiedeal@santa-clarita.com.

“You go to a meeting in the community and it always comes up. They can’t understand how the city could spend that much money to do that,” she said.

The Nordstrom maelstrom heated up this spring after communiques from City Hall and the mall’s developer and owner, Newhall Land & Farming Co. of Valencia.

On April 15, Darcy wrote an open letter in a half-page newspaper ad outlining the incentive package and asking for public comment.

Newhall Land & Farming, uber-developer for Santa Clarita, also launched a campaign, sending a mailer in late March to 25,000 households.

Newhall Land’s response card--with only a box for “Yes! I want a Nordstrom at Valencia Town Center and believe the required incentive arrangement, with no cost to the city, is acceptable”--stirred up its own tidal wave of sentiment.

So far, the company said, it has received 3,600 cards with the “Yes!” box checked, while 900 wrote in a no response.

At City Hall, about a thousand e-mails, calls and even some of the developer’s response cards have been stacking up. About 870 oppose the Nordstrom incentives, said city spokeswoman Gail Ortiz.

Of the $32.5 million in proposed incentives, $12.5 million includes noncash contributions from Newhall Land--including the 150,000-square-foot site for the store, a parking structure and other extras, said Newhall Land spokeswoman Marlee Lauffer.

The store would sit on what is now a parking lot facing Magic Mountain Parkway, adjacent to Sears and the Red Robin restaurant.

Although Newhall Land would pay Nordstrom $20 million up front in additional incentives, the developer wants the city to repay that amount with interest. Ortiz said that could make the total bill as much as $50 million.

Worried opponents think that’s money better spent on schools, the fire department and police, said Councilwoman Jill Klajic.

Nordstrom, which has 16 stores in Southern California, won’t comment on the pending deal, except to say it currently plans to open two new stores in the region through the year 2002--in Mission Viejo in September and in Santa Clarita by fall 2001.

The company also won’t say if it would come to Santa Clarita without an incentive. The financial deals vary from market to market, said Brooke White, a spokeswoman for the Seattle-based retailer.

“We respect the citizens of Santa Clarita and how they feel about the subject and we look to Newhall [Land] to see how we can make this project work,” she said.

Like Santa Clarita, Burbank once was desperate for a Nordstrom. But with the Glendale Nordstrom a few miles away, the city got a Bullock’s (today a Macy’s) instead.

Burbank City Manager Robert “Bud” Ovrom questioned the need for Santa Clarita to pay Nordstrom a dowry.

“My guess is Santa Clarita, either today or in the very near future, will have the [demographics] to support whatever it wants,” Ovrom said. “They are much more in the driver’s seat than we ever were.”

Nordie’s shoppers care less about the financing than about getting the store.

“It would be perfect right here,” said Casey May, 23, of Canyon Country, standing outside the proposed pad for Nordstrom. “The bigger the mall gets, the better. I love their stuff. They have great shoes.”

May’s friend, Charity Johnston, 21, of Stevenson Ranch, is equally enthusiastic.

Before the Valencia Town Center opened in 1992, her family would make a day of shopping, trekking “over the hill” to the Glendale or Northridge malls, 30 and 45 minutes away.

A local Nordstrom would add more customers to the Red Robin restaurant where she works, plus great shopping, Johnston said.

Other residents consider the city’s cost for the upscale retailer to be a lot like Nordstrom merchandise: too pricey.

“They are going to get their money twice?” asked Virginia Sanchez, 49, of Valencia. “They want money to come here and then get money when we buy their clothes? I’d shop more at a Macy’s than at a Nordstrom.”

Bob Kuhagen, 81, who lives in Canyon Country and Big Bear, thinks the tax revenues might be better spent on such city projects as transportation.

“Why would we have to pay all kinds of money to get a Nordstrom?” he asked.

To make even more cash for revenue-thirsty cities, explained Los Angeles real estate consultant Larry Kosmont.

A commitment from Nordstrom, Kosmont said, is the coup de grace of a city development deal--even if it means shelling out a hefty engagement gift.

The luxury retailer exudes a “community-level mystique” that draws upper-end shoppers, Kosmont said, which in turn draws other retailers who want to piggyback on that success.

Arcadia lured Nordstrom with a $3-million parking lot at the Santa Anita Fashion Park in 1993. Since then, Ann Taylor, Williams-Sonoma and other upscale vendors have moved in, boosting sales tax revenues by several hundred-thousand dollars a year, said Don Penman, Arcadia’s development services director.

“Nordstrom really turned that mall around,” Penman said. “It was already successful, but then it really improved it.”

At one time, Santa Barbara was losing shoppers to L.A., San Francisco and other towns, said redevelopment specialist Mitzi Clayton.

So in 1990, the city pumped about $35 million into a joint city/private venture that added a Macy’s and a Nordstrom to an existing shopping district. Now downtown is bustling again with tourists and locals, sidewalk restaurants and a Saks Fifth Avenue.

Because Santa Barbara has long basked in its reputation as a charming, beach-side resort (a TV soap opera was even named after it), the added cachet of a Saks or Nordstrom is just another plum.

Santa Clarita, on the other hand, is still building its image while trying to shake off some of the lingering dust from its sleepy cow-town days.

Even young mall rats remember the pre-1992 era when the Valencia Town Center was just onion fields.

So the city’s quest for Nordstrom seems to be as much about civic image as sales tax revenues.

“Another part of it is value, is the identity--the image issue of having Nordstrom in Santa Clarita,” said Mike Haviland, city economic development director. “It puts you into the Santa Barbara-Nordstrom image as opposed to the Sears-Penney image.”

What if Newhall Land broke its engagement with Nordstrom? For the image-conscious, could Macy’s fit the bill? The department store has an interest in the market, Lauffer said.

Last year, a city study found that Macy’s slightly edged out Nordstrom as the preferred shopping destination.

“Some people think we are more of a Macy’s community,” said Haviland.