A San Diego development partnership has proposed an upscale, $200-million regional shopping center in Simi Valley that would compete with malls in neighboring cities for local residents' sales-tax dollars, civic leaders announced Thursday.
The proposed complex, expected to include Robinsons-May and Macy's department stores, represents an effort by city officials to retain more sales-tax money within Simi Valley by providing high-end shopping close to home, officials said.
It would be developed by Corti Gilchrist Partnership and the Finley Group.
"If we don't build a first-rate, world-class shopping center, it will fail," Simi Valley Councilman Glen Becerra said. "It will fail because there won't be a reason to shop there. I'm not going to build a second-rate mall on those beautiful hills that will die a slow death. I'd rather keep the view."
Number crunchers at City Hall were trying to estimate how much the mall would collect annually in sales receipts and how much the city might be expected to contribute in infrastructure upgrade costs.
The 800,000-square-foot shopping center would be tucked against the hills north of the Ronald Reagan Freeway at 1st Street and Erringer Road. It has firm commitments from Robinsons-May and Macy's to serve as mall anchors, which would help lure other retailers, City Manager Mike Sedell said in a news conference at City Hall.
The project also calls for 500 residential units and 500,000 square feet of peripheral office space and big-box retailers, said Brian Gabler, the city's economic development director.
If the project clears the approval and permit process, construction could begin later this year, with the mall opening in 2005.
City leaders said they had no trepidation about entering the highly competitive retail business during tough economic times. As Simi Valley residents grow in affluence -- brought on in part by upscale residential developments, such as Wood Ranch -- they need a convenient place to shop, officials said. Homes in Wood Ranch sell for as much as $1 million and other tracts have homes in the $500,000 range.
City leaders have been working for two decades to attract the right mix of stores and investors to make a regional shopping center a reality. The 129-acre property where the mall would be built has been zoned for a regional mall since 1991. Real estate developer Kam Sang Inc. purchased the land three years ago and hired Corti Gilchrist to oversee the site.
Plans call for the mall to be configured in a "town center" design that would serve as a gathering place for residents in a community that has no downtown.
Officials said the lushly landscaped open-air mall would be similar to The Promenade in Westlake Village and Fashion Island in Newport Beach.
"The atmosphere will be so nice that people will want to go there because it's a great place to be," Becerra said. "And once you're there, you're going to spend money."
Richard Giss, a retail consultant with Deloitte & Touche in Los Angeles, said it is very unlikely the area could support another large destination mall, but a smaller model that appeals to the right demographics could make a go of it.
"The real key is: Can they attract retailers that respond to the demographics that they're trying to reach?" Giss said.
"If you've got retailers who are already convenient, it will be questionable. But people like going to a new mall. If it's done right, you can draw from the weaker centers and the older centers."
Bill Hagelis, a real estate broker for Colliers Seeley, a commercial development firm based in Los Angeles, said Macy's and Robinsons-May would not have committed to the project if they did not believe it would work.
"Robinsons-May and Macy's have done extensive studies for the last five years and they see the whole area is growing," Hagelis said.
"There will be some cannibalism to their stores in the [San Fernando] Valley and Thousand Oaks, but they'll attract shoppers from Moorpark and Wood Ranch," he said.
Becerra said city officials also hope to attract shoppers from the pricey Porter Ranch development in the San Fernando Valley, where thousands of homes are expected to go up in the next several years. Porter Ranch is about seven miles from Simi Valley via the Ronald Reagan Freeway.
City officials acknowledged Thursday they sorely need to come up with a way to generate revenue as the city of 117,000 residents fast approaches build-out.
As fewer projects are built, the city will be forced to become less reliant on development- and construction-related taxes and fees, officials said.
As state funding has become more scarce over the years, most cities have come to rely heavily on sales-tax dollars and other fees to help balance their budgets. Becerra said he was frustrated seeing residents' money flow to neighboring cities, such as Thousand Oaks, where The Oaks mall has a Robinsons-May and Macy's.
Lee Nixon, president of the Simi Valley Chamber of Commerce, said it is very unlikely mall tenants would compete with local businesses for customers because they offer such different goods and services.