Simi Valley Is Ready for Its Mall Debut

It’s ranked as one of the safest cities in the nation. It’s clean, has plenty of parks, decent public transportation and home prices that for years were lower than in neighboring cities. Simi Valley has had everything that fits the definition of suburbia ... except a big mall.

That’s why this week’s opening of Simi Valley Town Center is stirring up an abundance of hoopla.

Motorists are honking their horns and giving a thumbs-up at the very sight of the center’s sign along the freeway. One store is selling a limited number of $5 “preview tickets,” to benefit charity, for those who can’t wait for the doors to officially open. Town merchants sided 3 to 1 in favor of the competition, eager to keep Simi Valley shoppers spending within Simi Valley.

“That’s the level of excitement in the community,” City Manager Mike Sedell said.

Simi Valley was never big enough or far enough away to warrant a sprawling regional mall. It’s only a short freeway drive to the retail-rich west San Fernando Valley. But population and income finally caught up with Simi Valley -- and the top-tier developers moved in.

As home values soared and median family incomes climbed to $81,000, this eastern Ventura County community of 121,000 is now considered an ideal location for the quarter-million potential consumers in the mall’s primary market area to shop.

Designed to evoke a hillside Italian village on 129 acres, the $300-million open-air mall -- constructed below a site for 500 luxury apartments -- is set for its grand opening Thursday, 34 years after the city formed an industrial-commercial development commission to attract a mall and major employers.

The center is designed to be not only a place to sell merchandise, but also a focal point for Simi Valley, a manufactured downtown of sorts.

“In most Sun Belt cities, which are [relatively] so new, there is a lack of great public spaces,” said Michael Beyard, senior resident fellow for retail and entertainment at the Urban Land Institute in Washington, D.C. “The malls have the opportunity, because they have large sites and typically are located in areas that have no downtown, to become the de facto town centers of their community.”

The single-level complex includes department store anchors Robinsons-May and Macy’s, along with six sit-down restaurants and a food court to act as a magnet to attract customers to more than 120 clothing, accessory and other retail stores lining a trellised walkway dotted with fountains, a fireplace and a center courtyard. At the western end of the mall is a 300,000-square-foot so-called power center, with big-box retailers Lowe’s hardware, Best Buy and Babies R Us.

Behind the mall, on a higher plateau farther north of the 118 Freeway, Dallas-based JPI is constructing the first phase of Jefferson at Simi Valley, 500 luxury apartments with 9-foot ceilings. Leasing is to begin in the spring, and the final units are to be completed in 2007.

The factors developers consider when deciding to build a mall came together in Simi Valley about six years ago, after decades of false starts, said John M. Gilchrist Jr. of Corti Gilchrist Partnership. The San Diego firm arranged the deal and is helping coordinate construction along with the Finley Group. Forest City Enterprises is the major partner of the deal and will be overseeing the center’s ongoing operation and management.

“The market continued to grow -- not only in bodies but, probably more importantly, in income levels,” Gilchrist said of Simi Valley. “It was also good timing from a department store aspect. They recognized they can build smaller stores, have smaller square footage, but still have the same volumes they used to have in the bigger stores.”

Gilchrist is familiar with the local market. He was in charge of opening the nearest competitor in 1978. The Oaks has become the most profitable retail center in Ventura County.

Simi Valley’s population nearly doubled between 1970 and 2000, and though the city maintains its semi-rural roots with several neighborhoods allowing horses, it is also home to major offices for Countrywide Financial Corp., Boeing Co., Farmers Insurance Group and Ricoh Corp. copiers. The city also regularly vies with Thousand Oaks for the top spot on the FBI’s list of safest U.S. cities with populations of 100,000 or more.

Along with the upscale planned community of Wood Ranch, the 39.2-square-mile city also has 35 public parks, Lost Canyons and Simi Hills golf courses, stops for Amtrak and Metrolink trains, a performing arts center, a historical museum, modern YMCA facilities and the 834-employee Simi Valley Hospital, which is undergoing a $40-million expansion to create a 170-bed patient wing.

Although outside its boundaries, Simi Valley claims the Ronald Reagan Presidential Library and Museum, which today opens its $20-million Air Force One Pavilion, housing a Boeing 707 used by seven former presidents.

“We’ve gone through a planned growth of this community and this culminates that balancing act,” Sedell, the city manager, said of the mall. “Many residents moved here over the years and they’ve had places to shop before. Now, you can finally get everything you need and might want in Simi Valley.”

Simi Valley has scores of merchants and even Mountain Gate Shopping Center, built in the mid-1960s. But the partially enclosed center has failed to attract and retain major anchors and at times has had its occupancy slip below 50%. As Mountain Gate -- sold last month for nearly $40 million to a real estate partnership -- lost its allure, rival retail centers in Thousand Oaks, Camarillo, Canoga Park and Porter Ranch have sprung up and stymied Simi Valley’s chance of luring a regional mall.

The Simi Valley Town Center’s primary market area stretches south to Thousand Oaks, includes Moorpark and Simi Valley and continues east to Chatsworth and Porter Ranch. Consultants for Corti Gilchrist said the more than 260,000 residents in this area had an average household income of $96,000 in 2003. It was expected to grow to $105,000 by the time the Simi Valley Town Center opened.

“Simi Valley is getting what it has deserved for a long, long time -- the shops and stores that they’ve utilized for years but didn’t have in their city,” said Bill Hagelis, senior vice president-retail properties for Collier Seeley in Oxnard. The firm is responsible for securing leases for the mall’s power center, which is being called Town and Country.

Melding an open-air mall with a power center is an inventive combination, say those who follow retail trends.

“If you look at the trade area, there’s nothing else out there that’s like that. This is a very forward-thinking design. Ten to 15 years ago, you wouldn’t have seen this built,” said Randy Shearin, editor of Shopping Center Business, a national trade magazine based in Atlanta.

Beyard of the Urban Land Institute said the popularity of enclosed malls has eroded after about 50 years. Today’s developers, he said, seek to better integrate shopping locations into the fabric of a community, by creating mixed uses with nearby residences that guarantee a minimum number of customers.

“We’re at a very fluid time in retail,” Beyard said. “Lots of experiments are being tried. The age of the ‘cookie cutter’ shopping center is fading.”

City leaders see the center providing a solid financial benefit. Based on anticipated sales in the first year between $260 million and $300 million, Simi Valley would receive at least $2.6 million from sales taxes and $1 million in property taxes, based on the increased value of the property.

Simi Valley expects to make a threefold return on the money it has put into the center: about $20 million, including the value of the 33 acres it owns at the site and $17 million in infrastructure improvements. It costs about $1 million annually to repay the bonds used for installing roads, sewers and other improvements -- a cost that will end after 20 years, while sales at the mall will, it is hoped, continue to climb.

Sedell says the new money could be used to hire more officers to join the 125 sworn personnel on the city’s police force and for general municipal purposes, such as landscaping, transit, senior services and street maintenance.

As many as 75,000 people are expected to stroll through the mall beginning Tuesday for various events through next weekend. The department store anchors will give their new stores a run-through by staging a charity preview shopping day Tuesday, in the case of Robinsons-May, and on Wednesday, with Macy’s ribbon-cutting.

Robinsons-May is working with more than 100 local charities, allowing them to sell tickets at $5 each to those who want to see their store and the mall early. An estimated 15,000 tickets will be available toward the goal of generating $100,000 for the community, according to Milinda Martin, a company vice president. Macy’s is having its “community shopping day” Nov. 5 to benefit more than 30 local charities.

Leigh Nixon, chief executive of the Simi Valley Chamber of Commerce, said the city’s existing merchants aren’t worried about the entry of a large competitor, but are counting on the center to keep local customers shopping within the city. An informal telephone survey conducted by the chamber determined that three in four merchants were positive about Simi Valley Town Center.

It will take time to determine whether the city has enough wealth to support a 900,000-square-foot shopping center that may expand to more than 1 million square feet, said David Rush, first vice president of commercial real estate company CB Richard Ellis in Ventura.

And as rival malls modernize, it will take continued effort by Simi Valley Town Center to maintain its customer base. Westfield Topanga, for example, plans to add 100 new shops, a new Nordstrom and a two-story Target by fall 2006, and a Neiman Marcus in 2008.

“My concern, in the long run after the initial euphoria, is: Will there be enough population in that market for such a significant addition to the retail square footage?” Rush said. “Simi Valley is an affluent community. And if the dollars that have been going elsewhere stay in town, there’s a good chance [the mall] could be a success story.”