Neighbors oppose plans to construct condos near mall.

Imagine the community surrounding a 2.5million-square-foot mall rallying to block another round of development--of housing.

In Torrance, homeowner groups representing residents near the massive, aging Del Amo Fashion Center have helped turn back a proposal by Shea Homes LP to build 226 condo units in two buildings on a site at the Del Amo Financial Center, across Hawthorne Boulevard from the mall.

The 5-0 defeat in the city's Planning Commission late last month is a shot across the bow of Mills Corp., the real estate investment trust that bought the mall from investor Guilford Glazer last year for $442 million.

Mills has embarked on a renovation of the 135-acre property that will include updating the interiors and creating a new outdoor "Main Street" type of shopping strip. Plans have also been floated for as many as 917 condo units along Fashion Way on 16 acres now taken by parking. Two four-story parking structures would replace the lost parking spaces.

The plan, said Kevin Kudlo, Mills' group vice president of development, is to capitalize on the "walk around, go around and go downtown trend" that has led to the success of areas such as the Grove in Los Angeles and City Walk at Universal Studios. Of the mall's new elements, the only one with the go-ahead so far is a 16-screen theater operated by AMC Entertainment, scheduled to open in fall 2005.

"No one's opposed to redeveloping the mall," said Robert Thompson, president of nearby Madrona Homeowners Association. "The mall has been going downhill for five years. But there is a lot of opposition to the residential aspect. We can't take the added load on the schools, the power, the water and mostly the traffic."

Kudlo said Mills is aware of the opposition, but emphasized that the residential part of the plan remains a work in progress.

"We have not asked for any approval yet," he said. "Our first priority is to build a world-class shopping center and we believe a lot of synergies will come from a mixed-use project."

Donna Spreitzer, president of the Southwood Homeowners Association, said Mills representatives have assured her the developer plans to address the group's concerns in an effort to win them over.

"I told them the community will never embrace this and they told me it will be OK once people understand it," she said.

While the plan to build new condos has dominated much of the discussion outside the mall, inside the Del Amo Fashion Center there seems to be wide agreement that a makeover for the mall is long overdue. With its seemingly endless corridors and eggshell white decor, the design recalls a distant time when big malls represented the fresh face of retailing.

"We were a cool mall, you know," said Melinda Fox, owner of a Merle Norman Cosmetics franchise and a tenant for 12 years. "I'd love to see anything that updates this place."

Mills has not announced a timetable for the renovations or released a final price for the project, but has said the work could take as long as five years to complete. So far, the company has shut down a 400,000-square-foot section of the mall facing Fashion Way.

Piecemeal development

With its two-pronged project, Mills believes it can address the logistical and aesthetic challenges that have come as a result of nearly 50 years of incremental development at the Fashion Center.

What started out in the mid-1950s as two big retailers, Sears Roebuck & Co. and JC Penney Co., with a modest assortment of satellite stores, grew section-by-section.

In the early 1970s, another complex sprang up on the north side of Carson Street just below Torrance Boulevard. Anchored by a Bullocks and a Montgomery Wards, it was augmented by smaller stores running east to west.

In 1984, Del Amo took its place as one of the nation's largest retailing spots when the two complexes were linked by a pathway tucked under Carson Street, creating a giant L-shaped retail hub.

"We called it the marriage of the malls," recalled Torrance City Manager Leroy Jackson.

Over the years, Bullocks, I Magnin and Orbach's gave way, respectively, to Macy's, Old Navy, and TJ Maxx. At the same time, more competition entered the area, notably South Coast Plaza in Costa Mesa, about 20 miles to the south.

Kudlo is well aware that the facility will have to stand out among the competition.

"It important for us to know what lies within our trading area," he said. "And as you can see there is a fair amount of competition."

Kudlo acknowledged that the aging mall has lost much of it luster.

"We want to turn this into the crown jewel of the community--a shopping center with something unique."

But the housing plans have met resistance.

City officials said the more than 900 units contemplated by Mills would nearly double the number of new residential units built in the last three years in Torrance.

"It has created an anti-growth sentiment," said Greg Lodan, a senior planning associate for the city's development review division. He said that homeowners are afraid it will change the single family home character of Torrance.

Demand for housing, though, is high. In May, the average condo price in the area near the Fashion Center was $508,000, 27 percent higher than the year earlier. Single-family home sales in the area averaged $648,000 in the period, a 35 percent increase from the previous year.

For his part, Kudlo said his company is banking that the overall value of the project will ultimately prevail. "We are developing a shopping center that is more than a shopping center; it will be an asset to the community," he said.