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Scenes from the mall: developers build, despite slow sales.


At least four new shopping centers are under construction or planned in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850.  County, including major retail-entertainment complexes in Long Beach, Hollywood, Westwood Village and the Fairfax District.

Government and business leaders are welcoming the projects, saying they are key to revitalization efforts and will help boost sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government.  revenues.

There's just one problem: LA. already has enough shopping centers, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 many analysts.

"Clearly there is more retail being developed than there needs to be." said Tom Jirovsky, senior vice president at retail consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee
consulting company

business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a
 Kosmont & Associates.

"I don't think you need as much (retail development) as proposed," agreed Rick Caruso, a developer with Caruso Affiliated Caruso Affiliated is a real estate development company in California, U.S.A.. It is headed by Rick Caruso.

It is known particularly for building higher-end outdoor shopping centers.
 Holdings in Santa Monica Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries.  who is planning to develop a 600,000-square-foot retail center at Farmer's Market in the Fairfax District.

So why are the developers so eager? Most seem to believe that their projects are strong enough to draw traffic away from older centers and thus thrive even in a tight retail market. In addition, some of the centers under construction or in the planning stages are in areas that now lack retail offerings, such as Hollywood.

Planned projects include the Long Beach Towne Center, a 100-acre mall that will carry the first AutoNation in L.A: County and a 26-screen theatre; the 640,000-square-foot Hollywood-Highland project in Hollywood near Mann's Chinese Theatre Chinese theatre has a long and complex history. Today it is often called Chinese opera although this normally refers specifically to the popular form known as Beijing Opera; there have been many other forms of theatre in China.  that will cost $350 million; a 600,000-square-foot expansion of Farmers Market; and the 437,000-square-foot Village Center Westwood.

All these new developments come at a time when retail sales in Los Angeles have lagged behind other parts of the country. The average nationwide sales gain for the first quarter was 6.5 percent, according to the Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street.  Retail Composite Index Composite Index

A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite".
. In Los Angeles, retail sales were up only slightly more than 1 percent for same-store sales, according to TeleCheck Services.

The most recent holiday sales in Los Angeles were modest, with retailers posting an average gain of 2.3 percent, according to TeleCheck. The holidays typically post the biggest retail sales numbers.

But those numbers don't bother David Malmuth, senior vice president at TrizecHahn Centers, which is developing the Hollywood-Highland project that will include entertainment-themed restaurants and shops and a 135,000-square-foot theatre that will host the annual Academy Awards ceremony.

"We're focusing on a (concept) that will have an enduring attraction for that market," Malmuth said.

In a similar fashion, Caruso believes his Farmer's Market project will be a success because it will add significant new retailing opportunities in a densely populated area.

"Farmer's Market will be our main component," says Caruso. "We'll celebrate the history of that property and really do a first-class [TABULAR DATA OMITTED] upscale format."

He said the shopping center's open-air format and association with the Farmer's Market will distinguish it from the nearby Beverly Center, an upscale mali that markets itself in part on its mix of cutting-edge, fashion-forward boutiques.

Caruso said he is more concerned about the Village Center Westwood, which like the Farmer's Market project would have more of an open-air, Main Street feel.

The Westwood project, however, still has not been approved by the city and faces vocal opposition. But in general, shoppers prefer open-air malls like Santa Monica's Third Street Promenade The Third Street Promenade is a pedestrian street in Santa Monica, California, United States. It is considered one of the premier shopping destinations in West Los Angeles and frequently draws crowds from all over Los Angeles County.  and entertainment-driven Universal CityWalk, experts say, which is cutting into business at the enclosed malls.

"There are lots of examples of older malls that have not been able to attract new and exciting tenants and have seen their sales gradually go down," said Jirovsky at Kosmont & Associates.

To stay competitive, older malls are reinventing themselves, adding entertainment centers or outdoor areas.

The Del Amo Fashion Center Del Amo Fashion Center is a two-level regional shopping mall in Torrance, California, USA. It is currently managed and co-owned by Simon Property Group.

With a current gross leasable area (GLA) of 2.5 million ft², it is one of the largest shopping malls in the United States.
 in Torrance is adding a 369,000-square-foot entertainment wing to its 3 million-square-foot space, which is slated to open by next spring.

Glendale Galleria, which sits across the street from the recently opened Glendale Marketplace, a two-story open-air mall, went through a major renovation, Tile floors were upgraded to marble and new glass and brass doors replaced mali entrances. In addition, the Cobalt Cantina can·ti·na  
n. Southwestern U.S.
A bar that serves liquor.



[Spanish, canteen, from Italian, wine cellar.]
 restaurant came on board last December. It has an outdoor patio area.

"They've done a lot of creative things, adding arcades, entertainment," said Jacqueline Fernandez, a retail analyst at Deloitte & Touche.

With the added competition, many older malls, she says, are "happy if they could hold on to their same retail customers."

Cindy Chong, general manager at Glendale Galleria, said she doesn't see the new retail developments as a big threat.

"The dominant regional shopping centers still provide traditional shopping for Los Angeles," said Chong. "The new alternatives are usually a kind of lifestyle choice, in terms of night and weekend shopping. They add choices to the consumers."

Los Angeles also has something else in its favor: a growing population. That "offers more opportunity for retail as opposed to metropolitan New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
, which is losing population," said John Konarski, vice president of research at the International Council of Shopping Centers The International Council of Shopping Centers (ICSC) is an international trade association of the shopping center industry. The organization, founded in 1957, has 65,000 members worldwide, which include shopping center owners, developers and managers, as well as other individuals, .
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Article Details
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Author:Medina, Hildy
Publication:Los Angeles Business Journal
Date:Jun 8, 1998
Words:815
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