2016 Newsmakers: Mall Development Returns
Two years ago, retail was buzzing with talk that the mall was dead. At the National Retail Federation’s Big Show, Rick J. Caruso, founder of The Grove retail center in Los Angeles, said that the mall was doomed. “I’ve come to the conclusion that within 10 to 15 years the typical U.S. mall, unless completely reinvented, will be seen as a historical anachronism that no longer meets the needs of the public, retailers or communities,” he said at the event’s keynote address.
Plenty of mall developers must have listened to Caruso’s speech. Malls have changed. In 2016, the Runyon Group opened and leased retail centers in places that looked to be alternatives to the traditional shopping center. In Culver City, Calif., the developers opened Platform, a small retail center across the street from a Metro light-rail stop. Platform is the address of boutique fashion tenants such as Poketo, Curve and Magasin. At the edge of downtown Los Angeles, the same developer started leasing for Row DTLA, which will offer cafés, fashion boutiques and offices at the gritty compound, which includes American Apparel’s factory buildings.
Another one of 2016’s mall stories was the introduction of the Lido Marina Village in Newport Beach, Calif. DJM Capital Partners renovated a once-frumpy waterside retail district and introduced a luxe shopping experience with tenants such as the first Elyse Walker shop outside of Los Angeles.
Major malls have signed on for multi-million-dollar renovations. Westfield Century City in Los Angeles’ Century City district introduced an extensive renovation of its Bloomingdale’s in November as part of its $955 million remodel of the major mall. Along with a new Nordstrom and a remodeled Macy’s, the place will include anchors such as a high-end Equinox fitness center and an Eataly Italian restaurant and market.
The Beverly Center, a Taubman mall three miles away from Century City, also announced a $500 million remodel. A centerpiece for the remodel will be a gourmet food hall developed by Michael Mina, a star chef.
For the near future, the focus on mall development will be on renovation and unique locations, said Larry Kosmont, president and chief executive officer of Kosmont Companies, specializing in economic development, real estate and public finance.
“The best opportunities are more about repurposing urban areas like downtown Los Angeles’ Arts District,” Kosmont said. New developments won’t be so reliant on cars. The recently passed Measure M in Los Angeles County will fund millions of dollars toward increasing mass transit. The popularity of the Uber ride service also will allow people to leave their cars at home. Without having to worry about building massive parking lots, more developers will build in spaces once considered a no-go, Kosmont said.