Ground- breaking soon for Simi Valley Town Center
New mall will change city forever

By John Loesing
toeditor@theacorn.com

Families flock to the city for its relative affordability and reputation for low crime, but for years, Simi Valley in Ventura County has been unable to land the one asset that it covets the most: a major shopping center.

Deemed by developers to be too small or too poor to support a large mall, Simi Valley has had to rely on a conglomeration of boulevard shops and outlying strip malls to satisfy the needs of its residents.

Much to the chagrin of city officials, an estimated $400 million in retail sales is lost each year to the nearby regional malls in Thousand Oaks, Ventura County and Los Angeles County. That sales leakage, which represents about $2 million for city coffers, is growing bigger each year, officials say.

The Simi Valley retail scene is about to change, however. Groundbreaking is scheduled for later this month on the new Simi Valley Town Center, an 800,000-square-foot open-air mall north of State Highway 118 between Erringer Road and First Street.

The 120-acre lifestyle center includes anchor tenants Macy’s and Robinsons-May, plus 500 residential apartments to be built on the shopping center periphery. The development also calls for possible offices and a hotel.

It will be the county’s third and largest regional mall.
The venture is seen as a coming out party of sorts for highly regarded San Diego developers Albert Corti and John Gilchrist of the Corti Gilchrist Partnership, which teamed up two years ago with the Finley Group, LLC to form a development team whose members have been involved in more than 50 regional shopping center openings over the past 30 years.

The Simi Valley project will cost an estimated $200 million to build and will give the group its first major equity position in the California shopping center scene.

"We were able to find a developer that was willing and able to dedicate to our project without the other distractions of projects across the country," said Brian Gabler, Simi Valley assistant city manager and economic development director.

"This is an opportunity where we can take advantage of the smart growth, mixed-use type of development," Gabler said.

Evolution of a Mall

Officials began courting a major shopping center for Simi Valley two decades ago, but results came slowly.

Melvin Simon & Associates, builders of the Mall of America in Minneapolis, the country’s biggest shopping center, acquired an option top buy the Simi property in 1986, but by the time an environmental report and specific plan were completed for the new center, the recession had struck and the developer was forced to back off.

Forest City Enterprises, Inc., which had shopping center interestes in Rancho Cucamonga, expressed an interest in the Simi development, but couldn’t close on a deal either.

Three years ago in a deal brokered by NAI Capital Commercial, 85 acres of the site were sold to Kam Sang Co., an Arcadia firm. Kam Sang gave the option to buy to Gilchrist.

The city owns the rest of the property and will turn it over to Gilchrest as part of the rate the redevelopment agreement, Gabler said.

After years of false hope and several false starts, the city felt the shopping center development had finally landed in good hands.

Corti, Gilchrist and Finley learned their real estate chops while employed at the Hahn Co. (now TrizecHahn), where they collaborated on well-known developments such Horton Plaza and University Town Center in San Diego and Park Meadows near Denver.

Although Simi Valley represents their first major development since leaving Hahn, the group has brokered deals at several other large Southern California shopping centers including Fashion Valley in San Diego and the Irvine Spectrum Entertainment Center in Orange County.

Corti-Gilchrist also was brought in as the retail advisor and leasing agent for the new, 26-block San Diego Padre stadium district.

With an average household income expected to surpass $100,000 by the time the mall opens in 2005, the chances for success in Simi Valley are good, Gabler said.

"It was just a matter of creating the demographic out here that educated the retailer about the education, the disposal income and the population growth that has happened out here and then combining those things to show there is definite untapped retail in the city," Gabler said.

Shrinking Trend

Although the term "lifestyle center" has been around for some time, industry observers say the Simi development, and others like it, could give the concept a new twist.

For one, the center’s anchor tenants want to incorporate less square footage than in the past as they cast an eye toward greater profitability. Smaller venues encourage streamlined operations and more product turnover, retail experts say.

The Robinsons-May is planned for 140,000 square feet, down significantly from the 175,000-square-foot store that the company opened in 1999 at Pacific View mall in Ventura. Macy’s will begin at only 110,000 square feet, but may expand to 140,000.

The Robinsons-May that opened recently at the Irvine Spectrum is only 140,000 square feet as well.

"The department stores are of a size that allows them to provide that regional draw, but it’s not the large 200,000 square foot stores they were looking to do in the past," Gilchrist said.

"We think the sizing of the store fits in not only with the lifestyle component, but that size store can still be very competitive in the market place."

The competition will come from, among other places, a new 86,000-square-foot Kohl’s department store only a few miles away.

"My understanding is the smaller prototype is something new for [Robinsons-May and Macy’s] as they try to ward off Kohl’s," said Larry Tanji, who leased the recently opened El Paseo Simi mall, a 200,000-square-foot Bob Selleck development.

Anchors Away?

While Gilchrist is convinced the department stores will give his shopping center the boost it needs, some critics believe the big anchors are no longer a prerequisite for shopping center success.

"Certain retailers don’t want to be in the mall anymore and some developers are looking for different anchors rather than department stores because traffic is down," said Brannon Boswell, managing editor of the trade journal Shopping Center World.

"In the past they were supposed to be bringing the people and now they’re not, so why are they there," Boswell asks. "They are no longer a given."

Still, the overall climate looks good, says Gary Seaton, a broker for NAI Capital Commercial.

At a time when the cost of doing business in Southern California is driving some retailers away, Simi Valley still offers affordable opportunity for growth. The city’s high employment base and average household income will keep the retail rents steady, if not growing.

"We’ve had a lot of retail activity in the last four months and [rents] are going up," Seaton said.

Difference Is Housing

Having an open-air mall with strong anchor tenants and slick landscaping is only part of the equation, Gilchrist says. In a city where the residential vacancy rate is practically nil, the shopping center spotlight will be shared by the new apartments.

"We think the mixed-use aspect of bringing 500 apartments contiguous to the retail helps enforce it," Gilchrist said.

Similar mixed-use projects that come to mind are Paseo Colorado in Pasadena, Highland and Hollywood in Los Angeles, and Gilchrist’s own University Town Center in San Diego where approximately 100 condominiums were built next to the retail component.

"I think if you can bring that housing element and let it still function on its own, but yet provide easy access to the retail, I think that makes sense from a planning standpoint and also for the environment," he said.

Project manager Al Corti will head up the Simi Valley leasing and F&A Architects of Glendale is handling the design.

No specific groundbreaking date has been set.

"We’re slugging through the details to get the construction underway,"Gabler said.