HomeMy WebLinkAboutShopping Ctr Update - 03-06-2013To:
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CITY OF PALM DESERT
MEMORANDUM
John Wohlmuth, City Manager
Ruth Ann Moore, Economic Development Manage
March 6, 2013
Shopping Center Update
At the February 28, 2013 City Council meeting, Councilman Spiegel raised his concerns
about several vacancies in the City's commercial core district. The following is a review of
the shopping centers/areas including stores that have leased over the past several years
and ongoing work on vacancies.
Los Sombras Center — This center, mainly composed of restaurant sites has suffered
over the years with the fire at the former Bananaz restaurant on the east side of the
property and the many vendors who occupied the restaurant location on the west side of
the property. Previously, the only successful venture at the property has been Olive
Garden. In the past year, Red Lobster has built a new restaurant on the east end of the
center and Tilted Kilt has reopened under new management on the west end of the center.
This leaves two smaller restaurant locations available. Staff has worked with several
restaurateurs but at this point staff is unaware of further negotiations on those vacancies.
Waring Plaza — The one large vacancy in this center is the former Mervyn's location. At
the beginning of the recession, Mervyn's closed all of their locations and this building was
purchased by Vons parent company with plans to relocate the Vons to this center. On
February 12, 2013, staff from the Planning department met with an architect for Vons who
stated that the parent company will instead subdivide the location and take it out to market
for lease. Currently, negotiations are underway with a 50,000 S.F. tenant but no signed
lease has been announced. Vons will remain in their current location.
Toys-R-Us store — According to the property owner of the former Toy's-R-Us store, the
property was leased in the spring of 2012. The property owner has signed a confidentiality
agreement and at this time has not revealed the name of the tenant. Tenant improvement
plans were submitted to the Building & Safety department late in 2012. After review,
permits have been approved. At this time the property owner has yet to pick up the permits
and is not yet aware when the tenant will start construction. As soon as staff is informed of
the tenant and construction dates, we will report this to Council.
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Desert Crossing — During the recession, Desert Crossing lost two major tenants. Circuit
City which closed all stores nation-wide and Office Depot left large vacancies at the center.
Last year, the Circuit City location was divided and filled with two tenants. First, Ulta
moved from their location at The River in Rancho Mirage and second, Best Buy downsized
and moved from One Eleven Town Center. Best Buy has begun to roll out this smaller
concept across the nation. This spring, Total Wines & More will complete their tenant
improvements to occupy the former Office Depot. This will be their first location in the
Coachella Valley. All of the major big -boxes in Desert Crossing are now leased.
One Eleven Town Center — With Best Buy vacating the center, the owner had the
opportunity to reposition and update the property. Construction has begun on an
expansion and tenant renovation of the major building for Whole Foods and Nordstrom
Rack. New tenant interest of this center has been heighted and currently there are
negotiations with a third 20,000+ S.F. store for the property. Whole Foods and Nordstrom
Rack will open in 2014.
Town Center Way — Known to many as the "Trader Joe's" center, Town Center Way
suffered with the loss of two of its larger tenants prior to the recession. JoAnn's Fabrics
moved to a larger location in Rancho Mirage and Mikasa closed. This winter, Banner
Mattress took over the Mikasa location when they moved from One Eleven Town Center to
make way for Whole Foods. The former JoAnn's Fabrics location is currently the only
vacancy in this center.
Westfield Mall —Westfield had submitted plans for a major expansion of the property that
would include specialty retail stores and Nordstrom's. That project was eliminated due to
the recession, leaving the property with two large vacancies in the former Macy's locations
and many of the smaller stores went dark.
In 2009 & 2010 the mall leased 18 of the closures including new restaurants such as
Buffalo Wild Wings and Togo's and specialty stores such Brow Art, Children's Place and
the Flip Flop Shop.
In 2011 Westfield began determining how best to redevelop the property while maintaining
occupancy. During the year they leased 11 of the closures with food uses such as Tutti
Frutti and Garden Grill in the food court and specialty stores including Couture, Shoe
Gallery and Charming Charlie.
In 2012, designs for renovation to the former Macy's location on the north side of the
property and the upper floor of the former Macy's on the south side of the property were
created and active negotiations have continued on all of the large vacancies. By late fall of
2012, Westfield had received approvals from Architectural Review Committee for the
renovations of the property. During that time, leasing continued and nine more vacancies
were filled with businesses including Richie's Diner, Vans Shoes, Revolution Ride Shop
and RadioShack.
In 2013, Westfield plans to begin renovations and announce several new tenants for the
former Macy's department stores.
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Palms to Pines West — With Vons remaining at the property, this center should continue
to thrive with very little vacancy. The former Friday's location is the only major vacancy at
the site. An attempted to contact the owner of the building and has so far been
unsuccessful. Staff has driven by the location and there is no real estate sign indicating
whether it is for lease. It does appear that the property has been cleaned up and staff will
continue to determine the status of the property.
Palms to Pines East — With the addition of Fresh N Easy, the big boxes in this center
have remained filled. Additional tenants to the center over the past three years include J
Russell Salon, Clementine's and Blue Orchid.
Highway 111 — During the recession, this area had its share merchants that closed
including Murph's Gaslamp, Baker's Square, Coco's and KFC. Many of those spaces have
been released with tenants such as Wells Fargo, Panera Bread, 3rd Corner Wine and
Bistro, Mario's Italian Restaurant, China Imports and Lady Golf.
El Paseo Square — This center that is anchored by Office Max and faces both Highway
111 and El Paseo lost many stores during the recession. The side facing El Paseo has
had all of its spaces filled and include lululemon, Elizabeth & Prince, The Estate Collection
and the City's Visitor Center. Recently, the property owner has met with City staff to review
concepts to redesign the Highway 111 frontage, including the former Coco's and KFC
locations. No time frame is set for the renovation of this property.
The Jensen's Center — This property also includes stores that face Highway 111 and El
Paseo. The Highway 111 side of the property has remained stable throughout the
recession. While some vacancies occurred such as Pat's Lighting and RadioShack, they
were immediately filled by Z Pizza and Auto Zone. But in November of 2009, a fire
destroyed portions of the building along El Paseo. All of the businesses but one reopened
along with an expansion by Pastry Swan. The property is currently 100% occupied.
El Paseo Shopping District — The district runs along El Paseo between Highway 74 and
Portola Avenue. Typically each year, there will be a turnover of between 10 to 15 stores in
the district. This happens for various reasons including retirement, lease expiration,
relocation/expansion or lack of sales. During the first part of the recession, that number
doubled and for over a year, very few stores were re -leased. That began to change with
the opening of El Paseo Village in September 2010. Since that time over 50 stores have
opened on the street including Apple, Anthropologie, Sephora, Bang & Olfsen, Roberto
Coin, Eileen Fisher, Kate Spade, Adagio Galleries, Ramey Art, Pizza Vino and many more.
The only large vacancies are a location next to Adagio Galleries that is under final
negotiations; and the former locations of Escada and J. Russell Salon.
Development and leasing at centers continues and staff will bring additional information
forth once formal announcements have been made.
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