SM could take a page from Boulder’s book
SANTA MONICA PLACE — As community members ponder what might replace Robinsons-May and the rest of Santa Monica Place, a recent proposal for a Wal-Mart to be built in Boulder, Colo., is causing local residents to ponder what might be in store.
Federated Department Stores, Inc., which owns Macy’s, announced last Thursday it will sell 68 “duplicate” stores in malls occupied by both Macy’s and Robinsons-May as the result of a merger. Federated representatives said the Robinsons-May store at Santa Monica Place will likely be sold off in 2006.
Santa Monica Place, the indoor shopping mall located between Second and Fourth streets and Broadway and Colorado Avenue, is anchored by dual department stores Macy’s and Robinsons-May — the latter occupying 137,000 square feet of retail space.
The news comes on the heels of redevelopment plans still underway at Santa Monica Place. Meanwhile, Colorado news articles are reporting Wal-Mart may serve as the anchor for Boulder’s 60-acre Crossroads Mall, a struggling shopping center owned by Macerich, the same company which owns Santa Monica Place.
Some Boulder residents contend the big box store may “Wal-Martize” their city, while store owners claim the new retail location would be “the most unique in the world,” a “Boulderized” version of Wal-Mart.
Both Boulder and Santa Monica are affluent and pedestrian-oriented, with similar populations. They are municipal islands surrounded by larger metropolitan areas — Denver and Los Angeles, respectively — and like Santa Monica Place, Boulder’s mall is intended to be a big draw for regional shoppers.
Macerich, a Santa-Monica based company, is one of the largest owners and operators of retail malls from coast to coast. In a recent earning report issued by Bloomberg financial news, Macerich was listed as having a one-year return of 46.9 percent on its stock.
Macerich continues to be a voracious competitor in its market. In May, it bought an ownership stake in Westcor, an Arizona-based shopping mall chain with facilities throughout the Grand Canyon State, Nevada and California, Bloomfield News recently reported.
Randy Brant, senior vice president of development leasing for Macerich, said the loss of Robinsons-May could play a pivotal role in re-development plans for Santa Monica’s indoor shopping mall.
Rob York, a financial analyst familiar with downtown business issues, said it would be in Macerich’s best interest if it could purchase Robinsons-May from Federated, to have more control over what might be placed there.
Although York said it might work well locally for Macerich if it were able to buy Robinsons-May from Federated, he also noted that both companies were so big that such a purchase may not work in their overall picture.
Brant said what’s at issue for re-development scenarios at Santa Monica Place was whether Macerich could keep or remove the two above-ground parking garages currently in place. If it were possible to put the parking structures underground, Macerich would have more options in how it is able to use the site.
“If we are not successful in negotiating the tear-down/underground parking concept, Macerich would prefer to see a fashion department store, like Nordstroms, replace Rob-May,” Brant said.
If the parking were put underground, Brant said there may be room for a big box store, such as Wal-Mart.
“I don’t believe a Wal-Mart would work in the (Rob-May) location and am not sure Wal-Mart makes sense in downtown Santa Monica in a remodel situation,” Brant said. “In a complete overhaul, a large box-format retailer could work, but not if you are forced to work within the parameters of the footprint of the Rob- May building.”
Brant said the ability for Macerich to move forward with a larger overhaul would depend largely on support from the City Council and the local community.
According to Brant, the indoor shopping mall needs to be re-developed because it was based on an old, outdated suburban model that does not compete well with shops on the Third Street Promenade.
The question of what kind of development should replace Santa Monica Place is one the city has been grappling with in recent years.
The City Council scrapped a proposed development to replace Santa Monica Place last year due to controversy about the height of high-rise buildings that were slated for the site. If implemented, the project would have demolished the existing mall and erected three 21-story residential towers, an eight-story office building and an eight-story apartment building. Those buildings were to be built on top of a new outdoor mall, which developers described as a natural extension of the Third Street Promenade, to include underground parking.
Macerich has called public comment from workshops, surveys and other outreach in order for consultants to come up with proposals to help “re-imagine” Santa Monica Place.
Alternative proposals were supposed to be presented publicly this summer, followed up by presentations to City Hall this fall with the hopes of approval. So far, there have been no proposals presented.
Brant did not comment on why redevelopment proposals are not yet coming forward. He did say Macerich still lacked an economic model by which it would base its re-development plans.
City Councilman Bobby Shriver said the city of Santa Monica might also look into buying the Robinsons-May building from Federated.
Shriver, who said he “gasped” when he saw the size of the towers slated for the original proposal, said that if City Hall purchased the Federated building, it may provide the community with more leverage in dealing with re-development outcomes.
“It would change the economics of the development,” Shriver said. “We could reduce the size of the project, or trade the building with Sears.
“It’s just an idea.” Shriver said he has not discussed this idea with the council or Macerich and was merely trying to approach the issue from an entrepreneurial perspective, having noted any project that does move forward he would like to be built at a reasonable scale.
Originally published in the Santa Monica Daily Press print edition on August 6, 2005. Read the original PDF.