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Friday, Jun 24, 2022

Retail Revisited

Westfield Group plans to spend $70 million by next year to upgrade the Westfield Topanga Mall in Woodland Hills. The facelift, in conjunction with the company’s $1.5 billion redevelopment of the nearly vacant Westfield Promenade next door, promises to significantly change the retail map of the Warner Center neighborhood. “This is something our customers have been asking for and we think they will love the results,” Topanga Mall General Manager Molly Unger said in a statement last month. The modernization of the indoor Topanga Mall comes as Westfield, subsidiary of Paris, France-based Unibail-Rodamco-Westfield SE, moves to redevelop Promenade to feature 244,000 square feet of retail space, 629,000 square feet of office space, 1,400 apartments and a 15,000-seat sports facility. For Westfield Executive Vice President of U.S. Development Larry Green, there’s no denying that upgrading the Topanga Mall is a by-product of the developmental excitement exploding all around Woodland Hills’ commercial core. “We certainly like what we see with the Warner Center Specific Plan (2035) and that the localized neighborhood is continuing to get better and better,” Green told the Business Journal. “It’s a precursor to what we will see happen with the former Sears store, which we have planned to commence work on in 2019.” Added Bob Blumenfield, the L.A. city councilman and architect of the Warner Center Specific Plan, which envisions Woodland Hills as Downtown San Fernando Valley: “Westfield has been a good corporate neighbor. I appreciate that they are transparent with community groups and are available to residents to answer questions.” Mall overhaul With the Topanga Mall revitalization, “we thought it was time for a refresh and reconsideration of the property,” Green said, adding that Westfield’s in-house design team is pursuing “a fresh, modern experience.” The company will replace some dated-looking carpeting with tiles and stone floors. It also plans to change the restrooms and play areas. Green said that, on a day-to-day level, construction work at Topanga will not disturb shoppers. “The majority of the renovation work will be done outside of business hours in the evening,” he said. During the recent $500 million overhaul of Taubman Centers’ Beverly Center in West Hollywood, scaffolding and barriers abounded for over a year as crews toiled. “There will be none of that activity (during Topanga Mall’s revamp),” Green said, likening the invisible process to “a group of elves that came and did their merry work overnight.” “Our goal,’ Green added, “is (always to) keep our stores open for business and keep our customers happy.” While countless articles in recent years have declared the death knell of the American shopping mall, in Southern California, the town center experience appears to be thriving, dominated by Westfield, which also has major complexes in Century City and San Diego, and Caruso, which on Sept. 22, added the $200 million Palisades Village in Pacific Palisades to its portfolio of shopping centers. Meanwhile in Porter Ranch, Shapell Properties is developing The Vineyards, a mixed-use town center project with a $150 million price tag. “It’s always interesting to see what others are doing but we think we are setting the industry,” Green said, maintaining that The Village at Topanga outdoor mall added “an experience that wasn’t available in the Valley. We’ve had a lot of people copy that experience.” Yet, as the mall developer builds more retail centers, such as a $900 million expansion of Westfield Valley Fair in Silicon Valley, Green acknowledged that competition has become a healthy driver. “We always learn something from our competitors. You’re never too old to learn,” he said. For example, Westfield will install a fiber optic loop – a digital infrastructure which will become “the backbone running throughout the entire property” to enhance the experience for consumers and merchants, Green said. “A lot of mall operators wouldn’t have the foresight to make that significant investment. For us, it’s imperative that we make it.” Billion-dollar ‘engine’ Westfield Topanga – formerly called Topanga Plaza – first opened its doors on Feb. 10, 1964. At the time, the May Centers Inc.-developed retail center signified California’s first-ever enclosed shopping mall. The property has two levels and 2.1 million square feet of retail at 6600 Topanga Canyon Blvd. with anchor tenants Macy’s, Nordstrom, Neiman Marcus and Target. In 1993, parent company May Department Stores sold May Centers, renamed CenterMark Properties, to a precursor of Westfield Holdings, Ltd. In 1973, Kaiser Aetna opened the Promenade at Woodland Hills, bordered by Oxnard and Erwin streets, as 34 acres of high-end fashion anchored by J. W. Robinson’s, Bullocks Wilshire and Saks Fifth Avenue. However, months before the mall’s first store, Robinson’s, opened, Kaiser Aetna sold the mall to Continental Illinois Properties for about $15 million. In the mid-1990s, the Bullocks stores were folded into the Macy’s brand. Following the 1994 Northridge earthquake, Saks was demolished and replaced with AMC Theatres in 1996. The Promenade continued to change owners — Pan American Properties in 1989; Simon Property Group in 1997 — before predecessor Westfield America Inc. purchased the complex in 1998, renaming it Westfield Shoppingtown Promenade through 2005. By the mid-2000s, the Promenade began to languish. Anchor tenants Barnes & Noble Booksellers and Dick’s Sporting Goods had exited while Macy’s shuttered both stores in 2015. After the Promenade fell into disrepair and vacancy soared, Westfield announced its Promenade 2035 plan to replace the dying mall. The project has a 2020 start date. While Blumenfield of the L.A. City Council supports Promenade 2035, he told the Business Journal that there are a few project details that need examination. “I still have concerns regarding the stadium or concert venue element of their Promenade project and how it will impact the West Valley,” he said. “This is the sort of project that can really push Warner Center forward in terms of serving as the downtown of the West San Fernando Valley, but I need more specifics before I can support it.” Meanwhile, Topanga’s 2015 expansion with outdoor mall The Village at Westfield Topanga was an instant success. “(With) the combined projects, we are the first center in the country to do over $1 billion in annual sales and that is a very significant number,” Green said. “Only a handful (operate) at that level. It is quite an economic engine.” Blumenfield added: “After passing the Warner Center 2035 Plan, one of the first big projects I had to consider in my district was the Westfield Topanga and Village Mall. To make it happen, I had to pass a tax subvention and help clear away bureaucratic hurdles. Over the last few years, it has proven to be the catalytic engine we hoped it would be.” New parent In June, France’s Unibail-Rodamco SE acquired Australian mall owner Westfield Corp. for $24.7 billion including debt. It gave the company a combined portfolio of 102 shopping malls, 13 offices properties and 10 convention centers in Europe and the U.S. Since what the Wall Street Journal called “the largest retail real-estate acquisition ever,” Unibail-Rodamco-Westfield has moved to shed itself of non-essential assets. In July, it sold four Westfield malls in Spain for $565 million. Green said that while Westfield’s in-house culture or management hasn’t changed radically with the European takeover, his company has benefited from its transcontinental ownership. “It allows us to introduce Europe to U.S. (businesses) and U.S. (businesses) to Europe in a more seamless way,” Green said. “It has been pretty energizing for all of us. In Woodland Hills, we might not have had that opportunity if not for the global opportunity.” Green looks forward to the promise of projects based on the 2035 plan in Woodland Hills, which should become a synergistic feeder into Westfield’s commercial prospects. “A lot of years, a lot of effort has set out a vision for the Warner Center,” he said. “Generally speaking, it’s the right type of vision for the Warner Center for the next 20 years. We like the vision.”

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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