The Valley Girl haunt is making a comeback. At one time the quintessential hangout for vacuous, gum-chewing teenage girls, the Sherman Oaks Galleria is being transformed into a contemporary, open-air retail center that could revitalize a run-down stretch of Ventura Boulevard in Sherman Oaks.

History:

The Galleria was supposed to be a retail savior for a stretch of Ventura Boulevard hit hard by regional malls that had been luring shoppers away from the usual mix of mom-and-pop stores. In the end, the Galleria was too small and poorly designed to compete with the mega malls. The shoppers fled, stores shut and the mall languished.

Built in the late ’70s, the relatively modest Galleria was seen as the answer for bringing shoppers back from the large regionals. With a five-screen theater, a Robinsons and a May Co. as co-anchors, it thrived for a time in the ’80s and was immortalized in 1982 in the Frank Zappa song, “Valley Girl,” and in the movie “Fast Times at Ridgemont High.”

Still, the Galleria, with its boxy, fortress-like design,w as never conducive to foot traffic. Then-owners Dai-Ichi Life Insurance Co. and Prudential Insurance Co. tried to reposition the mall as a CityWalk-like retail and entertainment venue, but eventually abandoned the idea.

Concept:

In stepped Douglas Emmett & Co. When it acquired the mall in 1997 for a reported $55 million, the company saw a diamond in the rough. “One thing the Galleria has always had is a tremendous location,” said Mike Keurjian, the project’s general manager. “It’s right next to (the San Diego (405) Freeway) that has a half million cars go by a day.”

By opening the mall to an outdoor plaza and adding a 16-screen theater, a flagship Tower Records store, the Cheesecake Factory and P.F. Chang’s, the Brentwood developer hopes to spruce up the mall that time forgot.

The area already had a strong office component but the developer knew it lacked the amenities to go with it, such as upscale restaurants and a large theater.

The developer cut the retail space in half, to about 300,000 square feet, and doubled office space, to nearly 700,000 square feet. The decision made sense for Douglas Emmett because it now owns office buildings on three of the four corners of Ventura and Sepulveda boulevards.

Financing:

Douglas Emmett, a closely-held private company, won’t divulge how much it is spending on the restoration or how the work is being financed.

Pros and Cons:

Supporters say it brings needed amenities to Sherman Oaks. “If you want to buy clothes or whatever else you can go to the (Sherman Oaks) Fashion Square,” said Sondra Frohlich, the chamber’s executive director. “If you want to dine at Cheesecake Factory or take in a movie you’ll be able to go to the Galleria. There’s a nice contrast between the two centers.”

But some merchants doubt whether the Galleria will attract customers to their stores.

Mitra Nasseh, owner of the Ventura Buffet & Grill, a small restaurant a couple blocks east of the project, is selling her business after 11 years. The Galleria was the final nail in the coffin. “I can’t compete with these big shots,” she said.

Traffic congestion, meanwhile, has always been bad in the area and some fear the new project will make matters worse. Keurjian said his company is streamlining traffic flow into the parking garage and adding valet service.

Outlook:

The project, which is scheduled to be mostly completed by September, is nearly 80 percent leased.

While Warner Bros. has taken 180,000 square feet of Class A space for its animation division, one uncertainty is Tower Records. Faced with declining album sales and a protracted price war with discount houses, the music retail chain has launched a restructuring and is said to be close to filing for bankruptcy.