A 566,000-square-foot outlet mall isn’t the only thing on the drawing board for a 157-acre former landfill site in Carson.
The Carson Reclamation Authority, a city agency that owns the land, has offered plans that call for three times as much commercial space, with a total of 1.8 million square feet of commercial development ranging from retail and entertainment offerings, 350 hotel rooms and approximately 1,500 residential units, according to Kelly McCarty, project executive at Snyder Langston.
The Irvine-based contractor is working on early-stage structural work for the planned outlet mall, which is a joint venture between mall owners Macerich Co., headquartered in Santa Monica, and Indianapolis-based Simon Property Group Inc.
The initial retail project − dubbed the Los Angeles Premium Outlets – will cover about 50 acres of the site, leaving another 100 or so acres for the Carson Reclamation Authority’s larger ambitions.
“The outlet mall project puts Carson on the map,” said Carson Mayor Albert Robles. “We have a central location with proximity to LAX, the 405 and 110 freeways, and something most other cities don’t have around here − available land.”
That’s a switch for the city, according to Robles.
“For many years Carson was used as a dumping ground for trash in L.A. County,” Robles said.
Indeed, the land eyed for the outlet mall and other development also is known as Cal Compact Landfill, which operated from 1959 to 1965. The site has been dormant for years.
That will change on Oct. 4, the scheduled date for a groundbreaking that will kick off work on infrastructure improvements and structural foundation systems for the outlet mall. Work on the retail center itself is expected to start by December 2019, with hopes of opening by fall 2021.
A spokeswoman for Macerich confirmed the outlet mall location on the southwest corner of where the 405 freeway crosses over Del Amo Boulevard in Carson, across from the Porsche Experience Center. She declined to answer further questions, including about the cost of the project, which some media outlets pegged at $400 million. Simon Properties did not return calls for comment.
“To partner up with Simon Property is huge for Macerich,” said David Hinkle, principal at Chicago-based Outlet Resource Group, a retail advisory firm. “Simon Property together with competitor Tanger Factory Outlet Centers [based in Greensboro, N.C.] control about half the national market share for outlet malls, Hinkle said.
Simon’s local properties include its brand name “premium outlets” in Ontario Mills, Camarillo and Orange. It has a market cap of $64 billion and reported 2017 revenue at $5.5 billion, an increase of 1.8 percent compared to 2016. Macerich’s market cap is $8.5 billion, and the company reported 2017 revenue at $1.05 billion, down 2.85 percent compared to 2016.
Local Macerich properties include Westside Pavilion – currently undergoing a renovation – and Santa Monica Place malls, among others. The company has been making a foray into the outlet mall niche over the last few years.
Macerich’s outlet properties include Fashion Outlets of Chicago and Fashion Outlets of Niagara Falls USA; another, Fashion District Philadelphia, is under construction.
The planned outlet mall in Carson would compete with Citadel Outlets in Commerce for customers. Citadel is owned by Newport Beach-based Craig Realty Group, which also owns Outlets at San Clemente.
“When two companies the size of Simon and Macerich join hands, any retail venue in reasonable proximity has to be concerned,” Hinkle said. “These outlet centers perform really well.”
But Los Angeles is fertile ground for more of these types of malls due to its sheer geographic size, its population and its status as a big tourist hub, Hinkle said.
Outlet malls, which usually were located outside city centers, mostly due to radius clauses, are moving closer to metropolitan areas.
There was a time when retailers and brands put radius clauses in lease terms to ensure a certain mileage between retail centers for outlet stores and full-price shops in a bid to avoid cannibalizing revenue.
Those precautions have largely faded, though, and outlets have grown as a niche.
“Carson is ripe for this. High-end retail bargains prove to be lucrative to the outlet customer base, a big chunk of which are millennials and tourists, of which Los Angeles has plenty,” Hinkle said.