Retailers See Benefit, Threat In Re-emergence of Galleria

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Retailers See Benefit, Threat In Re-emergence of Galleria

By AMANDA BRONSTAD

Staff Reporter





Jamie Alba, owner of Sisley Italian Kitchen, looks with concern across the street at the long lines forming outside The Cheesecake Factory in the Sherman Oaks Galleria.

Once the celebrated home of Valley Girl culture, the Galleria fell on hard times for much of the 1990s, only to be redeveloped by Douglas Emmett & Co., which bought the building for an estimated $55 million in 1997.

With 700,000 square feet of office space and another 300,000 of retail including a 16-screen Pacific Theatres movie theater and a giant Tower Records store Douglas Emmett is positioning the renovated mall to become more of a destination than in its first heyday.

But the center already is causing some headaches in the neighborhood. While Alba said his traffic is up, other nearby businesses seem to be suffering.

“The restaurants on either side of the Boulevard are getting killed,” said Alba, who noted that he was approached by brokers trying to lure him to sites recently vacated on Ventura west of the mall.

The area has seen retailers come and go since it was first developed in the late 1950s. That’s when Ventura Boulevard was nothing but foliage, a couple of hot dog stands and a drug store at the Southwest corner of Ventura and Sepulveda boulevards.

Around that time, an independent real estate agent sold a tract of land that eventually became the original Galleria. After the Encino Knolls subdivision added 65 new families to the area, a couple of shopping centers began to prop up.

“Historically, Encino and Sherman Oaks were bedroom communities to Los Angeles,” said L.A. City Councilman Jack Weiss, who represents the 5th District.

While the new Sherman Oaks Galleria attracts younger crowds, long-time residents of the area continue to frequent the Boulevard. That includes Tiger Palmer, owner of Palmer Realty.

“I have one place I don’t even order at,” he said. “The waitress tells me what I want. I’ve been going to that place because it’s nearby to the office and the food is good. The mom-and-pop shop will be successful as long as it serves good food and the prices are usually low.”

Weiss, for one, said he’s encouraged by the mix of large and small retailers. “What’s healthy for that area is to ensure we continue to have a mix, because one of the amenities of living in Sherman Oaks and Encino has been access to sole proprietorship on the boulevard.”

Douglas Emmett and commercial brokers see the new Galleria as a way to drum up additional business for all those in the region.

“We decided not to compete but to complement with entertainment and food,” said Allen Young, senior vice president of CB Richard Ellis, of leasing efforts along the boulevard. “In this area, there’s never been anything of any consequence. There was the Galleria and (its) fast food court, but none of the restaurants ever did anything. There’s not a lot of competition, and we won’t be getting entitlements (for new large projects) anywhere up and down the boulevard.”

Cutting Congestion

Even so, some business owners are concerned that they will be shunted aside. Santo Selvaggio, general manager of Posto farther down the Boulevard, said the 10-year-old eatery stopped serving its $19 to $27 lunch because that crowd wasn’t there anymore.

“Posto is more of a fine dining establishment,” he said. “We are a little bit pricey for the Valley. We decided at this time we’d concentrate on dinner.”

Vito Clemente, of Vito’s from Sicily, a mom-and-pop restaurant on Sepulveda behind Sisley’s, said his own lunch crowd has been cut in half.

“We are a small business; we’ve been here for 35 years,” Clemente said. “People just forget about us, and they’ll go over there. Everything is fresh and new, and we’re going to get hurt. It’s convenience, convenience, convenience.”

He expects the crowds to return when the newness wears off, in the next six months or so, but is wary of the potential disruption from massive freeway work over the next few years. “If they’re hurting now, you can imagine once they go into construction,” he said.

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