A walk in the heart of Westwood Village reveals storefront after storefront of vacant retail space about a quarter of shops on one stretch of Westwood Boulevard are empty.

But the same jaunt one block east on Glendon Avenue reveals something else — construction activity.

A handful of key real estate projects are in varying stages of completion, including the $300 million Palazzo mixed-use development, a forthcoming retail project and a planned boutique hotel.

The bustle of construction comes after years of disregard by developers and is being seen by many business owners as a chance to revitalize the village, which has seen its retail wane since the community’s heyday in the 1980s.

“Westwood as far as I’m concerned is a unique place in Los Angeles, it’s a shopping and pedestrian district like none other,” said Kam Hekmat, a local real estate developer who owns the village’s Center West office building and the Murdock Plaza office tower, among other properties. “There is a lot of potential. (But) Westwood retail needs to come back.”

The Palazzo development on Glendon Avenue is the largest of the bunch. It will include 350 luxury apartment units, 50,000 square feet of retail space and more than 500 public parking spaces. The 4.3-acre project, which is being developed by Beverly Hills-based Casden Properties Inc., is slated to open June 1.

Also, another Beverly Hills-based developer is planning a retail project on the site of the recently torn down Mann National movie theaters. And Hekmat, himself, is promising to soon unveil his own plans for a mixed-use complex with a hotel.

Suzanne Laff, a retail broker and senior vice president for Beitler Commercial Realty Services who has worked the Westwood market for 15 years, believes the developments, especially the Palazzo, could mark a turning point.

“I believe it is a tremendous catalyst for improvement,” said Laff. “I envision Westwood Village to be really what it is: a service to the community it surrounds, a service to the university and yet also an attraction for people in West L.A. It was that at one time and it should be again.”

Nothing but traffic

Although the traffic around Westwood is virtual gridlock during the rush hour, the village is no longer the retail and entertainment destination it once was before its steady decline in the 1990s.

Real estate professionals cite a variety of reasons for the enclave’s lackluster retail market, which in recent years has chewed up and spit out not just small businesses but chains like Circuit City and Hollywood Video.

Most famously there was the 1988 fatal shooting of a 27-year-old woman who was caught in the crossfire of a gang shootout on a busy Saturday night. That thinned the crowds of young partygoers who flocked to the neighborhood on weekends. Some say that powerful neighborhood councils in nearby Holmby Hills and Bel-Air exert too much control over what sort of businesses can come into the village. Still others note UCLA has added so many quality campus stores that students don’t feel a need to venture into the community.

Then there’s the growth of alternative destinations, such as Santa Monica’s Third Street Promenade, Pasadena’s Old Town and more recently The Grove shopping center. Most agree that it’s likely an assortment of woes has led to the downturn.

“It would take a lot of effort from the standpoint of owners in the village as well as neighboring residents, UCLA, and office building owners on Wilshire to cooperate and make Westwood come back,” Hekmat said.

The project being developed by Casden Properties the company headed by billionaire Alan Casden would appear to address several of the longstanding complaints about the village.

Westwood boosters and critics alike say that a lack of accessible public parking deters shoppers and the addition of hundreds of residents living at the Palazzo project could infuse the moribund retail community with new life.

“I think there’s been a lot of demand that hasn’t been satisfied in Westwood and this will bring people back to the village,” said Casden spokeswoman Barbara Casey.

It’s almost ironic that the project is so highly anticipated it sits on a property that had been the subject of multiple development plays over the years. And Casden had a bitter battle over the site for years with community groups that feared overdevelopment.

“I think what happened was Casden spent a lot of time working with homeowners groups there, which are very powerful, and he worked with the City Council office to create something that would really be a catalyst,” Casey said.

The development includes a host of amenities including a gym, infinity pool and business center. It also has a full slate of retail tenants, including Trader Joe’s, Rite Aid and It’s A Grind coffee shop. And because the residential portion of the project is high-end one-bedroom rentals start at $2,750 per month and townhomes start at $4,910 there is hope that Palazzo dwellers will start spending their money in the village.

“One of the greatest appeals is the quality of life. You can walk to world-class doctors at UCLA. It’s not just the shopping, movies and restaurants,” Casey said. “Look at the office buildings along Wilshire if you wanted to walk to work. There are a lot of people now looking at quality of life and a lot of that is being able to get out of your car.”

Area confidence

Perhaps encouraged by the forthcoming Palazzo, at least one other developer isn’t scared of building more retail space in Westwood. Beverly Hills-based Simms Commercial Development is planning a 10,500-square-foot retail project at the corner of Lindbrook Drive and Gayley Avenue where the Mann National movie theater was recently razed.

The one-story retail project would include parking on the roof and could break ground by the end of the year. Ron Simms, who heads his namesake company, declined to comment.

And Hekmat, who owns retail buildings on the main boulevard, said he has his own plans for a mixed-use project that would include a boutique hotel and retail space at 10844-10852 Lindbrook Drive. Hekmat doesn’t want to talk specifics, but he razed a building on the property recently and said his development could break ground by the end of the year.

Meanwhile, Topa Management Co., billionaire John Anderson’s residential and commercial real estate company, remains heavily invested in the village. In 2002, Anderson’s company bought over 150,000 square feet of retail properties, including several buildings along the main boulevard.

Anderson said that he has “a number of empty buildings” but is happy about forthcoming developments in the area. The company has a total of about 15,000 square feet of retail space available at three locations on Westwood Boulevard, according to Topa’s Web site.

Laff, who is marketing about 2,000 square feet of retail space at 1045 Westwood Blvd., said that Westwood retail space is a bargain compared to nearby areas. She said that retail space can be had in the $3 to $4 per square foot per month range compared to at least $12 per square foot in Beverly Hills.

“I’ve talked to the landlords on Westwood Boulevard and they are willing to offer concessions to attract the right tenancies,” she said.

One final issue is how the area’s office market stands to benefit from the development.

The office vacancy rate in the 3.1 million-square-foot Westwood office market was 7 percent in fourth quarter, up from 6.6 percent a year earlier. But on the flip side, rents have increased dramatically in the last year. The average asking rent for Class A space was $6.05 in the fourth quarter, up from $3.87 a year earlier, according to Grubb & Ellis Co.

That increase mirrors the dramatic rental rate surges in other Westside areas. But Westwood remains cheaper than submarkets such as Century City and Santa Monica and landlords would like to go even higher.

Hekmat, who still owns the 22-story Center West building he developed in 1990, recently doubled down in the area: Last fall he spent $130 million to purchase Murdock Plaza from New York-based seller Sumitomo Life Realty Inc.

The 17-story brick office building was developed by billionaire investor David Murdock, who still has an office there along with Eli Broad and Richard Riordan. A vibrant retail district, Hekmat said, could help raise rents to where they ought to go.

“They are somewhat higher than they used to be, but still it is a lesser market in rents than some buildings in Santa Monica and in Century City,” he said. “That is good critical mass being generated and that should help.”