Ask a resident of South Gate where to shop and they’ll probably point you toward Cerritos.

Retail offerings have been slight in the city of 95,000 about eight miles south of downtown Los Angeles. Its median annual household income is about $42,000, two-thirds of the statewide average. Ninety percent of its residents speak Spanish at home and one-fifth live below the poverty line.

Those demographics have made it difficult to lure retailers, but city leaders expect that dynamic to be reversed, thanks in large part to a $100 million bet taken by downtown L.A.’s Primestor Development Inc.

Primestor last week opened the first phase of a 375,000-square-foot shopping center anchored by a Wal-Mart supercenter. The 32-acre Azalea Shopping Center is touted by the city as the largest commercial development in South Gate in more than 15 years

City Councilman Gil Hurtado said it took several years to get the former vacant lot filled, but the goal was to offer a better retail experience.

“If you ask our residents, ‘Where do you spend your money?’ said Hurtado, “they’ll tell you, ‘Well, we go to Cerritos. We go to Downey,’ because they don’t have anything here. Now that you put a product here, there’s no choice but for people to come in here.”

Arturo Sneider, Primestor’s chief executive, said what attracted his company to South Gate was the size of the lot, which would accommodate a large center that could fill a large number of gaps in the local retail market. The project is expected to be completed by June, but some of the larger tenants had already moved in by last week’s soft opening. In addition to the Wal-Mart, tenants in the first phase include Ross Dress for Less; Marshalls; beauty store Ulta Salon, Cosmetics & Fragrance; Petco; and In-N-Out Burger.

In addition, leases have been signed by Wet Seal, Forever 21, Chipotle Mexican Grill and TGI Friday’s.

The outdoor shopping center will also have water features, a large open plaza and community gathering areas.

Attracting retailers

South Gate’s demographics aren’t daunting for Primestor. In fact, Sneider said the company’s focus has been on developing in mostly urban Latino communities. Other projects include regional shopping centers in Pacoima, Walnut Park, Carson and Bell Gardens.

“Retailers understand the market much better than they did a decade ago and they understand the demand is there,” he said. “It’s typical for them to want to be in larger centers where they collectively generate the kind of traffic that it takes to sort of pump the volume up to justify the investment.”

Sneider, who co-founded the company in 1991 with Leandro Tyberg, its chief operating officer and president, said that attracting major retailers to its shopping centers in lower-income communities has become easier as earlier projects have thrived.

He said creating the right tenant mix also requires input from the surrounding community. Primestor worked with the city of South Gate to organize meetings in advance of developing the site, named for the azalea flower that South Gate adopted as its symbol in 1965. Through resident input they were able to pull in such retailers as Wal-Mart and Michaels Stores, an arts and crafts chain.

Hurtado, who served as mayor through much of the approval process, said the center is projected to generate about $2.5 million in revenue per year for the city, which has a $120 million annual budget. It will generate about 800 jobs in a community with a 13 percent unemployment rate.

“We put in the contract that the center would shoot for at least 30 percent of the employees from South Gate,” he said.“I run a youth program here, and one of the board members couldn’t find a job for two years. Now, she’s working here at the Wal-Mart.”

Scandal and recovery

The opening of the Azalea center is seen as contributing not just to an economic revitalization of the city, but also a chance to burnish an image that was tainted in a corruption scandal it faced in the early 2000s.

Its former treasurer, Albert Robles, was convicted of soliciting more than $1.8 million in bribes in 2005, a time when the city was $150 million in debt.

Hurtado, who has lived in the city for 30 years, said when he joined the council nine years ago it was difficult to take on projects because there wasn’t enough money.

But in the last five years, he said that the City Council has brought in $15 million in grants and given residents soccer fields and parks, including a dog park.

“We have stuff for children, for seniors and even dogs here,” he said. “We just made so many moves throughout the last few years, and I think the community has helped us quite a bit.”

Hurtado said with the opening of the Azalea center, the city will have an easier time attracting additional retailers, citing the difficulty it faced several years ago in convincing Seattle coffee company Starbucks Corp. to open its first location there.

“All communities are different,” he said. “You have different education levels. You have different incomes, but we all have needs. People want to go shopping, even people that don’t have a lot of income.”