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Tuesday, Jul 5, 2022

For Whom the Registers Toll: Tale of Two Malls at Rebuilt Galleria

For Whom the Registers Toll: Tale of Two Malls at Rebuilt Galleria

By DANNY KING

Staff Reporter

At the Sherman Oaks Galleria, it hasn’t been fast times for everybody.

A year after its $50 million reconfiguration, the San Fernando Valley icon, immortalized in the song “Valley Girl” and the movie “Fast Times at Ridgemont High,” has performed with decidedly mixed results.

Restaurants like Cheesecake Factory and P.F. Chang’s China Bistro do brisk business at the Ventura Boulevard frontage of the complex, whose rebuilt mall and adjoining office tower total 1 million square feet.

But things are quieter toward the back and off-street level at the 300,000 square foot mall, where empty storefronts are interspersed among smaller restaurants, and store owners lament the lack of off-site visitors and the challenges of a parking lot in the far rear of the property.

“The Cheesecake, like everywhere else, is an hour-and-a-half wait,” said Matthew May, president of May Realty Advisors. “But for the retailers, the distance from parking to the stores is tremendous.”

Led by the Cheesecake Factory, the center’s nine eateries, which also include full service operations like Prego Ristorante and Fuddruckers as well as quick service establishments like Quizno’s and Hana Grill, average more than $500 a square foot in annualized sales, according to Mike Keurjian, general manager of the Galleria, who declined to estimate sales per square foot for the center as a whole.

Last year, indoor malls as a group averaged $336 a foot in annualized sales, according to the International Council of Shopping Centers.

Still, the center remains about 25 percent vacant, with one food operator Cupid’s Hot Dogs shutting down in October, months after its post-renovation opening. An additional 12,000 square feet will come on the market when the L.A. Department of Water and Power shuts down its temporary Owens Valley Aqueduct exhibit in the space behind the Cheesecake Factory.

“We had anticipated to be a little further along,” said Allen Young, senior vice president at CB Richard Ellis and leasing agent for the Galleria. “The same things you’ve heard about everywhere else have affected us.”

Officials of the mall’s owner, Santa Monica-based Douglas Emmett declined comment.

Spotty performance

Aside from Cheesecake and the two-story Tower Records, the primary draw to the Galleria is the Pacific Theatres Galleria 16. The 16-screen theater grossed $117,000 for the week ended Dec. 5, out-grossing the $55,000 tallied by its nearest competitor, AMC Sherman Oaks, according to box office tracking firm Reel Source Inc. The county’s two leading cinema complexes, Pacific Theatres at the Grove and Bridge Cinema de Lux at the Promenade at Howard Hughes Center, brought in $221,000 and $190,000 respectively for the same week.

But Jaspreet Singh was less than enthusiastic when describing business at his Ben & Jerry’s.

“It’s hard to say,” said Singh, who bought the store four months ago. “August was wonderful. But it’s too early for me to say anything.”

The 8,000-square-foot Prego across from Tower is doing “okay” business, according to Keurjian. Officials from Prego parent Spectrum Foods Inc. declined comment.

And while P.F. Chang’s sales are close to its companywide average of about $5 million annually, its performance doesn’t stand out among regional locations.

“It’s not as strong as some of our other Southern California locations, but we hope it gets better,” said spokeswoman Laura Cherry.

Developed as a classic, department store-anchored indoor mall and office tower in the late 1970s, the Galleria, which initially consisted of a 500,000 square feet of retail and 500,000 square-feet of offices, was bought by Douglas Emmett in 1997 for an estimated $55 million.

The investment and development company invested an additional $50 million turning the complex into an indoor/outdoor entertainment center, turning 200,000 square feet of mall space formerly occupied by Robinsons-May into offices. The Galleria’s offices are about 80 percent leased, according to Keurjian.

“The vast majority of our business comes from people that are on site or across the street,” said Rick Chancellor, president of Manhattan Beach-based Robeks-Fruit Smoothies & Healthy Eats, whose Galleria store is doing “better than average” business. “We’re not getting that much business from people coming in, parking and leaving. There’s not the convenience aspect there that lends itself to that.”

That hasn’t proven to be a problem for the Galleria’s Burke Williams day spa or the 24 Hour Fitness, which Keurjian said were both exceeding expectations.

“It’s been an exciting run,” said Derrick Worthy, general manager of 24 Hour Fitness, of the center’s business since its April opening. New membership levels have consistently exceeded monthly projections by about 10 percent, according to Worthy. “Being inside the Galleria has made business stronger,” he said.

Attracting customers from outside the complex will not get any easier in 2004 when the offramp from the San Diego (405) freeway is closed as part of the $39 million upgrade of the interchange with the Ventura (101) freeway just northwest of the Galleria. The nine-month closure of the nearby Greenleaf Street off-ramp will force northbound 405 travelers to get off at Mulholland Drive or Burbank Boulevard, each more than a mile from the Galleria.

“I don’t think it has affected us,” said Keurjian of the ongoing Caltrans work. “We have so many ways to get in and out of this project.”

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