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By JOYZELLE DAVIS
Staff Reporter
Ever since he opened his Metro Caf & #233; diner, Sam Amad has wondered why no national retailer has moved into his Mid-Wilshire neighborhood.
“Almost every day I get people asking me if there’s someplace nearby they can buy clothes or appliances basic things like that,” said Amad, whose coffee shop is a block away from the abandoned Ambassador Hotel site.
But there isn’t any place. He refers them to the Beverly Center, which is almost a half-hour drive away.
The Mid-Wilshire market in the heart of Los Angeles is, in fact, one of the city’s most underserved retail districts. Although more than a million people live within three miles of the Ambassador Hotel site at Wilshire Boulevard and Alexandria Street, there are no major retailers for miles around.
A proposal by the ownership group of the Ambassador Hotel property intends to change that. The owners, a partnership led by real estate tycoon Donald Trump, are floating the idea of building a 1-million square foot “power” center consisting of large discount retailers, a supermarket, movie theaters and underground parking on the 23-acre site.
The proposal remains in its early stages, and there are still significant challenges to development. But just the thought of retailers coming to the area has local merchants and community leaders interested.
“They want the job opportunities, the business development and the sales-tax revenue that this project can provide,” said Los Angeles City Councilman Nate Holden.
Now the developers need to get the national retailers interested, as well. Ted Slaught, a broker at Charles Dunn Real Estate Services Inc. who represents the ownership group, says he has received a “very good response” from potential tenants. He said he expects to announce some names before summer.
When talking to national retailers, Slaught pitches the demographics. The average household income is $50,000 within a five-mile radius of the property, he said, thanks in part to the affluent Hancock Park area north of Wilshire and Country Club Park neighborhood off of Olympic Boulevard.
Plus, the 23-acre Ambassasdor site offers something unusual in the developed Mid-City area a large tract of land that gives developers the ability to build the large floor plates and parking requirements that big-box retailers want.
“There’s no other site like this in (urban) L.A. this is a completely different animal,” he said.
But the Mid-Wilshire market itself is a completely different animal for most national retailers. Although it was not the flash point of the 1992 riots, the area was the scene of much of the looting that followed.
“There’s still a perception that the area isn’t safe,” said Marc Pollock, a retail broker with Grubb & Ellis Co. “Once I head further east (than West Hollywood), retailers just aren’t interested.”
Another problem is that big-box retailers typically set up shop in suburban markets making them unfamiliar with the multicultural demographics of the Mid-City market.
Most of the big retailers contacted for this story including Wal-Mart Stores Inc., Best Buy Co. Inc. and Target Stores Inc. did not return calls to discuss the area.
The population in the zip code surrounding the Ambassador Hotel is 39 percent white, 34 percent Asian, 11 percent black and 16 percent “other.” The Hispanic market is about 26 percent of the population, though the Census Bureau has that group scattered across all of the racial categories.
Armando Aguirre, a broker who works the Mid-City retail market for Grubb & Ellis, said that the area’s demographic data often doesn’t sell its potential. He noted that Hispanic families have relatively high discretionary income, in part because several working adults often support a single household.
Expenses like childcare, which eat into a typical yuppie couple’s spending allowance, are taken care of by other members of the family, he said.
“Some of the retailers back East look at the (household income) demographics and think that this market won’t work,” he said. “But there’s much more income available to their customer base than that data shows just take a look at the sales tax receipts for stores in the area.”
The Ratkovich Co. says its retail center, located at the intersection of Wilshire Boulevard and Western Avenue, has been doing “amazing” business since it opened in the fall of 1996, according to Clare DeBriere, senior development manager for the company.
The Ralphs store in the Wilshire-Western center ranks in the top 10 in the store’s nationwide chain, according to a company spokeswoman.
The rest of the center’s tenants Denny’s restaurant, L.A. Cellular, and Deli King, are doing “great” business, DeBriere said, although she declined to disclose sales figures.
Perhaps the foremost obstacle to national retailers entering the Mid-City market has been the land itself. Most of the real estate is parceled among separate owners, making it difficult to assemble a contiguous package.
“It’s a natural market for a lot of these big-box retailers, but they just physically could not move there,” said Jack Kyser, chief economist for the Economic Development Corp. of L.A. County.
A big box retailer typically requires a flat, 8 to 10 acre site. Home Depot is one of the few national retailers to venture into L.A’s urban territory. The Atlanta-based hardware-supply store opened a store in east Hollywood in 1996. The retailer shoe-horned its store into a 6.5-acre site, with parking on the roof.
In the almost two years that the store has been open, it has been doing “fantastic” business, according to Amy Friend, a spokeswoman for Home Depot. She declined to disclose sales figures, but said that the store generates enough business that it is one of only two outlets in the 600-store chain to be open 24 hours.
Home Depot decided to open the Hollywood store in part because its Glendale store was so crowded, and market research showed that many customers were driving from Los Feliz and West Hollywood.
As for the possibility of opening a store on the Ambassador Hotel site, Friend said that market research as well as traffic patterns, land cost and the proximity of competing retailers would play the greatest role in Home Depot’s decision if it were to consider the site.
Noting that the Ambassador Hotel property is within striking distance of the Hancock Park residential neighborhood, Friend said “we certainly wouldn’t rule out” the possibility of locating there.
