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Thursday, Jul 7, 2022

RETAIL—Communities Count on Success of Major Retail Projects

Pasadena, Hollywood, Long Beach, Fairfax, Sherman Oaks they each are counting on a major commercial/retail development to open in the coming months that could dramatically reshape their communities.

There’s nothing like a new shopping center to generate crowds and business. Look no further than Santa Monica’s Third Street Promenade as an example of how a retail development can transform a community for better and worse.

But first, you have to convince people that the revived area is worth patronizing and in the case of places like Hollywood, that could still take some doing. Even a success story like Santa Monica can wreak unintended consequences, such as major traffic congestion.

All five projects are modeled, at least in part, on the success of the Third Street Promenade, and they are sure to provide immediate boosts in interest and foot traffic. But will early curiosity shoppers become regular customers?

A softening economy and an already over-stored region doesn’t help prospects. Nor does the still-decrepit state of several of the locations, especially Hollywood and Long Beach.

“Our vision has always centered on the notion that there are 8 million to 10 million people that come to Hollywood Boulevard every year,” said Alberta Davidson, senior vice president of marketing for TrizecHahn Development Corp. “Those people are staying on average no more than 20 minutes.”

The Hollywood & Highland development, even with its flashy entertainment themes, won’t suddenly extend those visits, Davidson conceded. Perceptions change gradually when it comes to a grungy neighborhood. With fewer than six months before opening day, the sleek project still fronts a melange of tacky souvenir shops, fast-food joints and tattoo parlors not quite the neighbors they’re hoping for.

Larry Kosmont, a partner in real estate consulting firm Kosmont Partners, said each of the major projects reflects a growing development trend focused on creating foot traffic while building retail, rather than building retail because of foot traffic.

“It sends a message out to retail developers and investors, ‘You need to change your mix,'” Kosmont said. “The community-oriented destination center is in. It’s going to need to be open and be exciting.”

Open is what the Sherman Oaks Galleria will be after years of its uninviting, fortress-like presence at Ventura and Sepulveda boulevards.

Paseo Colorado in Pasadena is a similar project, where TrizecHahn has demolished a fortlike inside mall and is replacing it with a 565,000-square-foot outdoor shopping project with office space and residential units.

The Farmers Market renovation brings together heavy-hitting national retailers with mom-and-pop merchants creating an inviting place for locals and tourists alike.

What all five have in common is that their success will largely depend on how well they fit into their surroundings.

Hollywood & Highland will bring significantly more traffic into an already congested area, Kosmont conceded, but the synchronization of traffic lights and access to the subway and buses should minimize the impact.

As for Farmers Market, Kosmont expects an overhaul of the community.

“The Farmers Market is a down payment in urbanization for that area,” he said. “I think you’ll see that neighborhood turn over. That has been a neighborhood that has been quiet for some time. There’s going to be some gentrification.”

As the retail landscape changes with each new generation’s fresh interests and shopping habits, so will the communities around them. In another 20 years, developers might be building domes over their pedestrian shopping centers.

For now, however, out is in.

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