Three years ago, Downey city officials took a hard look at their largest retail area, the Stonewood Shopping Center, and concluded that it was sliding dangerously close to economic senility. Downey residents were leaving town to do their shopping.
"What we saw was that Stonewood would continue to decline unless we did something to reverse the trend," said Kenneth Farfsing, assistant city manager in charge of redevelopment. "We felt we needed to do something dramatic."
With a new owner already talking of renovation, the city decided to nudge him into action with a deal: For 12 years after the remodeling, the city would split its share of increased sales tax revenue with the developer. The city also agreed to improve surrounding streets.
Today, Stonewood is like a new mall. Completely enclosed, the once open-air shopping center has a new anchor, the May Co., and a host of new restaurants edging its parking lot. When the remodeling is completed, the mall will have 161 new stores, more than double its original number.
Southeast-area shoppers are bound to see more of such reincarnations. In an area that already has 10 major shopping centers from Long Beach to Montebello and relatively little open space for new malls, the renovation of existing shopping complexes is the likely look of things to come.
"In my opinion, the area is saturated with malls and really couldn't support another one," said Skip Keyzers, senior vice president of MaceRich Corp., which owns the highly successful Lakewood Center Mall.
Larry Norton, Stonewood's general manager, commented, "There are only so many people within a market. You can only split the market so many times."
Of the county's major shopping centers, some of the most and least successful are in the Southeast. Yet at both extremes, refurbishment is being discussed--either to invigorate sales at such aging, badly designed centers as Paddison Square in Norwalk, or to maintain the cash flow at such well-established malls as Los Cerritos Center.
"I would like to see us really consider some revitalization," said Cerritos Mayor Ann B. Joynt, who thinks the 20-year-old regional mall could use a trendier look, a new parking structure, and perhaps a second story of shops.
As Southeast malls get their midlife face lifts, Westside swank is still not for them.
Cerritos officials were thinking of further bolstering their already substantial sales tax base with construction of an upscale mall in Towne Center, the last major vacant tract in the city. But after studying the demographics and income level of the area, a private consultant concluded that there simply was not a market for such high-end stores as Saks Fifth Avenue and Neiman Marcus.
Largely working class and middle class, Southeast is the land of Mervyn's, Broadway and May Co.
If there is an empty shopping niche waiting to be filled, it is for membership warehouse stores such as Price Club and so-called "power centers," which are devoted to anchors selling a single category of goods, such as Home Depot, the building supply store.
Recognizing that, Long Beach city officials are now courting developers to build a power center on a former oil drilling tract near the San Diego Freeway where the city had once envisioned an auto mall.
In the era of sluggish property tax growth that followed Proposition 13's restrictions on increasing property levies, city officials have viewed shopping malls with the same covetous eyes as auto malls. They wooed shopping center developers with redevelopment deals, discounting the price of land for them and building roads. And officials watch sales as if they were shopkeepers.
Without a really successful major mall in the city, Long Beach has long fretted over the way its shoppers go out of town to Lakewood and Cerritos to spend their money. Redevelopment officials are talking of helping Los Altos owners spruce up their drab, 25-year-old shopping center in eastern Long Beach, and the city is also talking to potential buyers of the downtown Long Beach Plaza, again hoping for a remodeling to boost sales.
As the area's big shopping areas struggle to improve their market share or maintain it, they may well face hard times.
"All forecasts--and I'm totally in agreement--are that in the next 10-year period there will be a great shake-out in retailing all over the country," observed Tracey Hall, president of The Hall Olson Marketing Group in Newport Beach. "California is no exception."
Too much retail development, not all of it wise, has left the nation with more than it can handle, say national analysts, some of whom have predicted that as many as half the country's retailers will fail over the next decade.