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Not So Sure . . . : Galleria Merchant, Owners in Battle Over Lost Business

July 17, 1998|GEORGE WHITE | TIMES STAFF WRITER

Sherman Oaks Galleria, once famous as the hangout of shopaholic Valley Girls, is involved in a legal dispute between its owner and Robinsons-May, its largest tenant.

The two sides are bickering over which is to blame for an exodus of merchants that has turned the San Fernando Valley shopping mecca of the 1980s into a vista of empty storefronts.

The mall's owners, a partnership led by Douglas Emmett Realty Advisors of Los Angeles, charges in a lawsuit that Robinsons-May, a unit of May Department Stores of St. Louis, does not adequately staff or stock its two stores in the mall, thus hurting overall business at the center. Because Robinsons-May occupies the mall's two anchor locations, it plays a critical role in drawing customers to the mall.

Douglas Emmett, which is trying to evict Robinson-May, claims May violated its lease when it waited until three months ago to fully reopen a store damaged in the 1994 Northridge earthquake. The prolonged closure of the third floor of the Robinsons-May in the mall's south wing drove out small merchants on that floor, the suit says.

The alleged "unauthorized closure" was particularly harmful to the mall because "virtually all the mall tenants located adjacent to the closed third floor . . . have vacated the mall due to lack of customer traffic," the suit says.

May Department Stores, which denies the allegations, has filed its own lawsuit against Douglas Emmett. It alleges that the mall owners violated the lease when they "failed to operate . . . in a manner which attracts retail customers and tenants to the Galleria." Court papers provide no details and May Department Stores wouldn't comment on the suit.

May's suit contends that the Galleria's owners must compensate it for money spent on "development, construction, restoration, operation and maintenance" of its two stores before the mall owners can legally terminate the lease.

A hearing on the dispute in Los Angeles Superior Court on Thursday was continued until July 27.

The Galleria's owners want Robinsons-May out quickly so they can redevelop the space the two stores occupy. (The mall ended up with two Robinsons-May stores when May Department Stores merged its May Co. and Robinson's chains in 1992.)

The plan calls for replacing the two department stores with office space, a movie theater and small shops. The Robinsons-May at the north end of the mall would be the site of the theater, restaurants and smaller shops. The Robinsons-May at the south end would be converted into office space.

Among many Galleria merchants, sentiment is with owner Douglas Emmett, a commercial real estate developer that owns no other malls. Many merchants blame May Department Stores for store closures throughout the mall. Most major tenants have left--Gap, Structure, Miller's Outpost and Express among them. Many of the departures have occurred this year, and the Galleria is now more than 60% vacant.

Some of the mall's remaining merchants say they are losing money. Some longtime tenants wistfully recall the glory days of the mall, which was the site of scenes in movies such as "Fast Times at Ridgemont High" and "Valley Girl."

"This was a great mall 10 years ago, but lately there have been times when I haven't seen a customer for five consecutive days," said Harry Sahelian, owner of the Buccaneer Smoke Shop.

The owner of Howick's Fine Gifts & Jewelry, Fuat Sucu, said he spends much of his time playing solitaire on his computer's card-game program.

"This is draining financially and emotionally," he said. "Everyone has a limit, and I can go on only so far."

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Times staff writer Julie Tamaki contributed to this report.

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