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Dispute Batters Galleria

Business: Sherman Oaks mall owner seeks to evict its largest tenant, Robinsons-May.

July 17, 1998|GEORGE WHITE | TIMES STAFF WRITER

Sherman Oaks Galleria, famous as the former 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 who is to blame for an exodus of merchants that has turned the San Fernando Valley's shopping mecca of the 1980s into a sea of empty storefronts.

The mall's owners, a partnership led by the Los Angeles-based Douglas Emmett Realty Advisors, charged in a lawsuit that Robinsons-May doesn't adequately staff or stock its two stores in the mall, thus hurting overall business at the shopping 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 Robinsons-May, claims the department store company violated its lease when it waited until three months ago to fully reopen a store damaged in the 1994 Northridge quake. 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 said.

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 said.

Robinsons-May, 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." The suit provided no details and Robinsons-May wouldn't comment.

In its lawsuit, Robinsons-May seeks compensation from the Galleria's owners for money spent on "development, construction, restoration, operation and maintenance" of its two stores before the lease could legally be terminated.

A hearing on the matter in Los Angeles Superior Court on Thursday was continued until July 27. The Galleria's owner wants Robinsons-May out quickly because it plans to redevelop its two stores. Robinsons-May ended up with two anchors in the mall as a result of the merger of the May and Robinson's chains in 1992.

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

Among Galleria merchants, sentiment is with owner Douglas Emmett, a commercial real estate developer who owns no other malls. The merchants blame Robinsons-May for store closures throughout the mall. Most major tenants have left--Gap, Structure, Miller's Outpost and Express. 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 reminiscence about the glory days of the mall--the site for 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."

Los Angeles City Councilman Mike Feuer is eager for the legal dispute to be resolved so Douglas Emmett can move forward with plans to renovate the mall, according to Sharon Mayer, the councilman's chief field deputy.

Mayer said there will be at least several public hearings on the renovation project because of some technical zoning changes that must be made for Douglas Emmett to execute its plans. So far, community protests that haunted previous development proposals for the Galleria have yet to materialize.

Two of the area's key homeowners groups appear to support Douglas Emmett's plans to increase pedestrian access, open up the mall and improve its parking situation, among other changes.

"We realize the Galleria is a white elephant and has to be reconfigured," said Richard Close, president of the Sherman Oaks Homeowners Assn. "There needs to be a new Galleria."

As a result, Close said members of his group support Emmett's plans to convert some of the existing retail space into office space, designed to attract entertainment companies. Close's sentiments were echoed by Homeowners of Encino President Gerald Silver, who has closely followed the Galleria's changing fortunes for years.

Putting in more office space is a good step, Silver said, because it would limit much of the activity generated by the location to weekday business hours.

"We will not oppose the variances and permits they need as long as the project is going in a positive direction," Silver said.

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Times staff writer Julie Tamaki contributed to this story.

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