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New Look for Malls Accentuate Social Vibes

August numbers from the U.S. Commerce Department showed that nationwide spending on retail construction, including renovations, was down 24.3 percent from a year ago.

Even though the Great Recession reportedly ended months ago, cautious retailers and shopping center developers are generally holding back on new projects as skittish consumers keep their spending in check.

Still, there are several instances where operators are in the midst of major renovations to bring their centers up-to-date. That’s the case with three prominent and popular San Diego shopping hubs, ranging in age from 21 to 41 years old, that are modernizing to retain loyal shoppers and attract new visitors and merchants.

They’re all making multimillion-dollar investments to streamline traffic and parking, boost merchant offerings, and make their properties more social and pedestrian-friendly, among other priorities.

“When a center reaches the twenty-year mark, you check to see what’s working well, and what could be working better,” said Elizabeth Schreiber, vice president and general manager of Costa Mesa-based Donahue Schriber, owner and operator of Del Mar Highlands Town Center.

The 32-acre center, first developed in 1989 at Del Mar Heights Road and El Camino Real in San Diego’s Carmel Valley area, embarked earlier this year on a $20 million renovation.

Space to Park, Walk, Relax

Set for completion around June 2011, the center will include a complete redesign of storefronts and signage, a reconfiguring of driveways, and the replacement of many of the center’s compact-car parking spaces with larger spots — a bow to the now ubiquitous SUVs that hadn’t yet hit the auto scene when the center first opened.

Operators are adding walkable outdoor gathering and relaxation areas, and new stairways, escalators and elevators will be installed. The center’s UltraStar Cinemas movie theater will close in January for what will be a six-month overhaul, with complete replacement of its auditorium seats, lobbies, sound and projection systems.

By the time the renovation is complete, at least three new eateries will have joined the center: burger restaurant The Counter, a Swirls frozen-yogurt shop, and the newest location of locally based Rimel’s Rotisserie.

Major change is also in the works to the north at another Carmel Valley mainstay, Flower Hill Promenade, built in 1977 on the site of former flower fields near Interstate 5. Owner Protea Properties has proposed an overhaul, expected to cost between $25 million and $30 million, which will include a complete reconfiguring of its building and driveway layouts, and the addition of a new parking structure.

The center would also include a new 30,000-square-foot Whole Foods Market when work is completed in 2012. Currently under review by city planning agencies, the project recently received the blessing of the Carmel Valley Community Planning Board, a citizens’ group that advises the San Diego City Council.

“The idea is to bring in some additional uses and address some needs that had been identified in the community,” said M. Rose Jabin, property manager of the Flower Hill center.

Community Input

The 14-acre center will also have a courtyard for community gathering, and there will be additional office and retail space. Operators have met several times with community members to address concerns and make revisions to the project, and one result is that Flower Hill’s UltraStar Cinemas will eventually be moving out, as the center looks to reduce traffic volume and free up parking spaces for other businesses.

In San Diego’s Mission Valley, work began in July on a $15 million, 14-month renovation of Fashion Valley, among the region’s largest and most visited shopping malls. It was built in 1969 on Friars Road, and has been operated for the past several years by Indiana-based Simon Property Group Inc.

In the mall’s first significant refurbishing in 13 years, set to be completed by the end of September 2011, Simon is overhauling interiors and exteriors, replacing furniture and adding skylights to the food court. Landscaping is being updated with new palm trees and planters, and “soft seating” will be added in common areas, with chairs and couches to help visitors relax and socialize.

Francine Miley, Fashion Valley’s director of marketing and business development, noted that the open-air center in recent years has attracted about 18 million visitors annually, including a large contingent of tourists. Even as shoppers everywhere have cut back on spending during the past two years, overall foot traffic at Fashion Valley held steady, suggesting that the mall has become as much a social and recreational destination as a purchasing venue.

Many of the mall’s renovations are designed to keep it competitive and attractive by responding to the social aspects of shopping. “Sometimes people do want to just get out of the house, away from the cabin fever and just be somewhere else, whether or not they’re going to spend money,” Miley said.

Changes under way at the local centers are also attracting new tenants. Eighteen-year restaurant industry veteran Matt Rimel was ecstatic when operators of Del Mar Highlands approached him about locating in the center as part of its renovation.

With his business partners, he plans to open his fifth location of Rimel’s Rotisserie in June. He had been waiting several years for a good-sized spot to open up near the center’s movie theaters and the adjacent Sammy’s Woodfired Pizza.

“The family demographics for that area are outstanding, and it has a really strong business lunch crowd,” Rimel said.

Visitors Request More Restaurants

Before starting the renovation at Del Mar Highlands, Schreiber said operators conducted consumer surveys, asking about 350 customers what merchants and amenities they’d like to see. The responses included a desire for more sit-down restaurants.

Operators used other feedback to better address the needs of the workers who occupy nearby office buildings and frequent the center, as well as customers among the approximately 15,000 residents who live within a three-mile radius, Schreiber said.

Elsewhere in San Diego County, shopping center rehabs are less dramatic but reflect changes happening as operators fill spaces vacated during the recession.

Jim Connelly, managing principal of Nadel Architects in San Diego, said he has been getting increasing requests in recent months to design spaces for local and regional merchants who are filling spots left empty by big national retailers.

For instance, his firm redesigned a space vacated by an Albertsons supermarket in Chula Vista, which is now home to Seafood City, a regional ethnic market, along with related, locally owned businesses serving the neighborhood.

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