While downtown San Diego was struggling to find its urban identity during the past two decades, Horton Plaza served as a catalyst for what could be. Now, coupled with Petco Park , forming the “two large sisters” as one downtown denizen calls them , this once cutting-edge shopping emporium also is trying to find its way.
Now known as Westfield Horton Plaza, the two decades old, multilevel mall is being primed to meet the challenges of an evolving market downtown. While the details are still being worked out, the plaza’s General Manager Leslie Cusworth shared some of the thinking that is driving the process.
“It’s an exciting time for Westfield, and downtown in general, with all the growth,” she observed. “It used to be easy to dominate the market, but we can’t rely only on tourism anymore. There are many residents now, and we have to reach out to them.”
According to Centre City Development Corp., which oversees downtown redevelopment for the city, this urban hub now is home to 30,000 residents, and is expected to grow to almost 90,000 by the year 2030.
To accommodate the needs of this growing population, Westfield is considering a more open connection to the vibrant vibes and foot traffic that now dominate downtown.
“We want to be able to re-energize our Fourth Avenue entrance and reconnect it to the community in the Gaslamp,” said Cusworth. “We have many entitlements for additional square footage, and we are working on a development plan. We are evaluating numerous opportunities for the property , shops and new formats, entertainment, fine dining and the streetscape.”
Go With The Flow
One major change for the mall, which opened Aug. 9, 1985, will be the introduction of automated parking in its garages, now staffed by “ambassadors,” who collect parking fees.
“This will help the (traffic) flow,” said Cusworth. “It will be similar to the airport. You just put your credit card in, pay and go.”
The new system is planned to kick in at year’s end, but the attendants will continue to be on hand, at least for the short term, to give customers a choice, she said.
“Westfield is always looking at ways to explore what works best for the customer,” said Cusworth. “We’re not the only game in town, anymore. We have to grow with the times. We have to decide what are the best uses to integrate Horton Plaza with the community, and keep the center energized.”
The tenant mix of the mall also continues to evolve. Coming in mid-September, and tapping into a high-end customer base, Whittard of Chelsea will open at Horton Plaza, marking the second U.S. location of the 120-year-old London-based tea and coffee business. Westfield also is budgeting in the “near future” for remodels of some of its fine-dining establishments, said Cusworth.
“We’re looking at ways to enhance the customer experience,” she said.
Noting Westfield’s track record that includes seven properties in San Diego County, Cusworth added, “We’ve had quite a bit of experience in developing throughout Southern California.”
In order to keep up with customer needs, Westfield has been collecting input from a variety of sources, including focus groups and surveys. More than a year ago, the Downtown Residential Marketing Alliance, a collaboration of CCDC, the Downtown San Diego Partnership, and more than a dozen private residential developers, teamed up with Westfield on a $45,000 survey to gauge residential and retail trends downtown.
“We all had a vested interest in understanding the retail and residential trends,” said DRMA spokesman Chris Wahl, who also is a partner at San Diego-based public relations firm Southwest Strategies LLC, and serves as a consultant to Westfield.
The survey results told them that downtown needs a broader range of both commercial and retail operations to serve the growing community.
“The retail and commercial markets haven’t kept pace with the growing region,” said Wahl. “Modern, fresh concepts to spark revitalization are a good thing for the economy. It’s the right thing to do now, but it’s very difficult to get anything done in today’s climate. It takes a lot of energy and resources to build the right kind of development that makes sense for the region. Oftentimes, opposing voices don’t want that kind of growth. It’s the ‘not in my back yard’ syndrome.”
But, said Wahl, downtown is different.
“It’s the region’s urban hub, and revitalization is already under way,” said Wahl. “Horton Plaza needs to be brought up to speed from 20 years ago. It was known as the jewel of downtown, and it can go back to being the jewel of downtown.”
From a residential standpoint, he added, “Everybody we talk to is supportive of the revitalization of Horton Plaza. Now, people are looking outside downtown for their retail needs. But, when Horton Plaza is revitalized, people who live downtown will get their shopping needs filled downtown.”
All of the signs are promising, said Wahl.
“There are a lot of new restaurants downtown, which are excellent examples of downtown beginning to grow up , top-tier restaurants that didn’t exist in downtown even 10 years ago,” he said. “Now the population has swelled, and the market has grown larger. You see the restaurants, hotels and night life, but retail hasn’t caught up yet. It will be the next wave. It is probably going to take a Horton Plaza revitalization project to spark that retail revitalization downtown, and that’s the way it should be , the full circle.”
Overall, with some 10 million customers visiting a year, Cusworth reports that business is good these days.
“It fluctuates,” she said. “We have hills and valleys, but we have been on an incline, especially with the growth downtown. We’ve enjoyed the positive benefits.”
Anchoring Asset
Sherm Harmer, co-founder of San Diego-based Urban Housing Partners Inc., considers Horton Plaza the “anchoring asset” of downtown.
“We can’t build condos and residences unless people have the ability to do a reasonable amount of shopping without a car,” said Harmer, a vocal advocate of the work/live/play strategy of smart growth. “If they have to get in a car, it defeats the whole purpose of living downtown.”
The mall has provided the city with many benefits, said Harmer, including tax increment dollars, seed money to redevelop the rest of downtown, and an entertainment center for tourists.
“Today, we look to the mall to provide a different service , providing for the shopping needs of new residents,” he said. “Westfield has been very supportive of a lot of research to try to understand who the new residents are, where they came from, their income levels, shopping needs, what kinds of services can be economically feasible.”
With major growth, comes major demands, said Harmer.
“We have added a huge number of new homes and residents that have created the need for many different types of retail services,” he said. “I think what you are going to see is a repositioning of the mall to meet the demand of these new residents.”
The area itself is continuing to evolve, said Harmer.
“All the development has been south of Broadway,” he said. “Now there will be a new generation of downtown , new buildings north of Broadway. They will surround Horton Plaza with new residents. If Horton Plaza is doing well now, how well will it do when you triple the population?”
Certain elements in downtown remain timeless, he said.
“Horton Plaza and Petco Park will be anchors that last for decades and decades,” said Harmer. “They will make Horton Plaza a very, very unique area, and Horton Plaza will do nothing but suck up all of that demand. If people can get what they need here, instead of getting in their car and going to Mission Valley, they will do it all day long.”
The Early Days
Dan Flores, senior marketing manager for the Gaslamp Quarter Association, talked about what he sees as the symbiotic relationship between Horton Plaza and the neighboring Gaslamp.
“They have grown into two large sisters,” he said. “One is a mall experience , with the large chain stores, while we have smaller shops , like Quicksilver and Puma , specialty apparel stores. We offer something different. In the long run, we combine and are a very strong competitor to malls outside of downtown. We offer a wide variety.”
Frank Alessi, CCDC vice president and chief financial officer, recalled how Horton Plaza served as a catalyst for the area.
“The Horton Plaza redevelopment area started out as a hole in the donut of downtown , 15 blocks,” he said. “We had to bring retail and residential to downtown. The retail center did quite well from the beginning, given what it was at the time. It was supported by the area, nearby areas and Mexico, too. It was first in the city, and it was pretty flamboyant.”
These days, Horton Plaza seems to be holding its own, said Alessi.
“It’s aged a little bit, but weathered a lot,” he said. “It probably could use some face-lifting.”
But, Alessi added, Horton Plaza is only one element of the developing downtown.
“One project won’t make it by itself,” he said.
CCDC would be reviewing any design changes proposed by Westfield for Horton Plaza, explained Donna Alm, the agency’s vice president of marketing and communications. She, too, remembers the old days, when an original design for the mall was submitted in 1975.
“It was a typical suburban mall, with an ice-skating rink that was enclosed,” she said. “It never was accepted.”
The late Ernest W. Hahn’s vision for the mall’s development was more “forward thinking,” said Alm, adding that Horton Plaza actually was more open than other malls of its day , up to a point, given its surroundings back then.
“When it opened, there was not much anyone would want to be associated with , derelict buildings, and not much activity outside,” she said.
Sophisticated Shoppers
These days, with all of the tourists and downtown residents, Alm said, “There has to be a shopping complex that is appealing to a lot of people. The mix at the beginning worked very well back in those days, and attracted people around San Diego and across the border. Today, there is a more sophisticated crowd that takes their shopping experience seriously.”
Harmer agreed.
“The Marina District, which is contiguous to the mall, has the largest amount of high-end homes, with an average price of $1 million,” he said. “With people who have those kinds of income levels, their shopping needs are much different from tourists.”
While tourists might visit such places as Seaport Village, SeaWorld San Diego and the Wild Animal Park, said Harmer, “People in the Marina District are a little older, and more sophisticated … They are urban people, looking for things that are more upscale and more fashionable.”
Whatever changes are going to be made at Horton Plaza, Harmer is certain that it won’t be scaled down.
“In no way do I see it drifting to Wal-Mart,” he said. “It’s all going the other way. Mervyns couldn’t make it there.”
Plus, the people who stay at the high-end hotels , and are willing to pay $400 to $500 a night , “aren’t out to do bargain shopping,” Harmer added. “If you look at the conventions we are able to attract these days at the Convention Center, this will tell you the type of buying power and the retail-demand levels we have.”
Outside Influences
Nancy T. Scull, a partner in the San Diego law office of Luce, Forward, Hamilton & Scripps and a member of the International Council of Shopping Centers, considers Los Angeles an example of how mixed-use urban projects can be done.
She set up all of the governance for the hotels and residential elements of L.A. Live, a 4 million-square-foot mixed-use sports and entertainment project now under way, adjoining the Staples Center and the Los Angeles Convention Center.
“L.A. Live provides jobs and housing and will re-ignite downtown Los Angeles,” said Scull, a frequent speaker on the intricacies of mixed-use planning. “It’s a massive undertaking.”
It’s also an example of what can be accomplished in San Diego, even at such venues as Horton Plaza, she said.
“With the city’s vision, and a lot of patience in terms of getting through the approval process, it should happen,” said Scull. “These mixed-use projects are in the process of proving themselves as an alternative way to build.”
With the softening real estate market, they also can help spread the costs and revenue, she added, with the various sectors sharing their services and amenities.
“It makes a lot of sense, and is the way cities were built in New York and Boston , mixed use in a very intense way,” she said.
In Horton Plaza’s case, said Scull, a good addition would be a high-profile, luxury hotel, on the order of a Four Seasons or Ritz-Carlton.
“If they really wanted to get creative, they could draw on the new trend of ownership, with fractional residences,” she said. “This could be a center that is functional and could attract some retailers who have left. Then it becomes another draw for the city , to re-establish the jewel that jump-started all of this, anyway.”
Scull, who serves on CCDC’s education committee, also would like to see more cultural and educational elements added to the mix.
“It is doable,” she said. “But you do have to patiently go through the entitlement process, because this is California.”
And, she added, “California is definitely ahead of where most of the country is, in terms of thinking through the governance of these complex projects. We’ve got a lot more experience.”
The Right Mix
George Whalin, president of Retail Management Consultants in San Marcos, considers downtown San Diego “a great place for a shopping center,” and doesn’t see Horton Plaza’s vertical, inward structure as a particular handicap.
“There are a lot of vertical downtown shopping centers that do very, very well , on Michigan Avenue in Chicago, and in New York,” Whalin said. “They continue to be, after long periods of time, an important part of the community.”
But, he added, “They need to always be adding new stores and fine-tuning, and not let the stores get run-down. I don’t think they do it enough, but none of them do it enough. They all have to be better at it.”
The key to success is having the right mix of stores, said Whalin, who recalled a recent trip to Victoria Gardens in the city of Rancho Cucamonga.
“It’s a ‘lifestyle’ shopping center, and the mix of stores isn’t very good,” he observed. “It has all the usual suspects, but it doesn’t have much in the way of really unique stores. It’s difficult to sustain a shopping center, without really good stores.”
