Westfield Group recently completed a $180 million renovation of its Westfield UTC mall in San Diego, just in time to greet a holiday season that national experts predict will top last year’s November-December period for U.S. retail sales.
After 14 months of work, Westfield UTC now sports a slew of new merchants, a 14-screen ArcLight Cinemas, a dog park, children’s play areas and a botanical feature called “The Gardens,” in partnership with San Diego Botanic Garden. Family lounges and social spaces with new furniture and free Wi-Fi are now in the mix, along with a giant LED screen in the mall’s central Palm Court gathering spot.
Approximately 50 retailers have either debuted at the center or renovated existing stores in the past year, with an additional 30 expected to do so in 2013. The gym chain 24 Hour Fitness is nearly tripling its UTC presence with a new 45,000-square-foot “Super-Sport” club set to debut in mid-December, and by year’s end or early 2013, the restaurants Seasons 52 and Eureka! Gourmet Burgers & Craft Beer will make their San Diego County debuts at Westfield UTC.
More on the Way
There is more on the way. Jerry Engen, a San Diego regional senior vice president of development with Westfield, said the mall operator within the next five years — contingent on market conditions — could be moving forward with long-discussed plans to build multifamily housing units and more retail buildings at Westfield UTC.
The multiphase plan, approved several years ago by city officials, would eventually bring Westfield’s total new investments at the UTC property to approximately $1 billion.
“Our philosophy is to continue to invest in these centers,” Engen said.
He noted that Westfield Group is nearing completion on a $55 million renovation of its Westfield North County mall in Escondido, where it recently brought in a Target store and is in negotiations to land more new retailers and restaurants in the coming year.
It is also in preliminary design stages for significant improvements in the works at Westfield Horton Plaza in downtown San Diego, and Plaza Camino Real in Carlsbad.
Westfield and its rivals have invested significantly in upgrades to make their properties into more compelling venues where consumers want to spend time and money, often by adding nonretail elements. In recent months, Westfield has snagged tenants for its local properties that are not traditionally found at regional malls, such as fitness chains, grocery stores and big-box discount stores.
San Ramon-based 24 Hour Fitness has been at Westfield UTC since 1980, and is moving to a nearby space spanning the first floor of the mall’s former Robinsons-May building. Jim McPhail, executive vice president and chief development and merchandising officer at the fitness chain, said the new UTC club will have a full basketball court and high-tech equipment rooms among other amenities, and will be the company’s first location with a 7,000-square-foot outdoor sports performance facility for advanced training, capitalizing on the region’s favorable weather.
The company, which has more than 30 local clubs, is in the midst of a two-year, $20 million improvement program impacting several locations, and is planning to open another Super-Sport club in summer 2013 at Westfield Plaza Camino Real, to serve the Carlsbad-Oceanside market. “We’re very bullish on San Diego,” McPhail said, noting 24 Hours Fitness plans five to seven local openings and renovations over the next five years.
He said the UTC mall location helps the company efficiently serve a longtime core of time-strapped customers from nearby homes and offices, providing convenient parking and access during hours when business does not conflict with adjacent stores.
“When we’re busy, retail stores usually are not, so it works out really well for us in terms of people traffic,” McPhail said. “We’re not as busy as the retail stores in November and December, because our members have other things going on in their lives.”
A Happy-Holiday Retail Season
The National Retail Federation, an industry trade group that does an annual holiday sales forecast, recently projected that U.S. sales this year will rise 4.1 percent from 2011, topping $586 billion. That would follow last year’s actual growth of 5.6 percent over the 2010 season, and top the average 3.5 percent annual rise seen during the past decade.
Despite sluggish job growth and uncertainties about the federal budget situation, the federation said retailers are benefiting from a nationwide rise in home sales and consumer confidence.
Shopping centers, however, continue to compete with online venues for business. The retail federation forecasts that online holiday sales in 2012 will grow 12 percent over last holiday season, to approximately $96 billion.