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Friday, May 24, 2013
Struggling Downtown Plaza gets new owners – can they turn it around?
by Melissa Corker, published on August 15, 2012 at 9:44 AM
Storyline: Local Business
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It’s official: Westfield Downtown Plaza has a new owner – San Francisco-based real estate investment company JMA Ventures.
“I’m absolutely excited about it,” Downtown Sacramento Partnership Executive Director Michael Ault said Wednesday.
Todd Chapman, president and CEO of JMA Ventures, announced Wednesday morning that the company purchased Downtown Plaza for an undisclosed amount.
Downtown Plaza, built in 1971 and redeveloped in 1993, covers six city blocks in downtown Sacramento and currently houses 101 retail and restaurant spaces.
Ault said Downtown Plaza, which links the grid and Old Sacramento, is the largest sales tax generator in the central city.
“I think they are going to be a great partner,” Ault said. “They have quickly come to understand the importance of the plaza to the downtown and to future development.”
JMA plans to transform Downtown Plaza into an urban destination by remaking the area as a lifestyle retail and entertainment experience that can’t be found at typical suburban malls in the area, Chapman said in a press release.
Ault told Downtown Sacramento Partnership board members about the purchase in an email Tuesday.
“While JMA Ventures is not a heavy hitter in the retail industry, they have a proven track record and a broad range of management and development experience,” Ault wrote. “They are not the kind of firm that takes a cookie cutter approach, but rather will look to develop something that works for Sacramento.”
Ault said he sees the purchase as bringing “positive momentum” to the downtown business district, and he said the company appears to be “strategic” in its approach.
“They want to take a look at what exists and position the plaza as a traffic generator for the downtown,” Ault said. “They seem ready to reinvest in the city and make the center much more relevant than it has been.”
The plaza has had a few fits and starts on a sale over the past few years, and this successful deal comes with a few questions.
Tony Bizjak reports in The Sacramento Bee that Westfield, a huge international shopping center owner and builder, struggled to make the plaza work during the recession.
“Will JMA Ventures, a company with about three dozen employees and a modest retail résumé, be able to do better?” Bizjak asks.
Mayor Kevin Johnson is holding a press conference at City Hall this morning to discuss the sale of the plaza and what it holds for the future of downtown. We will continue to provide updates as more information becomes available.
Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Facebook and on Twitter @MelissaCorker.
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On a selfish note, I'm kind of hoping for an Urban Outfitters and an H&M. Just sayin'... ;)
The big problem with chain stores (even the fancy ones) is that they want to be around other chain stores, not locally owned stores. And banks don't want to finance projects unless there are chain stores, despite the fact that there is such growing interest for locally owned stores among the urban customer base. So it's a bit of a trap from a retail perspective.
The critical point, if Downtown Plaza is to continue as a shopping center or what we have called a "mall" since the 1950s, is that its product must be something that you can't get in the suburbs. Most of the region's customers are closer to suburban malls with free parking and controlled access. If they can get what they're looking for there, they will go there instead. Only if downtown offers a significantly different product and experience will people be compelled to go downtown. Of course, this means that those uninterested in the urban product (city look and feel) will not come downtown. But they weren't going to come downtown anyhow, no matter what you dangle in front of their noses, so why bother appealing to them at all?
I'd first start out by turning the mall back into something resembling a real street (w/o the cars). Move the escalators/stairs to the sides and create an open-air central walkway. That way it will once again be part of downtown, an extension of K Street, rather than a closed off suburban mall. Get rid of the kiddie playland and the food court and allow cafes/eateries to be scattered throughout.
Ideally retail would be added on the outside along L and J streets, but since there's very little foot traffic due to the nature of what's built around it, I don't think that's practical right now. Allowing cars through the mall is also impractical and would cost a lot more than the value you'd get in return.
Adding a variety of community amenities such as housing, hotel, day care facilities, branch of college, contemporary art museum, nightclubs, grocery store, etc. wouldn't be a bad idea. But it's success or failure starts with changing the mall's physical relationship with the rest of downtown.
As far as the shops go, how likely is it that they could fill the entire space with locally-owned businesses? Certainly filling it back up with typical mall chains would be a recipe for failure. But I wouldn't mind a downtown Apple store. So maybe a mixture of chains and local shops is the way to go? I may be mistaken but a problem I see is that unlike on a conventional street where individual building owners can charge different rates the mall pretty much charges the same rates to all their tenants and a chain store is likely to be able to pay more than a locally-owned shop or start-up.