California’s Santa Monica Place is set to shed its dated, mainstream mall format and be transformed into an open-air luxury destination.

At the heart of the 30-year-old enclosed center’s redevelopment is a plan to be integrated into the fabric of the coastal community, with appropriate architecture and amenities that take advantage of Pacific Ocean views.

The overhaul calls for dismantling the roof, and a near total remerchandising. High-end retail brands and designer labels are being sought, and the former 131,000-square-foot Robinsons-May will be replaced with an upscale fashion department store, or possibly two large specialty stores. Saks Fifth Avenue, Nordstrom, Bloomingdale’s and Neiman Marcus have been contacted. Macy’s, the other mall anchor, is staying put.

Another element of the redesign will be outdoor dining with five or six restaurants on a deck overlooking the Pacific above the three levels of retail, a food hall, a more spacious center court and wider common areas.

Santa Monica Place will shut Jan. 31, with the exception of Macy’s, to prepare for construction in the spring. The reopening is expected in fall 2009. Macerich would not disclose how much it intends to spend on the redevelopment.

Last month, Macerich, the real estate investment trust that owns Santa Monica Place, completed the entitlement process for the redevelopment. It was a particularly sweet victory, considering Macerich is based in Santa Monica and persevered through three years of negotiations and design issues with local officials and the community. Concessions were made on reducing the scale, including dropping plans for residential towers.

The California Coastal Commission and the City of Santa Monica’s Architectural Review Board gave the green light in December. Last fall, the project was approved by the Santa Monica City Council. Macerich has been aggressively remodeling and expanding prime properties, including the recently redone Queens Center in New York and Tysons Corner in Virginia, which is under way. With Santa Monica Place, the developer has been eager to sustain the strategy.

“Santa Monica was a very challenging, three-year process,” said Randy Brant, Macerich’s executive vice president of real estate and a 15-year resident of Santa Monica. “For a remodel in a city this size, it [usually] takes less than a year to get the approvals. But we went out to the community and gave them what they wanted.”

This story first appeared in the January 10, 2008 issue of WWD.  Subscribe Today.

Macerich has challenges ahead, primarily securing luxury tenants in a relatively short time frame in an area associated with a more casual attitude and the junior-type merchandise appeal of the popular Third Street Promenade, next door to Santa Monica Place.

“We are negotiating letters of intent and moving very quickly,” Brant said. “Luxury stores have been longing for a venue in Santa Monica. They understand that the resident in ‘west, west Los Angeles’ doesn’t like to go to Beverly Hills, though they have been concerned about Third Street, which has set itself up as a junior street.”

However, Brant said design plans should alleviate those concerns since the goal is to create an upscale streetscape à la Madison Avenue, where luxury brands project their own personalities rather than conform to the uniformity of a typical mall setting. “We’re really trying to urbanize a multilevel retail structure with a contemporary design and provide an opportunity for retailers to express themselves — to build flagship stores. The transformation from a physical standpoint will be dramatic.”

With the opening up of common areas and a larger center court for a less constricted feeling, the mall’s gross leasable area will drop slightly to 540,000 square feet from 560,000. Vertical retail “bays” will be designed for flexibility, and on the Third Street side there will be a glass building Macerich likens to a “jewel box” with horizontal louvers for a key retailer to embody the “street retail” atmosphere.

Jacaranda trees, which also line Third Street, and other plantings, as well as terra-cotta, glass and stonework, will be incorporated in the design to reflect the architectural palette of the community. Slim columns on the Second Street side of the mall will mimic the pylons of the Santa Monica Pier. The mall is located at Broadway and Third Streets, two blocks from the beach. Omniplan, based in Dallas, is the architect. The Jerde Partnership of Venice, Calif., is the design firm.

The other big selling point is, of course, the area’s wealth. Macerich points to statistics from a report by Jeff Green Partners and Retail Focus, two real estate consulting firms, indicating that the average per capita income is $49,356 in the primary trade area, and tops $100,000 in average household income across the total trade area. Santa Monica’s North of Montana neighborhood has an average household income of $195,000, and the downtown district is expected to grow by 12 percent in five years.

Brant sees no direct competition nearby, and noted that the closest luxury rivals are in Century City and on Rodeo Drive, which are more than five miles away.

“Santa Monica Place has been a very productive, strong ‘B’ mall generating over $500 in sales per square foot,” Brant said. “But it’s not as productive as it should be given the demographics of Santa Monica.”

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