By  on June 30, 2008

Just 3 miles from Los Angeles' OFTEN- gridlocked 10 Freeway, on a large parcel of land bounded by three of the city's busiest streets, trolleys run on cobblestone boulevards, onlookers watch water displays choreographed to music and children play on an enclosed lawn.

It's not a city park, an oasis or even Disneyland. It's a mall, and one of Los Angeles' most popular shopping destinations.

The Grove, the shopping center described above, is emblematic of a trend toward both mixed-use and outdoor malls, particularly in areas where warmer climates encourage such development, spawning a new breed of shopping center: the outdoor lifestyle center.

For many, the outdoor lifestyle centers — opulent outdoor malls with retail buildings typically turned inward to face a central green area or other focal point — are an increasingly popular way to attract shoppers by breaking the traditional indoor mall mold.

With consumers battered by sagging home prices, a credit crunch and skyrocketing gas and food costs, the highly stylized, manufactured village developments have an escapist quality that has a clear appeal, one that has generated quite a following.

"We're seeing more and more mixed-use [projects] as a way to maximize space in urban areas, and a subset of that is the outdoor lifestyle center," said Jeff Green, a San Francisco-based retail analyst. "It's not that indoor malls are going away any time soon, but increasingly you see developers adding elements like large courtyards or green areas to existing malls to try to emulate the lifestyle center model."

The developments tend to be heavy on attractions and amenities like fountains, small man-made lakes, cobblestone road walkways and on-site transportation like trolleys or streetcars to shuttle shoppers around the property — all the quaint appeal of an old-time village square.

A case study in the concept comes from Los Angeles developer Rick Caruso, one example in the growing field. A heavyweight when it comes to high-end lifestyle centers, Caruso opened the Grove in Los Angeles in 2002, and has seen a steady stream of visitors and public attention. The 3,500-spot parking structure is often filled nearly to capacity; the development draws nearly 20 million people a year, a figure that doesn't surprise some retail analysts, even given the current economic slump. They say that even with gas and food prices continuing to rise and home values declining, there's understandable appeal to such centers."It's a niche subset of mixed use that's done quite well in some areas because it's an attraction in itself, and the amenities tend to be very high-end," said NAI Global's David Solomon, president and chief executive of the ReStore division. "In a tough economy, one thing that's key is keeping people on the property by offering a wide variety of options, like apparel, dining and entertainment."

Shoppers who frequent centers like the Grove seemed to agree.

"It's crowded and sometimes the parking is tough, but it's a place everyone can get a little of what they want," said Los Angeles resident Raya Pippen, who was shopping at the Grove with her family on a recent weekend. "There's a townlike atmosphere and I can take the kids — we can make a day of it."

With the Grove already under his belt, Caruso has embellished and expanded the concept, evidenced by the new $400 million Americana at Brand in the outlying suburb of Glendale, which is bigger and includes a residential element — rental as well as owned units.

The 16-acre center, which opened this May, was years in the making and not without significant controversy: Americana was subject to legal challenges and a ballot measure that voters approved, enabling Caruso to proceed with the massive development.

And Caruso Affiliated's lifestyle push continues. Plans for the Shops at Santa Anita Park are under way. The development, near the Santa Anita horse-racing track is slated to open in 2010 and like Americana, will add a residential component to the retail and entertainment elements, as well as horse-drawn carriages that are planned for the center.

"This is all about service, providing an experience, and the concept gets more and more refined as we move forward," said Caruso at May's International Council of Shopping Centers conference in Las Vegas.

Still others say, though, that the novelty could wear off, in part because the concept may be hard to redevelop should it fall out of favor in the future. A broader mix of retail-residential use, concentrated in smaller developments, could be a more flexible option.

"The higher density is what a lot of municipalities are looking for in development as a way to minimize sprawl, and it's a way to tap into the pedestrian-friendly development," said David Zoba, a past ICSC trustee and chief operating officer of Columbus, Ohio-based Steiner + Associates Inc., at last month's conference. "So many of what are called 'lifestyle' centers are of-the-moment niche developments. I don't know how long that can be sustained."

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