On 11/16/2016 9:52 AM, Jeff Liebermann wrote:
> On Tue, 15 Nov 2016 21:45:19 -0800 (PST), jbeattie
> <
jbeat...@msn.com> wrote:
>
>> What killed Vallco? I would think that with the price
>> of dirt down there, you would not be living with a
>> dead mall.
>
> "A Third of American Malls Will Close Soon"
> <
http://time.com/money/4327632/shopping-malls-closing/>
>
> The cost per square foot of renting space in a mall is part of the
> problem. I think $50/sq foot is the national average with variations
> from $25 to $100/sq foot. Even renting kiosk space costs about
> $800/month. The money of keeping malls open has always been provided
> by the big chain stores (Sears, Macys, etc). Few small retailers can
> afford the prices these pay for renting space. As the small retailers
> drop off, they were initially replaced by chain stores, and slash and
> burn quick buck artists that would appear during the holiday season,
> and disappear soon after. Meanwhile, buying on the internet has taken
> a big chunk out of the mall's customer base. I'm not sure in what
> direction consumerism is heading, but I don't think the shopping mall
> is the likely direction.
Vallco is kind of unique. The department stores wanted to stay, but the
mall's purchaser pushed them out, even soliciting help from the city to
force them to sell. One council person dubbed it "Decline by Design."
Vallco was doing well enough with its shift to restaurants and
entertainment (AMC, Bowlmor, Ice Capades), along with the three
department stores and a handful of successful smaller stores, and an
upscale health club (Bay Club). They were even going to add
out-buildings with more restaurants. They were working on leasing space
to more restaurants when the new owner came in and decided to kick
everyone out and try to get approval for office towers and luxury rental
apartments, with just a small amount of retail.
The developer's plan was to kill everything in the mall and then come to
the city and plead to be allowed to build commercial office space
because the mall was empty. It's like the kid who is convicted of
murdering his parents who begs the judge for mercy because he's an orphan.
The developer decided to try to bypass the planning department, the
planning commission, the city council, and the California Environmental
Quality Act's requirement of an EIR, by putting an initiative on the
ballot. They spent a fortune on a misleading campaign, which included
hundreds of thousands of direct mail pieces (we were getting six per day
at the peak), and public outreach with free movies, free bowling, free
food, free wine, and free beer. They hired an army of non-residents to
go door to door soliciting support, but of course these people could not
engage in an intelligent discussion with any residents. They hired
people to hold signs at street corners. They tried to co-opt Tournament
of Bands (my passion).
One reason they rushed to the initiative process was because a) they
were terrified of what an EIR would show, and b) they wanted the project
approved prior to the completion of Apple's new campus which will cause
significant traffic congestion.
They probably spent $10 million between their campaign and other related
expenses.
While many malls throughout the country have failed, many have been
revitalized. In the Bay Area we saw the revitalization of Valley Fair,
Great Mall, Tanforan, Serramonte, Stonestown, New Park, El Paseo,
Oakridge, and Westgate, with Eastridge being revitalized now. Even with
all the online shopping, there is still a demand for malls that keep up,
with a combination of retail, entertainment, and dining.
One reason that Sears and Penny's were so keen to stay open at Vallco is
because it was their last Silicon Valley outpost, after having closed
lower-performing stores nearby. It's a really long way to a Penny's now!
The developer that owns Vallco has somewhat of a tarnished reputation in
the Bay Area, and that helped contribute to the loss of their ballot
initiative.
<
http://www.mercurynews.com/2016/11/10/palo-alto-increases-fines-for-edgewood-plaza-violation/>