Mmmm, Well... who saw this coming? I'm sure it's 10 years or more down the road if it happens.
Westfield shopping for new mall site
Speculation centers on I-5 locations
By Kelly Johnson of The Sacramento Business Journal
Friday, December 21, 2007
The owner of the Roseville and downtown Sacramento malls is quietly pursuing property along Interstate 5 for a large center to be built years down the road, according to Northern California retail and real estate players.
"That is something they're strongly investigating," said Matt Holmes, a principal with retail brokerage Retail West Inc. in San Francisco.
"Although Westfield is always looking for and evaluating opportunities for growth of our portfolio, the company declines to comment on market rumor/speculation," said Catharine Dickey, Westfield spokeswoman.
It's not clear if Westfield has pinpointed a site, or whether the mall would be within the city of Sacramento or in the unincorporated county. Sources said one area Westfield is considering is near the Interstate 5 interchange planned for Metro Air Park. That development slowly taking shape on the east edge of Sacramento International Airport is zoned by Sacramento County for 21 million square feet of warehouses, offices, retail and high-tech space, and a golf course.
Marvin "Buzz" Oates, a partner in Metro Air Park who owns about 800 acres there, said he had not heard from Westfield about property there.
Officials with the city and county of Sacramento said Westfield had not approached them with the idea. Without having some idea of where Westfield wants to land, officials said they couldn't speculate whether they would be receptive to a development proposal.
Jim Teare of Colliers International confirmed he represents Westfield in looking for potential mall sites in Northern California, and has done so for 1½ years. He declined to comment further.
Reaction to the possibility of a North Natomas mall was mixed. The area already has a tremendous amount of retail and much more is planned, including projects of almost a half-million square feet each proposed by Enlow Ose and by Angelo G. Tsakopoulos and his father, George.
But the area has no department stores. Also, any major mall wouldn't be built for years. By then, housing built in the corridor from Sacramento to Sutter County could support more shops and restaurants.
Different stores, new competition
Once North Natomas develops further -- and if Metro Air Park and the 577- acre Greenbriar housing project proposed north of Interstate 5 are built -- "you could certainly justify a mall," said Ken Noack Jr., a retail broker with Grubb & Ellis Co.
A mall would attract a "different complexion of tenants" from those found at the various big-box and neighborhood shopping centers now open in North Natomas and others that are proposed, he noted. But nearby centers, including the big-box Woodland Gateway center that developer Paul Petrovich is building, could compete for shoppers and tenants.
"It will be who can build a better mousetrap" and when, Noack said. Westfield Galleria at Roseville and Arden Fair mall in Sacramento could "be impacted a little bit," he said.
Westfield Downtown Plaza, which the Australia-based shopping center giant plans to remodel possibly with the addition of Target and a grocery store, might have to be revamped to survive with another mall so close in Natomas. Westfield officials said at a recent city Design Commission meeting that they might consider a more extensive overhaul of the mall down the road, one that could add housing.
Strategy and clout
Perhaps that later overhaul could turn Downtown Plaza into a value-oriented center or a mixed-use center with a healthy dose of housing and offices, real estate sources said.
"You don't need another mall in this trade area," Holmes said. Westfield, though, must think Natomas needs some department stores, he added.
Bob Dong, a retail broker with the Terranomics division of BT Commercial, doesn't understand why Westfield would consider a mall in North Natomas now.
"There's just too many unknowns at this point," he said. Those unknowns include what the federal government will decide about Natomas' flood risks and levee conditions, whether customers are willing to buy homes near the airport, and when the housing slump will end, allowing renewed home construction. Most developers Dong works with are not looking that far down the road, he said.
A population of 250,000 is needed to support a mall, Dong said. South Natomas and North Natomas had a combined estimated 2006 population of about 84,000.
Having three shopping centers in this market would give Westfield tremendous clout with retailers, Holmes said. Getting a spot in the Galleria would be the initial draw, but retailers might be enticed to locate in multiple Westfield centers in this market. That might preclude those retailers from locating elsewhere -- perhaps even keeping them out of the retail space planned for The Railyards, the huge industrial redevelopment project just north of downtown Sacramento.
"I think the railyard's in trouble if this thing happens," Holmes said.
Noack disagreed. A mall and the railyard would pursue different types of retailers, he said.
Even real estate sources who think Natomas couldn't support a mall said they like the idea of another amenity that could draw people to the city of Sacramento.
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