In Riverside, Calif., one of the nation's fastest-growing cities, investors took a chance on a foreclosed, half-century-old mall, poured millions of dollars into it, and are now nearly finished leasing the transformed space.
“The entire site was scraped to the dirt”, with the exception of a few tenants, says Carol Scott, general manager of the 55-store Riverside Plaza. All but three spaces have been leased, and the 475,000 sq. ft. mall's vibrant Main Street now draws thousands of shoppers. “The parking lot fills up on weekends,” Scott says. Visitors enjoy entertainment by groups such as the Cadillac Cats and Viento Libre.
The open-air mall was built in 1955, and its tenants once included the now-defunct F.W. Woolworth Co. and Montgomery Ward. Over the years, as a larger, enclosed mall was built a few miles away and other retailers competed for shoppers, Riverside Plaza deteriorated and ended up in foreclosure.
In 1998, Westminster Funds, based in Lake Forest, Ill., bought the shopping center. The plaza was demolished in 2002, and over the next four years, rebuilt and reopened in phases. Fresno-based Gottschalks Department Store is now the plaza's only traditional department store, and it was upgraded during the renovation period.
Westminster's strategy, guided by company principal George Carroll, was to redevelop the mall as an entertainment and lifestyle center, with a theater and mix of independent and brand name restaurants and stores. Westminster's pursuit of a theater was hampered by the then troubled theater industry, as prominent chains such Regal Cinemas and Edwards Theaters filed for bankruptcy protection. Eventually, the investors reached an agreement with Signature Cinema, later acquired by Regal.
The investors persisted because they believed in the strength of the Southern California market. With a population of 285,000, Riverside is the largest city of California's Inland Empire. An estimated 16 million people live in the six-county region that includes Riverside, according to the Western Riverside Council of Governments. And Riverside County's population is expected to double over the next 20 years.
Its economy includes light industries as well as architectural, engineering, software and banking firms, and holdings exceed $3 billion in deposits, according to the Riverside Chamber of Commerce. Film-making generates $75 million annually in the area. Reports show per capita retail sales rising as high as 42% since 2000.
“We are one of the top five retail areas in Southern California for total spending in the suburban market,” says Gregory Lee, economic development coordinator for the City of Riverside. City shopping centers expanded to accommodate new residents attracted by the city's relatively affordable housing, compared with coastal home values. “These people bring a disposable income and a desire for upscale shopping.”
Riverside Plaza's dramatic transformation gives residents new options. The palm tree-shaded plaza's three fountains boast a waterfall, pop jets and water spouts as smooth as glass tubes. “It's an incredible transformation,” says Lee. A few years ago, the mall was run-down and nearly abandoned. “The last soldier had left his outpost.” But redevelopment changed the entire look of the area, he says. “Now it's young, urban, very hip, very chic.”