David Rosenfeld

Promenade on the Peninsula mall looks for new strategy

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Shoppers at the Promenade on the Peninsula enjoy a quiet weekday afternoon at the mall. Photo by David Rosenfeld

Shoppers at the Promenade on the Peninsula enjoy a quiet weekday afternoon at the mall. Photo by David Rosenfeld

Lynn Macnguyen lived on the peninsula for 20 years before she and her husband opened Sparrow Restaurant on the western edge of the Promenade on the Peninsula mall. Though business isn’t bad these days, for Macnguyen and many of the other owners in the open-air mall, things could be better.

“A lot of the big retailers have gone,” she said. “It doesn’t seem like they get any good ones to come back in.”

The mall too never generated the $1 million-plus in tax revenues the City of Rolling Hills Estates first envisioned. Last year the Promenade generated just over $300,000 in local sales tax revenue with its peak in 2007 when it brought in $415,000 to a city with a total operating budget of $6 million. In 1998 the city closed Deep Valley Drive as a condition of the owner before investing $78 million in redevelopment.

Responding to the downturn in the economy, more than 30,000 square feet on the upper floors of the 370,000 square-foot mall have been rented to medical or other office space uses. And now mall owners Stoltz Management Company want another 50,000 square feet of office space approved by the city.

Macnguyen and other business owners in the mall say they welcome it.

“Anything to bring more people,” Macnguyen said. “I would rather they could get a Nordstrom Rack or something to come here but it doesn’t seem like it’s going to happen. So if it can fill up space I’d say it would be good for everybody.”

Last week the Rolling Hills Estates City Council rejected a proposal for a 5-year agreement where the mall would pay $1 per square feet, up to 50,000 square feet, of additional office space it rents on the two upper floors. A majority on the council in essence said they wanted more money.

The plan will instead be considered in closed session later this month and return for an open session debate at a future council meeting not yet determined. Councilman Steve Zuckerman who helped negotiate the proposed settlement said it’s financially a pretty small consideration.

“It’s as much a token as it is real,” Zuckerman said. “There was a recognition of market realities that if we look at the peninsula center as a whole there’s a lot of vacant retail space. One thing it does do is at a minimum that first level be used for retail only.”

Others on the council suggested the agreement sunset in five years, at which time any new leases would have to undergo their own conditional use permit. But Stanley Lamport representing Stoltz suggested they would oppose that idea.

“I know that my client is very concerned about having a predictable normal working tenant base,” Lamport told the council last week. “It’s hard to attract a tenant if you can’t continually tell them that they have the ability to renew the lease and it won’t create any problems.”

Planning director David Wahba conceded the city could receive far more than one dollar per square foot in retail space, but the city needs to preserve the commercial center it has now.

“One of our main goals here is not so much the money but trying to preserve the retail environment on the first floor and trying to limit office and non-retail uses to the upper floors,” Wahba said. “When the city closed the street and gave them part of Deer Valley Drive to build some more buildings it was always seen as a way to make that synergy for that retail mix.”

Carla Kehres, owner of Boutique Classique, said it’s a matter of raising awareness in the local community to encourage people to shop where they live.

“People just don’t think of coming up here to shop,” Kehres said. “They also don’t’ realize that a lot of the shop owners here are locally owned. Ideally of course I’d like retail here, but I’d rather have something than nothing. Foot traffic is good. Getting bodies here is a good thing.” ER