Americana's rising tide
The success of Rick Caruso’s glendale mega-mall has helped lift up struggling businesses, even competitors
By Carl Kozlowski 12/11/2009
For decades, Glendale’s Brand Boulevard was known for car dealerships and its classic vaudeville palace, the Alex Theatre. Despite the presence of the Glendale Galleria, which seemed stuck in time and mired in ’80s mall culture, the city was hardly seen as a stylish shopping destination.
Then real estate mega-developer Rick Caruso entered the picture. He had already designed major retail zones he called “experiences” in Encino, Westlake and Calabasas before launching The Grove in West Los Angeles — a faux village, complete with old-fashioned trolley cars, that resembled Disneyland’s Main Street and quickly rivaled Mickey Mouse’s home as Southern California’s most popular tourist attraction.
Caruso wanted to make an even bigger mark in Glendale with a project called The Americana at Brand, which he wanted to expand beyond retail, restaurants and movie theaters to include scores of apartments and condos. After years of planning, official meetings and $268 million in construction costs, The Americana opened in May 2008 to throngs of visitors whose thousands of cars required phalanxes of Glendale police to control.
The development had overcome plenty of questions since its initial proposal, and now that 18 months have gone by since its opening, PW revisited The Americana and the impacts it’s had on Glendale.
Has its traffic overwhelmed the streets? Has it crushed the business of competitors like the Galleria? Or has it become another gem of the Jewel City?
“The project itself has been extremely successful,” says Caruso, a man who mixes an executive bearing with glad-handing charm as he leads a tour through the Americana’s lavish apartment complex. “It’s actually above our projections in terms of where we thought we’d be, and the chains that are there, like the Cheesecake Factory, Juicy Couture and Tiffany, are No. 1 in the district.
“Our [shopping] community is pleased and large — with shoppers coming from Arcadia, Pasadena, La Cañada, Glendale, Los Feliz and Silver Lake, and now people are coming from Sherman Oaks through Toluca Lake. We did a survey and are pulling from 111 zip codes,” Caruso says.
Caruso is actually happy to note that his complex’s success has helped spur business for others in Glendale as well. He points out that the adjacent Galleria’s sales have increased 10 percent since The Americana opened, and that new retail outlets are springing up in other nearby areas of Brand Boulevard as well.
According to Caruso, 97 percent of The Americana’s retail property is leased, which he deems “ahead of our projections.”
Comparing the new property to The Grove, he says that The Americana is “exactly 19 percent ahead” of where The Grove was in its first year in comparing retail sales directly, leaving aside all the income from apartment and condo rentals.
“And we’re doing all this despite being caught up in this economy,” Caruso says with evident satisfaction. “I know the sales tax receipts that the property is generating for the city are great. There are no financial issues for the property. In fact, they’re just the opposite, extremely healthy. And we haven’t seen any impact at The Grove this year like people coming here instead, because there’s enough density, enough people to take care of everybody and there’s enough business out there.”
All of that has come as pleasant news for Glendale City Councilman John Drayman, who originally harbored concerns about the impact The Americana would have on commerce in the city’s neighborhood business districts. When the project was launched, prior to his election to the council, Drayman was the head of the Montrose Shopping Park Association’s 216 shops. At that time, he received assurances from the City Council that they “would take the pulse of small businesses and keep us strong.”
“In studying the impact, I had found that the curiosity factor alone for shoppers would cause a 10 percent slip [at] most small businesses — that’s the profit margin for most small businesses,” says Drayman. “I never had a problem with the concept, and we needed to revitalize our downtown. The only problem was beyond our timing, the city’s or even Rick Caruso’s timing: the economy.
It was launched amid the bottom falling out.”
Drayman notes that The Americana’s residential component was hurt by the bottom falling out of the real estate market, forcing The Americana “to leave the starting gate at full clip.” But Drayman says that the complex’s sales tax figures “are keeping a lot of other boats floating in the city.”
“It’s still doing very well, as is the Glendale Galleria,” says Drayman, “despite some individual businesses having concerns. I think Glendale compared to our neighboring cities stands to do quite well this Christmas season. I sense that retailers this year will post better numbers this season by far. The Montrose Shopping Park took quite a beating, but the numbers of sales are beginning to turn now. The attendance figures at the Galleria are up a bit. That Macy’s is one of the highest grossing in the region, and JC Penney’s as well. I think the trend is good and the Glendale is positioned to have a far better Christmas than last year.”
One somewhat challenging area for Caruso’s team has been leasing or selling the condos and apartments. While he states that “our lease rates are 30 percent above market, and we’re pleased,” there have been some bumps along the way.
“The only part where I think we’ve lagged a little bit, and not had a grand slam, is due to the sputtering economy, which is not the fault of the city or Caruso,” says Glendale City Council member Ara Najarian. “The economy made sales of the condos slower than they would have been if they opened a year before. But Caruso kept all his promises. The quality he said he’d deliver, he delivered. We have no complaints at all about him.
“It’s been great for 18 months and the bad things that some predicted have not occurred,” adds Najarian. “There’s been no increase in crime, the streets have not turned into gridlock and it has not shut down the Galleria but rather invigorated it, and the mid-Brand stores have done well.”
While Caruso has managed to move most of his condos and apartments, the recession has pushed sale and lease prices into deep discounts. According to an April 17 Los Angeles Times article that quoted the Phyllis’ Real Estate blog, a 1,306-square-foot condo priced at $670,000 had dropped to $410,000, while another unit had dropped from $931,000 to $539,000.
Nonetheless, the complex provides an environment where almost every resident request is met or anticipated, making the steep monthly homeowner dues of $876 to $939 seem almost reasonable.
“People are renewing because they love the lifestyle with room service, maid service, valet parking, and even a dog walking service,” says Caruso as he leads a reporter through his own plush space. “There’s an attendant poolside, so we’ll bring you lunch by the pool. It’s a pretty remarkable place to live — we have a call center like a five-star hotel. You call in and a screen comes up telling us your preferences: you can call out for a light bulb change, travel plans, room service, even reservations.”
And so it is that amid this season of hope, The Americana at Brand and its massive Christmas tree, strings of colored lights, fake snow and holiday specials are bringing good cheer to Glendale after all. With the nation’s overall economic figures finally showing some improvement as well, perhaps it’s a beacon of hope for retailers and shoppers everywhere in America.
“In a general sense, I think The Americana has been an unqualified success for the city,” says Najarian. “It’s done everything we thought it would do — invigorate the downtown, give us a little pizzazz, bring shoppers from outside the city but inside the region into the area and to get people to branch out into Brand and out into the city for shopping elsewhere as well.
“For the people of Glendale, it’s been a great attraction to have a nice place for a stroll and families have places to play for their children and have a place to sip cappuccino. It’s brought in great restaurants, movie theaters, bookstores, clothing stores, shoes and accessories. It’s been great.”
DIGG | del.icio.us | REDDIT