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MILLS TO REVAMP DEL AMO FASHION CENTER

BY IAN RITTER

Sales weren’t exactly lagging at Del Amo Fashion Center mall when The Mills Corp. bought it for $442 million a year ago.

With sales per square foot of about $400, Del Amo, one of the country’s 10 largest malls, according to ICSC, was doing better than the industry average of $345 per square foot.

But Mills is undertaking a major remodeling of the 2.1 million-square-foot center, which is located in Torrance, about 20 miles south of Los Angeles in Southern California’s South Bay area. And company executives say they hope the remake will push those sales above the $500 per-square-foot mark.

“It makes sense to create a new Del Amo and bring new life to it, because it was a little tired,” said Kevin Kudlo, a Mills group vice president who is heading the redevelopment. “We have an opportunity to turn a good shopping center into a great shopping center.”

In recent years Del Amo has lost shoppers to regional centers such as Glendale (Calif.) Galleria, as those consumers have gone in search of more-upscale alternatives, Kudlo says. To combat this, Mills is converting part of the center into a 300,000-square-foot, open-air entertainment venue with two levels, in addition to bringing in some high-end fashion chains and smartening up the interior.

The only tenant Mills has announced for that new entertainment wing so far is a 16-screen AMC, which will go on the second floor. Mills also plans to bring restaurants to the outdoor portion, along with fashion chains and other tenants commonly found in lifestyle centers.

Much of the outdoor area, which is set for completion next fall, is being built on the site of a former Montgomery Ward store.

The developer has a five-year plan for other improvements. On the mall’s north side, Mills plans to build a new department store.

Before Mills, the family-run Torrance Co. owned Del Amo, which was built in 1975. The center underwent few changes over the years, says Jodi Meade, SCSM, a retail investment specialist in the downtown Los Angeles office of CB Richard Ellis.

“It’s a tired mall,” Meade said.

But Mills is determined to perk it up to meet the challenges from not only Glendale Galleria, but also Madison Marquette’s extensive 2002 remodeling of Manhattan Village, a mall and open-air center hybrid in nearby Manhattan Beach. Manhattan Village has drawn the bulk of the area’s upscale consumers, says Meade. (Madison Marquette sold Manhattan Village to RREEF in May.)

To boost sales the way it wants to, Mills must attract customers from the nearby upscale communities of Hermosa Beach, Manhattan Beach and Rolling Hills Estates, she says. It certainly can’t rely on Torrance itself, which is more of a middle-class community.

One thing Del Amo has going for it is easy road access off busy Hawthorne Boulevard. And Mills’ development track record, coupled with its strong tenant relationships, can’t hurt either, says Meade.

“If anybody can pull it off, certainly the Mills can,” Meade said. “It’s certainly going to change the shopping experience, which is what they need to do there. There hasn’t been a change for 30 years.”