Sunday, Jun. 07, 2009

Hill: Now that Gottschalks is out of the mix, what's next for Century Center?

Century Center has provided residents living east of McHenry Avenue in Modesto with a shopping option that was convenient and comprehensive in its mix of businesses.

Need some flowers, no problem. Need some groceries, great selection. Need some jewelry, got just the thing. Need some hair coloring, have a seat. Need some greeting cards, take your pick. Need something to eat for breakfast, lunch or dinner, choose a menu.

No matter what shoppers need, this neighborhood shopping center on the northeast corner of Orangeburg Avenue and Oakdale Road probably has it.

And a big part of that well-rounded mix of businesses is Gottschalks, the Fresno-based retailer that filed for bankruptcy earlier this year and now is liquidating all of its merchandise. Once that's done, probably by the end of the month, the longtime retailer with deep valley roots will be no more.

As part of the bankruptcy process, other retailers have been circling the carcass picking off the pieces they want. Forever 21, a Los Angeles-based clothing chain, snapped up the leases for 14 Gottschalks locations, including the 150,000-square-foot Vintage Faire Mall store in Modesto. Its bids are pending approval of a bankruptcy judge Wednesday.

There were no takers for the Gottschalks complex at Century Center, though. When it goes dark in the coming weeks as liquidators consolidate the shrinking merchandise at the two Modesto stores into the Vintage Faire outlet, there will be a huge hole in Century Center.

That will leave east side shoppers with less convenient options and the center's remaining merchants with one more worry in these uncertain economic times.

Gottschalks has been a fixture at Century Center for nearly 30 years, occupying nearly 90,000 square feet. Originally a Gray's department store, Gottschalks acquired the east Modesto store in 1980. At that time, it occupied about 50,000 square feet and the second anchor position in the complex (Raley's remains the other).

Over the years, as adjoining tenants left, Gottschalks moved into those two spots, each one adding about 20,000 square feet. That allowed Gottschalks to expand its merchandise, including the opening of a home center seven years ago that carried furnishings and decorator items.

Despite the awkward layout of the store, the Gottschalks at Century Center was consistently among the top stores in the chain in sales.

How quickly the Century Center spaces are filled and what kind of business or businesses fill them could determine the impact on surrounding merchants.

Kimco Realty, the New York-based real estate development and management company that owns Century Century, could not be reached for comment.

But commercial real estate specialists say Kimco was surprised that Forever 21 didn't want the smaller Century Center site instead of Vintage Faire. Forever 21 typically is in locations with 20,000 square feet or less.

Although the original Gottschalks site in Century Center is more than twice that size, it was seen as a better fit for Forever 21. The lack of retail east of McHenry would seem to make it even more attractive, especially given Gottschalks' success there.

But that didn't take into account Forever 21's desire for larger spaces to grow the chain, something retail experts agree is critical to survival in any economy. Besides, given the liquidation, the price was right for Forever 21 to make the jump to bigger spaces. That left Century Center out in the cold -- for now anyway.

Tim Bettencourt of CoSol Real Estate, a Modesto commercial realty firm, recently attended a shopping center and mall conference. Bettencourt and his counterparts were told most of the major retailers and chains aren't planning any expansions this year unless they were already in the pipeline.