Saturday, Nov. 15, 2008

Flagging economy couldn't halt Modesto mall expansion

Vintage Faire Mall opened in 1977, in the heyday of the enclosed shopping center.

The Village at Vintage Faire, an expansion that had its grand opening Friday, has turned that business model inside out.

The expansion, featuring high-end stores and sit-down dining, is built around an open-air plaza.

This combination of pricey shops and outdoor ambience is what retail experts call a "lifestyle center." More than 200 of them have been built in the United States since the trend began in the late 1980s, but this is Modesto's first.

"It really enables the retailers to have a better expression of what their store is about," said Kenneth Gillett, senior vice president for property management at Macerich Co. of Santa Monica, which owns Vintage Faire.

He took part in an invitation-only celebration for Modesto-area leaders Friday morning, nine hours before the public got its shot.

The expansion added about 60,000 square feet to the mall's 1.2 million,

and 12 tenant spaces to the 130 in the

mall. Macerich officials have not said how much the expansion cost.

BJ's Restaurant & Brewhouse opened in the annex in August. The Apple store and three women's fashion shops -- Bebe, Coach and Coldwater Creek -- did so this week. Sephora beauty supplies is coming in early 2009, to be followed by six unnamed tenants.

The expansion is expected to employ about 300 people.

Macerich executives acknowledged the weak economy, and that the coming holiday season could be a tough one. But they said their research shows that the Modesto market has long-term potential for these new-to-the-area stores.

"There is a sophisticated consumer that is really desirous of what's here," said John Genovese, executive vice president for development.

Vintage Faire has long had some higher-end stores, along with fountains, benches and other plaza-like touches under its roof. It also added several restaurants with outside entrances during a major renovation in 2001.

What distinguishes a lifestyle center is the heavy concentration of these features.

"It's basically just an evolution in the industry," said Erin Hershkowitz, spokeswoman for the International Council of Shopping Centers in New York City. "Just like any industry, the shopping center industry has to reinvent itself."

Evolution of retail

That process goes back more than half a century, to when many downtowns started giving way to commercial strips such as McHenry Avenue. They were followed by enclosed malls, then by big-box stores, outlet centers and other changes.

The first lifestyle center is believed to have been created in Memphis, Tenn., in 1987 by Poag & McEwen, a developer in that city. The same firm just opened a Manteca center named the Promenade Shops at Orchard Valley, which includes Bass Pro Shops and a cinema complex.

Lifestyle centers were just 1.2 percent of U.S. shopping center space last year, according to the industry group, but they keep coming, especially in the South. The Council of Shopping Centers lists 116 that could be completed by 2011.

Just one enclosed mall has been built in the nation since 2006, and the next will not open until 2009 or 2010, Hershkowitz said.

Some lifestyle centers are self- contained, while others are additions to malls. Some have town houses or other living spaces.

"The idea is to generate a number of reasons for people to come to the lo- cation," said James Tenser, a retail consultant in Tucson, Ariz.

He praised Macerich for following through on the Vintage Faire expansion despite the economy.

"You've got to give the developer credit for bringing it to the next level," said Tenser, whose firm is VSN Strategies. "I'm glad to see the companies are not, in a knee-jerk fashion, stopping plans for investments like this."

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.