Buena Park Downtown Manager Working on Leases, Eyes Big Retailers

Not bad for a former cereal salesman.

De Leon recently talked with the Business Journal’s Sherri Cruz about putting out fires and future plans for Buena Park Downtown.

How did you get into mall management?

It just happened to be that I was in San Antonio, Texas, at the time I got the (Westfield) job offer. I was looking to come back home because we just had our newborn. Home is Los Angeles. It just fell in line. If it were a management position for hotels, I’d probably be in hotels, in all honesty. Mall management wasn’t at the top of my list.

Well that says a lot.

Yes, management is management.

Now that you’ve been at it for a while, how’s it going?

I’ve moved my way up. Every year I have a position increase or a promotion. This industry has been very good to me.

How do you get a promotion every year?

In the mall management world, a promotion is when you get a larger center because a larger center generates more revenue. More revenue means more ability to pay your salary.

That must be why people in the business seem to pop up in different places every few years.

Yes, we are a tight-knit world. Moving up in (Southern California) means moving to different centers, being that the area has the most centers per square foot in the U.S. So instead of moving to different parts of the country like somebody in Montana might have to do, we just move to a different one.

Now that you’ve been in the industry for a while, is there anything unique to mall management?

The beauty about mall management is that you’re not only managing your staff and managing your budget, you get to do different things such as leasing. I lease out space or assist my leasing manager in leasing out space. I do deals in essence. Also, you get to put together a marketing plan, which is done one year prior to the year it pertains to. Then you run with it and see how successful it is in generating traffic. It adds to my skill base. It’s a nice little job that we have here.

As far as leasing, do you meet one on one with each retailer?

Yes, I am the person they meet. The tenant or the client meets on site and I show the space. I show the mall in a fashion that would fit their need. I answer the questions they want answered versus the leasing agent who handles the financial mechanics of the deal.

Do they see the leasing agent first or you?

It goes hand in hand. If they want to see the mall first, to see if it’s worth it to talk to the leasing agent, they’ll come to my office. But if they know they want to do a deal, then they’ll talk to leasing first.

Who would you like to see at Buena Park Downtown?

The Gaps of the world. Limited, Victoria’s Secret. All those conversations are happening. It’s just a matter of getting to a deal that is acceptable by both parties.

What are their objections?

This center sustained a significant hit when it went into redevelopment (remodeling finished in 2003). During that time, traffic and sales decreased dramatically based on the fact that we were doing construction, or prior management (Festival Cos.) was doing construction. We’re getting really close. It’s the second year that the mall has been open in its new fashion since the redevelopment.

I’ve heard it’s been really busy.

It’s been very busy. For the past few years, we’re probably at the best point this mall has seen in many years.

When do you make a marketing plan?

We’re already done for 2006. We usually complete that in August.

How much of the budget is marketing?

About 10% of our total budget. We provide customer service, the labor involved in that, Web site maintenance. We have events throughout the whole year for every single large weekend. We’ve taken the stance that we want to gear it toward family and kids, so we actually have arts and crafts to promote the family sense in this center. Christmas takes a significant part of our budget because we have to take care of the decor.

Is this mall intended to be more entertainment driven?

There are two pieces of the pie here. The rear, which is anchored by the 18-screen Krikorian theater. The plan for that location is to be an entertainment venue. The interior of the mall is going to be a typical enclosed center for the community of Buena Park where we’re anchored by Wal-Mart and Sears. We have all the small shops inside, Ross, DSW, Bed Bath & Beyond and soon-to-be Tower Records.

How important are theaters?

In their world,movie theater world,they’re not profitable when studios don’t generate movies. When studios generate movies, they are profitable. It’s important for a mall to have a theater because it’s a consistent people gatherer. People come to the movies. When people come to the movies they come to eat. After they come out of the movies, typically they don’t want to just go home. They walk around the mall. It actually adds incremental sales for us.

Sears wasn’t part of the remodel? Does it plan to? Do you have any say?

Sears and Wal-Mart own their parcels. We actually don’t have any say. We have talked to them quite a bit about things, from buying the property to “Why don’t you remodel?” We’ve tried to get them to fit the motif of the center. They’re going through some cash flow issues with the purchase of Kmart and what they want to do with their look. But Sears is a pretty good company. They’ll come through.

Is there a trend in malls nowadays?

The lifestyle trend is still up and going. It’s really only Los Angeles or OC because our weather is conducive to that type of center, where they’d make it an outside center, where you can walk around and it looks almost Venice, Italy-like.

We’re definitely steering away from the super large centers where the mall was the gigantic South Coast Plazas of the world or wanted to be. Now malls realize there is South Coast Plaza, there’s Century City, there’s Topanga or Glendale Galleria. But we’re going to leave them as the super huge malls. We’re going to concentrate on our own neighborhoods. That’s what we try to do here at Buena Park. We know we’re not going to be them, so let’s give our community the best that they deserve.

We manage across the street (a smaller set of shops) as well. Lucky for us, that’s almost fully leased out. We have one vacancy.

The mall is nearly full now.

That’s very good. The remaining are the small shops.

How important is it to have boutiques?

It is always important for every center to have something unique. But being that Irvine Spectrum Center and South Coast Plaza are right around the way, they typically gather the boutique customer. This center is primarily for blue-collar Buena Park. They’ll buy some boutique items but mainly they’re here to buy everyday items. I think my customers would be upset if I brought in a boutique store over a Victoria’s Secret.

Portillo’s is an example of a small booming business.

It’s an everyday restaurant. Its business plan in Chicago is based on not being in the urban areas but rather in the suburban areas. They don’t have anything except for one restaurant in downtown Chicago. When they picked Buena Park, they geared their demographic study on where in Orange County and Los Angeles it is almost like a suburb. Buena Park fits their criteria. They sell a gamut of things. But a lot of the items are very reasonably priced and it’s based around salads and hamburgers and hot dogs.

Does the mall get much of the spillover?

We get a lot. Wal-Mart is definitely getting a lot of spillover from Portillo’s.

Having a Wal-Mart is great for business. But how about as far as public relations go?

I would say yes it is a detriment for some centers. For my center it is not. Buena Park, similar to Anaheim, has a tourist community. Knott’s Berry Farm is right across the street. People come to the hotels or motels on Beach Boulevard and don’t stay one day but rather for several days. During that time they need things that are typically bought at a Wal-Mart. So we actually get a lot of business because of the tourists. When they go to Wal-Mart, they’re going to walk inside the mall.

What is the average lease price per square foot?

(Declined to say.) We are up 9% over last year.

What do you need more of?

A lot of clothing. Definitely men’s wear. We need nighttime lingerie. We don’t have that. Everything else we have. We just need a different variety. Pacific Sunwear should be coming on board fairly shortly. So that fills what I call the surfer or young kid niche. Along with Anchor Blue, that should be sufficient. We just have to work our way through it.

How important is it to key in on the young people?

It is important to a point. But we’re more focused on the stores that provide for the family. It would be better for us to get a children’s store than a young adult store.

What about the growth of strip malls?

That’s why we built the rear area here because people are attracted to that look and that feel. I think that’s more of the up and coming attitude toward architecture. That’s going to be the primary focus of all developments coming forward. I just don’t see the enclosed mall completely going away.

How much space is open in the entertainment center section?

Out of 17 spaces we have, we only have eight filled.

Are you rethinking that space?

No. The reason why people aren’t biting on exterior leases is because we’re not filled on the interior. They say, well, you have to fill in your inside mall first before you fill your outside. Once we get the inside filled, then definitely it will spill to the outside.

What sort of tenants would you like to see there?

Definitely food and stores that cater toward entertainment for the family. There are a number of companies out there that do things like that. But we just haven’t had a chance to get them in the door.

How often do you talk to corporate?

I talk to my corporate office on a daily basis. The field is actually what runs our corporate office. They depend on what we deliver to them as information. They can only see so much on the computer screen.

How big is the vendor cart business?

It’s very huge. It’s a significant piece of our income. For some reason a lot of people shop those types of venues.

Why?

Those vendors have the capability of carrying one or two items, and those one or two items happen to be the hot items for the year.

How many carts do you have?

I have 17.

How many carts can you have?

All the way up to 30. Obviously I’m not going to put them in an aisle where we have no stores around it. They typically suffer. We don’t like to put them in a place where we know they’re going to fail.

What are you working on when you come in on the weekends?

I’m there studying the traffic because a lot of tenants try to sell a story that traffic was down. When I’m here I get to see what is happening during the most successful part of the year. It’s nice for the customers when you come in. I carry a radio. When I hear traffic that says there’s a customer complaint, I like to come down. I like to help the customer, because every customer says, “I like to talk to your boss.” Well, I’m the boss.

What are those situations?

They are usually a conflict between the retailer and the customer. I usually opt to help the customer out and I don’t make my tenant ever look like the bad guy.

Insurance must be a big expense.

Liability and workers’ compensation is a huge expense. I’m only allowed to get to a certain point every year. I want to make sure our housekeepers, our security guards are doing their daily routines to take care of the center so that we minimize claims.

What are your biggest expenses?

Labor, followed by electricity.

How can you control electricity?

Our No. 1 user is our air conditioning and lights. We keep them running at efficient levels. If you neglect certain things like the lights and the air conditioning, it makes a significant difference.

Once leased up, will you be moving on?

I don’t see my company keeping me here if my work is all done. I am also always trying to better myself.