Retailers at Anaheim GardenWalk mall are nervous.
People just aren’t shopping in a downturn that has hit retail hard. That the new mall is sparsely occupied doesn’t help.
The outdoor shopping center next to Disneyland opened in June, just before the financial crisis put a brewing economic slowdown into overdrive.
“It happened so quickly,” said William Stone, principal of San Diego’s Excel Realty Holdings, which developed and runs GardenWalk. “It was such a massive change.”
On a recent weekday, the owner of a clothing shop stepped outside to smoke. The retailer, who didn’t want to give his name, said he has plenty of time to smoke. It calms his nerves, he said.
“There is no one here,” he said.
His suggested fixes: add a toy store, a coffee house, a men’s clothing store and national names such as Victoria’s Secret and Banana Republic.
Those who run eateries on the third-level food court are concerned, as well.
Around the food court are about 15 empty spaces, among a smattering of restaurants including Cinnabon, Sbarro, Rocky Mountain Chocolate Factory, Submarina and The Great Steak & Potato Company.
Lake Forest-based Johnny Rockets Group Inc. just opened one of its diners. Los Angeles-based Tacone Wraps is set to open, as well as a couple of others.
Great Steak’s best customers are construction workers and mall employees, manager Hugo Garcia said.
The mall is busier on weekend evenings when nightclub Heat Ultra Lounge and 300 Anaheim Bowling & Entertainment Center get rolling.
And some restaurants, such as San Clemente’s Bubba Gump Shrimp Co. and Arizona’s PF Chang’s China Bistro Inc., have fared better. They face busy Katella Avenue.
If GardenWalk had opened a year earlier or later, the mall would’ve been better off, owner Stone said.
It’s been a tough start to a project that was years in the making. Plans for GardenWalk go back more than a decade, as developers sought to build a shopping center amid the tourist shops and hotels around Disneyland.
The mall isn’t alone in its troubles.
“Leasing right now on a national basis is extremely tough,” Stone said.
National retailers have slowed or stopped expansions, including Gap Inc., Macy’s Inc. and Starbucks Corp.
Some national chains have filed for bankruptcy protection or gone out of business, including Mervyns LLC, Linens ‘N Things Inc., TSIC Inc.’s Sharper Image and Circuit City Stores Inc.
The tight credit market also is keeping retailers out of the malls, said Doug McEachern, retail real estate partner at Deloitte & Touche LLP’s Los Angeles office.
GardenWalk has offered some retailers rent breaks, according to Stone.
“We’ve worked with some of the tenants,” he said. “You have to be much more creative.”
More Leases Than Tenants
The mall has had tenants sign leases but not move in yet, he said.
GardenWalk is 80% leased but only 65% occupied.
Stone said he had hoped the mall would be filled by the end of the year. Now it looks like it might not be until the second half of 2009.
GardenWalk hopes to bring in some national retailers by mid-2009, Stone said.
Around the mall, 400 planned timeshares are set to start construction in January. Some 900 planned hotel rooms have been pushed back to March instead of January.
GardenWalk is promoting itself through radio, print, TV and direct mail. It also does marketing geared toward the Anaheim Convention Center.
GardenWalk also is working to lure locals. Now that tourist season is over, it has to rely on locals just as Disneyland does.
“It’s hard,” said Corine Fidler, assistant manager at Fresh Produce, a women’s clothing store.
Locals often avoid Katella, with its convention center and Disneyland traffic, she said.
But improvements have been made to Katella so that it isn’t as congested as before.
“Another couple of years from now things will be better,” Stone said.
