Apartments, hotel again possible for Simi Valley Town Center
The Simi Valley Town Center is again the focus of a possible revamp that could bring residential units and a nearby hotel to the struggling mall.
A proposal for residential construction could go before the Simi Valley City Council around this time next year, City Manager Brian Gabler said.
The city is in talks with The Festival Cos., said Gabler, who described the company as the mall's managing partner. Festival, headquartered in Los Angeles and Honolulu, is affiliated with several limited liability companies that own the bulk of the property, state business filings and county property records show.
City Council member Elaine Litster, whose district includes the shopping center, said she and other council members met in December with San Diego-based Gerrity Group about building apartments at the mall. The following month, council members spoke with developer New Urban West Inc., based in Santa Monica, about building for-sale residential units on the property, Litster said.
It's not the first time residential development has been proposed at the shopping center at 1555 Simi Town Center Way. A proposal in 2018 that called for more than 300 apartments was dropped before it reached the council, and the mall was foreclosed on in 2019. That year, with a new owner — a Festival partner, Gabler said — talks again surfaced about redevelopment possibilities that included a residential component. But the pandemic soon followed.
Council member Mike Judge said New Urban West is proposing condominiums and townhomes. Judge said he liked the idea of for-sale residences better than apartments, but disagreed with the company's proposal to turn three-fourths of the mall into housing.
"That was a deal breaker for me," he said of the idea.
Litster said no more than two council members at a time have met with company representatives to avoid violations of California's open-meeting law known as the Brown Act.
Developers have asked council members about the possibility of amending the Simi Valley Town Center specific plan, which currently doesn’t allow housing, Litster said.
"I can't speak for the whole council, but I think that there is an understanding that there will need to be some kind of mixed-use component with the Simi Valley Town Center," Litster said. "However, we would like it to retain its central purpose, which is a shopping and gathering space for the entire community, not just for the neighborhood that might spring up around it."
Officials with New Urban West couldn't be reached for comment.
Colby Young, a vice president of development at Gerrity Group, declined to comment on his company's interest in building apartments at the mall. Elsewhere in Simi Valley, Gerrity controls Santa Susana Plaza, where it plans to build 280 apartments in place of that mall’s vacant storefronts and unused parking space.
So far, no one has applied for an amendment to the Simi Valley Town Center's specific plan, said Sean Gibson, the city's deputy environmental services director and city planner.
Stumbling blocks cleared
Previously, any plans for residential development at the mall faced a pair of stumbling blocks at either end of the property: two Macy's buildings. During the 2019 conversations about redeveloping the mall, the two buildings, each with a different owner, came up as potential hurdles.
In early 2020, Festival, through a limited liability company, bought the Macy's at the west end of the mall from Macy's West Stores Inc., county property records show. The department store remains the mall's anchor tenant, although Macy's announced in January the Simi Valley store will be closed.
Macy's revealed more details in a letter to the city of Simi Valley and Ventura County, in which it said the elimination of jobs would take place in late March.
In July 2021, another Festival Cos. limited liability company bought the old Macy's building at the east end of the mall. The Macy's East site had closed in 2017, when it served as the men's and home furnishing store.
After the Macy's East acquisition, Rosalind Schurgin, CEO of The Festival Cos., was quoted in a retail industry publication saying the purchase gave the company control of the entire shopping center. She also described redevelopment plans that included a 5-acre apartment project and hotel.
Schurgin couldn't be reached for comment.
Gabler said Festival has left other buildings vacant at the east end of the mall, where the empty Macy's sits, in anticipation of future residential projects.
Town center beginnings
The city designated the site where the center now stands for a regional mall in the 1980s and worked with a number of developers. Forest City, a real estate investment trust affiliated with Simi Valley Town Center LLC, developed the mall, located on the north side of Highway 118 west of Erringer Road.
It opened in 2005. The anchors were Robinsons-May at the east end and Macy's on the west end. About 90% of the storefronts were occupied, Gabler said.
"The vision for it was to create a gathering place for the community where you can go shop and have food and say, 'Meet me at the town center,'" the city manager recalled.
In 2006, Robinsons-May merged with Macy's, launching the now-closed Macy's men's and home store.
The following year, at the end of 2007, the Great Recession struck. The city's hopes for the mall took a dive over the next few years. Stores such as furniture seller The Bombay Co. and apparel stores Abercrombie & Fitch and Anchor Blue closed.
The center also faced competition from nearby malls. The Oaks in Thousand Oaks expanded in 2008. Westfield Topanga added more stores and doubled its size in 2015 with The Village at Westfield Topanga in Woodland Hills.
Some five years after it opened, the Simi Valley Town Center skirted a pending foreclosure sale when the original owners sold the mall, in lieu of foreclosure, in December 2010, county records show.
The new owners, Walton Street Capital and Alberta Development Partners, invested in building stores in 2015 on the mall's west end, creating a section called the keyhole just east of Macy's. Studio Movie Grill, a dine-in theater, opened there that year.
Despite such investments, troubles persisted. The Apple store closed in 2017 along with the Macy's menswear store.
In fact, more than 100 national retailers declined to locate at the mall because of its negative sales history, lack of visibility and excess retail space, a principal with Walton Street Capital said in a 2018 presentation to the Simi Valley Chamber of Commerce. The speaker, Robby Schwindt, called the center an "imploding" mall.
Schwindt described a $70 million to $80 million facelift that included 332 apartments and a park. The old Macy's building would be torn down, shrinking the retail footprint and making way for apartments.
But an hour before a city council meeting where the plan was to be discussed, Walton and Alberta pulled their application. The owners realized they didn't have the council's support, Gabler said. They never submitted another.
Judge, who has served on the city council since 2010, said he objected to the 2018 proposal because it had too many apartments.
By early 2019, the mall owners were in default on a loan they'd taken out four years earlier. The property was sold at a foreclosure auction outside the Ventura County Government Center in May 2019. The trustee's deed shows unpaid debt totaled more than $41.7 million.
The buyer, a limited liability company named Bayside SVTC, bought the property for $27.5 million.
Gabler said Bayside was a partner with The Festival Cos. from the start. Bayside later transferred three main parcels to a different limited liability company affiliated with Festival in March 2020. By then, the COVID-19 pandemic was in full swing.
Hotel proposal
As talk of apartments or condos at the mall returns, other plans are in the works across the street.
A San Marino firm, Paladin Equity Capital LLC, has applied to build a hotel on a vacant strip at Erringer Road and Simi Town Center Way. The site is southeast of the mall's footprint.
The four-story Everhome Suites hotel would have 114 rooms and parking lot with 116 spaces.
The property, about 3 acres between the mall and Highway 118, isn't part of the shopping center. The narrow, grassy site with some trees and a gravel driveway is sometimes used for a carnival or as a Christmas tree lot.
The city determined Paladin’s application was incomplete, which is not unusual for large projects. Gibson, the city planner, declined to comment on the project, as did a Paladin employee whose name is on the application. The Star has filed a public records request to view the document.
Gabler said the hotel proposal won't require a change to the mall's specific plan. Hotel customers could create more foot traffic for the mall, he added.
The city manager said shopping centers are in a state of transition as large department stores close in the wake of internet shopping. But he still expressed high hopes for the Town Center's future.
"The city isn't interested in it becoming another neighborhood shopping center," he said. "It needs to have more of a regional draw."
Judge, the council member, said he'd like to see mall managers think creatively and bring in a car dealership and other new businesses. He wants an entertainment focus with more restaurants, bars, nightclubs and outdoor space for concerts — something he said is lacking in Simi Valley.
"It has to be a center where people in the town want to go, hang out, have a good time, spend money and generate sales tax for the city," Judge said.
Dave Mason covers East County for the Ventura County Star. He can be reached at dave.mason@vcstar.com or 805-437-0232.
This article originally appeared on Ventura County Star: Apartments, hotel again possible for Simi Valley Town Center
