SF New Developments

Retail developers look up!

San Francisco Business Times - June 30, 2006

by Ryan Tate

A group of national real estate developers is working with city officials to plant a highrise mall in downtown Oakland.

The publicly traded companies, which were not identified, are interested in multi-level retail like Crocker Galleria or Westfield’s San Francisco Centre combined with commercial office space, said Oakland Redevelopment Director Dan Vanderpriem.

The interest comes amid a series of recent inquiries from retailers, Vanderpriem said, including a national retail center developer interested in building a lifestyle center, and various big box retailers like Target, which has inquired about a site on upper Broadway.

“That’s exactly how the residential thing started years ago — little inquiries like these,” Vanderpriem said, referring to condominium pioneers who kick-started Mayor Jerry Brown’s 10K program to build downtown housing. “This is the next phase.”

Oakland has long wanted to attract more retail to build its sales tax base. But retailers are hesitant to move into areas without residents or where residents don’t have much money to spend. The sale, construction and ongoing development of condominiums in downtown Oakland has made the area more attractive to retailers.

Retailers “recognize that having the people downtown gives you eyes on the street,” Vanderpriem said.

Vertical malls are increasingly popular in space-starved urban centers. In addition to Westfield, projects recently have popped up in Houston, Miami and Chicago, among other places.

Councilwoman Nancy Nadel confirmed that she had been helping the development group search for sites, including land held by Shorenstein Co. adjacent to Shorenstein’s City Center office redevelopment. But it appears doubtful the vertical mall will rise from Shorenstein land, Nadel said.

Nadel declined to comment further. Both she and Vanderpriem emphasized that the discussions are preliminary. The development group has not determined how large the mall would be or where it would go. It also has yet to conduct market studies.

But Vanderpriem said the group is planning an “outlet mall” concept featuring both high-end and discount stores. The mall will probably be closer in height and size to the smaller Crocker Galleria than the larger San Francisco Centre, he said.

“It’s at the conceptual level,” Vanderpriem said.

Ryan Tate covers East Bay real estate for the San Francisco Business Times.