Missing the Target

If you've been keeping up with the real estate development headlines lately, you might have noticed that every big, ambitious LA development plan includes a Target as its desired anchor tenant. Projects at various phases of development in Mid-City, Crenshaw, Hollywood, Westwood, and Downtown all tout Target as their crowning retail centerpieces. Some actually have the stated support of the Target Corp., while others merely crave the discount store's shiny urban appeal or its supposed potential to spur surrounding retail growth. The CRA has been lusting after Target for years in its attempt to turn a stretch of Washington Blvd south of Downtown into a dense big box haven. Oxymoron?

But why target Target? Perhaps developers point to the success of the West Hollywood Gateway, a project that has seen enormous traffic for its own tenants but has done little to turn around that languishing stretch of Santa Monica Blvd in eastern WeHo. Or perhaps they see Target much in the way the rest of us see it: as the hipper, cleaner alternative to those other trashy discounters we are loathe to visit. But the truth is that as a company, Target is in no position to expand its retail locations as aggressively as these developers might like. Neither is the Los Angeles customer base large enough or desirable enough to support a wealth of new stores.

Wal-Mart on the other hand, may take the cake on both these fronts. It is Wal-Mart, not its snooty rival, that has benefitted most from the recession, as many consumers seek deep discounts on their purchases rather than cut them out altogether. Secondly, Wal-Mart is aggressively studying a plan to roll out a new retail format that is much smaller than its traditional supercenter, and better fitted for urban real estate and the urban consumer. With Wal-Mart's small town and suburban locations built out, and no signs of slowed growth, that company is turning to a new potential demographic - a smart move considering the increasing costs of suburban living and the languishing retail opportunities there. Furthermore, Wal-Mart has but one location in our city limits (albeit a successful location), housed in a stately multi-story Baldwin Hills Crenshaw Mall location that was once home to a Sears. Should their new urban shop implementation work, I see no better place for a roster of mini Wal-Marts than Los Angeles. And as long as our developers are scrambling to attract their treasured Target, Wal-Mart is sure to score some good rental deals.

Mid-City Hole in the Ground…Still Just a Hole in the Ground

Ever driven by that gaping wide expanse of dirt and grass near the confluence of Venice, Pico, and San Vicente Blvds. and wondered – “Who owns this land and what is going to be here?!” Apparently Lowe’s home improvement retailer earmarked $18.5 million in 2006 for an outlet on the site, dubbed ‘Midtown Plaza.’ According to the company’s press website, the project was expected to be completed in winter 2008!

Adjacent to the site, on a triangular lot fronting against Pico Blvd. and San Vicente Blvd. is a small retail mini-mall with a crowded bus terminal and no visible parking. The tenants include Wells Fargo and Panda Express. The Flatiron shape of the intersection and the prominent placement of a billboard for Spa Luce (?), give the building a Times Square-wannabe feeling. Adding to this aspiration is the rendering on Mayor Villaraigosa’s website, which also touts an initial $114 million investment and development by CIM Group.

According to most sources, the project was supposed to be completed all together, with two big box retailers stacked on one another and smaller retail at the front, reminiscent of the West Hollywood Gateway at Santa Monica Blvd. and La Brea Ave. Maybe the project lost funding after the first phase or maybe the large tenants dropped out of the running. Don’t think Lowe’s is slowing down its expansion though – in 2009 alone it has announced 19 new store openings. (Don’t they know that consumers can’t improve homes they don’t own anymore?)

Either way, the only action this lot has been getting is a periodic spray-down by a water truck…airborne dust never looks good to prospective buyers.