Friday, February 22, 2013

EQUITY ONE CEO DISSES WESTWOOD SHOPPING CENTER: "YOU COULD DO A BACK TO THE FUTURE MOVIE THERE" - WESTBARD SECTOR PLAN UPDATE

The suspense over the future of the Westbard Sector Plan, and the portion acquired by Equity One in late 2012, is building.

Tenants of those properties, and nearby residents, are wondering what Equity One's plans are, and what kind of relationship - cooperative, aggressive, etc. - the firm has with tenants and the communities it develops in.

Recent comments by Equity One CEO Jeff Olson provide the first hints of what's to come, but no definitive answers to the above questions.

I also found out that Equity One apparently has not bought the Westbard properties outright. Rather, it has a mortgage on them, with the option to buy as soon as 2014.

On a media conference call, Olson made his first public comments about the Westwood Shopping Center. If you're a fan of the venerable retail center - like me - you might be a bit offended.  Apparently, where Olson is from, they don't have good, old-fashioned, functioning neighborhood shopping centers.

So Westwood Shopping Center strikes him - as it does many a nouveau-riche newcomer - as a bit quaint.

However, give the guy a break.  He's here for business, and can't be expected to have nostalgia for the place like some of us who grew up around here. Let's give him a chance to meet with the community, describe his vision for Westbard, and explain what types of retail - and restaurants, in particular, of which Westbard has none in the traditional sense - he can bring to any proposed development.

It's important to note that the property is not currently zoned for a town center. I believe a landowner has the right to do anything he or she wants, that is allowed by current zoning.

If zoning must be changed to do it, as in this case, then - like it or not - the landowner has to work with the community to reach an agreement.

What hints I take from overall statements he made about the firm's entire portfolio, is that they do plan to add residential elements to some of their properties.

But they also have some that are retail and big box centers.

Olson's Westwood comments suggest that two things are certain: he definitely wants to develop the parcel closest to Westland MS and Park Bethesda.  And, he wants Giant - parent company Ahold, in reality - to pay more rent. A lot more.

And Ahold's willingness to give up a sweet 99-year lease shows that they're really not attached to this shopping center for the long term.  So the community is in danger of losing Giant in 2019, it sounds like to me.

If that happens, can Olson bring in a Wegmans? That's about the only way he could lessen the outrage of losing Giant.

The other big question: Given the company's expertise in big-name retail, would they be content to operate WSC as a retail center? Or are they dreaming of a massive, urban town center, like Capital Properties was?

The 3.3 acre parcel is currently zoned residential. That will easily be changed under the new zoning code.

Until Equity One reaches out to the community, we won't really know. What I do know is that Westbard is a community retail area designed to provide basic services and shopping (groceries, barber shop, pet store, drug store, gas stations, auto repair, and even watch and shoe repair) to nearby residents.

And it is currently "walkable" for surrounding neighborhoods.

It is not a sensible place for high-density, urban development or a regional destination.

And I noticed Olson used one of those "smart growth" buzzwords, "underutilized." Oh, brother.

The Westbard area has a lot of unacknowledged history in it, and has been disrespected by elected officials and the Planning Board as long as I've been alive.  That prologue absolutely sets the terms for future decisions in the Westbard Sector Plan. There's no negotiation on that point.

Now, here are the words of the new landlord himself, Equity One CEO Jeff Olson, regarding the Westwood Shopping Center:

"[W]e're excited to buy the property. I was just out there this past weekend and I mean it's a very exciting redevelopment opportunity. In many ways...this reminds me of Serramonte, because it's an old large piece of underutilized real estate with incredible demographics and severe supply constraints. But like Serramonte, it's only had one owner since the developer built it and that owner had never expanded the property. So that's as unique in many ways. It was built in 1959 and if you look at the center today it looks like it's from 1959. I think you could do a Back to the Future movie there. It's anchored by a Giant Food with a 50-year lease [not true - Giant had a 99-year lease which they renegotiated for a shorter term a few years ago] that expires in 2019 and they pay $2 bucks a foot in rent. By way of comparison we've some other grocers in our portfolio that are doing similar sales volumes that are paying us in the 40s. And in addition to that below market lease there's a vacant 3.3 acre parcel that's never been developed. So there's a lot for us to do with that center."

9 comments:

Anonymous said...

I just purchased a home in the neighborhood behind the Westwood complex and I would be thrilled to see it redeveloped or expanded. The CEO is 100% correct in his underutilization comments. The parking ratio is at least 5/1,000. Completely unnecessary. As you yourself stated, it would be great to have a pad site for a local resaurant. The Rite-Aid is run down and borderline blighted. That is not character, it is sad.

Nathan said...

Hear, hear! I recently moved to the neighborhood as well and would love to see the shopping area renovated. In particular, restaurants and retail along a nicely appointed street for walking with park benches and lamps would do wonders for curb appeal and overall experience. Let's hope that the new owner is thinking along the same lines.

Robert Dyer said...

The type of tenants in Westwood Shopping Center has changed drastically since the 1980s. Back then, most of the tenants were national brands: Farrell's Restaurant, Radio Shack (still there, obviously), Crown Books, Baskin Robbins, a very useful hardware store, Giant and Drug Fair (now Rite Aid). When developers and politicians began dangling the lure of redevelopment, the big tenants disappeared. As Olson noted, the rents are below market. That is usually the case when a landlord wants short term tenants that can be moved out for demolition of a retail center.

It is certainly possible to add the amenities people want - sit-down restaurants, additional retail, etc. - to Westbard without building 12-story condos towering over the adjacent neighborhoods.

The entire commercial/industrial zone there and along River Road has been neglected by the county for decades. But they're not going to now get away with steamrolling existing residents with a blank check to developers. Any successful redevelopment in Westbard will require cooperation with residents, and for the county and developers to finally restore long-overdue respect for the neighborhood.

Anonymous said...

Target, Marshall's, Petco, and Olive Garden coming soon!!!! Lights...traffic....rats!!!!!

John Vorhes said...

The Westwood Center can be a model of environmentally sensitive development Parking can be partially sunken and multi-leveled with short stair connections and perhaps escalators to a multilevel indoor/outdoor shopping environment. I'd like to see it landscaped to reflect the forests around and creek that runs nearby. Water features - a place to sit and relax- a community focus. The neighborhood is well educated and prosperous, we deserve a shopping center design of national importance - not just another strip mall.

Robert Dyer said...

John, I agree that water features would be great. Washingtonian Center is an outstanding example of that on a larger scale. I think that, as much as we don't deserve just another strip mall, we equally want to avoid Equity One building just another cookie-cutter "town center." Today, you can stand at any point in the Westbard sector and see mature forest in at least one direction. Equity One should prioritize keeping it that way. Dungeon-style parking is a non-starter here. Your emphasis on designs that stress the forest and stream features is squarely on point; I could not agree more. I believe it is possible to add these features, and the dining and retail additions, without massive, urban overdevelopment.

Anonymous said...

Why do you need to renovate this!! I wouldn't mind seeing the brown complex across the street go, but there is no need to demolish and reconstruct the Giant strip mall and the Strike bowling alley. Seeing those go would be tragic and considering I live in sumner across the street there would be parking overflow on my street. This is overall terrible and I need people to protest this with me, they are doing the same thing to White Flint making it modern and so forth. I hate modern, we need classic stores like these, times don't have to change. Anglo Dutch is great, as well as the pet store, liquor store, Giant, and Rite-Aid. Making this a modern piece of crap would force me to move, we don't need a second Bethesda...

Robert Dyer said...

3:16 PM: Yes, parking overflow is going to be a major issue with the amount of residential units being proposed. There are already some cars that park in neighborhoods nearby off and on from the existing residential buildings. There's no reason the existing strip mall can't be kept, and simply add an additional structure over where the empty part of the lot is near Westland. That's what they did at Sumner Place, and they were able to keep some of the old tenants there that the neighborhood relied on.

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