FUTURE OF PARKWAY PLAZA MALL REENVISIONED

City awaits Council’s next motion

By Rachel Williams

July 14.2024 (El Cajon) -- With online sales taking a bite out of retail traffic, shopping malls across the U.S. are struggling and some have closed down. Seeking to avoid that scenario, the City of El Cajon commissioned a market analysis envisioning redevelopment options for Parkway Plaza,  East County’s largest regional shopping mall.

Council members unanimously favored a motion to move beyond proposed aspirational measures and begin the next step toward transforming Parkway Plaza into a mix of residential, retail, offices, entertainment and community space.

These “Eatertainment” facilities would combine compelling, traditional dining options and immersive sport-centered bars with unique, dynamic lifestyle retail shops, all oriented around a linear park.

The biggest takeaway from this market analysis is that the community wants lower-cost products to provide the City of El Cajon with the most opportunity. Right now there isn’t a product representing this type of brand or environment.

"Parkway Plaza is grateful for the City of El Cajon’s interest and investment in the future of the shopping center. We are truly excited to see the city’s vision and look forward to the potential of working with them to continue evolving the property to meet the needs of our community,” Daisy Melena, General Manager of Parkway Plaza, said.

Hunden Partners, a leading advisor in destination real estate development, paired with 505 Design and conceptualized two plans for Parkway Plaza as an epicenter or heartbeat of the community; a place to work, play, visit and shop.

“You’re in that transition phase where if you let it go too long, it’s going to go in a direction you’re probably not too fond of, so it’s a great time to assess the situation and the opportunity,” Rob Hunden, Hunden Partners, said.(Photo, right)

The team aims to transform the dying mall from a stop-and-go destination with fast-food eateries and retail shops to an economic hub serving locals within 25 miles, catering to all residents. It’s a mixed-use, district-based design, including local multi-family properties, creative or medical offices, restaurants to attract families and outdoor space for community gatherings.

One redevelopment plan reduces the physical interior of the mall by 50% and reinvests 25% back. An alternative option would keep the existing mall but eliminate Walmart on the south side. Along Fletcher Pkwy, the reimagined blueprint shows a cluster of retail shops, and restaurants, introducing two hotels of 120-to-150 rooms aligning Highway 8.

By eliminating Walmart and repurposing one of the parking decks, a development of 300-to-350 residential units could provide shelter and create more than 1,500 blue-collar jobs during the construction process.

Okazaki pitches a second vision that concentrates the strongest tenants on one end, peeling back the mall to the center food court and reinventing its staple movie theater into an outdoor dining scene, with a smaller curated section of retail, restaurants or office spaces, and residential properties, creating symmetry and a unified destination.

“Once you start luring in lives and mixed-use amenities, all the sudden you start to shift the dynamic of what you can create and people start to visualize your property as something other than just a mall, then you start seeing a district,” Carl Okazaki with 505 Design said.

This alternative blueprint would keep Macy’s box, owned by Tourmaline Capital, and Sears’ box, owned by Citivest, utilizing it as a shell for another tenant. With dining on either end, an indoor concourse would head west to an outdoor pedestrian promenade,  anchoring those tenants under two ownership groups.

“You start the first phase. I don’t say that to be reckless or without a master plan. I don’t say that to be cavalier in the overall project, but time is money,” Councilmember Steve Goble said.

While Councilmember Michelle Metschel agrees the community needs to move forward expeditiously because she believes this project will improve the city overall, the residents are clamoring for more entertainment, restaurants, and a better spot to gather.

The reimagining of Parkway Plaza could provide more economic stability, and the number of jobs produced in the building of phases one and two is worth it, once it’s built, even more jobs will be created for the community. With these upgrades, Metschel anticipates crime reduction.

“We’re not gonna have to worry about getting more car dealerships in, and I think that we will keep our residents here if we have entertainment spots, venues that will keep the younger kids here once they get old enough to have families or out on their own,” she says.

Brenda Hammond, a meeting attendee and longtime resident of Lemon Grove, started going to Parkway Plaza, the center of El Cajon, in 1972. She’s hopeful this next generation will continue to gather at the mall for silly, fun times. 

“I was 12 years old. And we were so used to College Grove and Grossmont Center, we wanted something new to come down to East County, and we could just go down Avocado, we called it the back way, the old 94,” Hammond reminisced.

Once citizens reside on-site, services and products will follow suit, Goble called upon smaller landowners to seize the opportunity, pioneer and bring forward housing properties for the community.

Hunden says the number of residents in the multi-family property development is only a drop in the bucket relative to the number of residents who drive to visit the mall, but could generate frequent visits as opposed to once a month.

“I think we need to do something with that mall because it may end up like many other malls that become defunct and that’s one of our major sales-tax generators, and we don’t want that to happen,” Councilmember Gary Kendrick said.

Constraints from different landowners will need more financial analysis, according to Vince DiMaggio, the Assistant City Manager.   A big part of developing this further is sitting down with the stakeholders who own sections of the land, such as Starwood Capital Group, Tourmaline Capital, Citivest and JC Penny.

“There could be a short-term investment, maybe by the city, that then flips around and becomes a long-term benefit,” Hunden concludes.  “All of these properties are in a bit of a bind and they’re looking for a way out.”

This project is expected to have substantial economic benefits and increase the city’s revenues by at least $10 million yearly. However, certain material costs are needed for the residential section to ensure maximum quality assurance. Below shows that 45% of gap funding is needed to recapture the new net spending or taxes due for this project.

The reimagination of Parkway Plaza will be subsidized in the form of supportable private financing and gap funding. The City of El Cajon and the private sector, comprised of three entities, according to Hunden, would be responsible for figuring out the gap funding, likely implemented through land-use controls, zoning, and support from the Enhanced Infrastructure Financing District (EIFD) as a tool for this vision, DiMaggio said.