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Community Corner

City Releases Flawed Mall Study

Well it should be no surprise that the City has released its one-week wonder so called mall feasibility study just days before a critical waterfront mall vote next Tuesday. It should also be of no surprise that this study is highly flawed.

Not surprising as the consultant was only asked to start it a week ago. What it contains is a demographic data analysis, opinions, and a lot of disclaimers. Given the limited scope it relies heavily on Population and Household growth forecasts. The major flaw in the whole analysis is that the consultant did not verify forecast growth rates with actual historic rates. It is not off by a little, but off by a lot. It materially overstates area income growth by a factor of more than 10. Let's look at the bare facts.

Consultant estimates 3.7 percent Population growth between 2013 and 2018. The historic fact is a 10-year average growth rate for Redondo Beach of only 0.23% as Population only grew from 65,844 in 2003 to 67,396 by 2013. Consultant estimates Household growth at an incredible 4.3 percent annual rate. The historic fact is a 10-year average growth rate for Redondo Beach of only 0.39% as Households only grew from 64,378 in 2003 to 66,965 by 2013. The Population forecast for all of LA County between 2015 and 2020 is only 0.70% percent. You can find this data in Tables E-5, E-8 and P-1 on the California Department of Finance website under Demographic Research Unit. The consultant could have found it also.

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This is classic garbage in, garbage out. This study overstates income growth and as a result overstates retail demand growth. City staff apparently has no problem with this. The first big assumption on a long list of big assumptions in the report states “demographic data supplied by national and local sources are accurate, reliable and reflect both the current and projected population base in the defined trade areas” This does not mean you can fabricate any growth rate you want and get away with it.

One thing this study does make clear is that City staff is proposing mall type retail development. The consultant discusses competition from Del Amo Mall, South Bay Galleria Mall and Manhattan Village Mall, but completely missed the Plaza El Segundo Mall. They do not even discuss the Long Beach Pike waterfront area, the Ports-o-Call waterfront area, or Santa Monica Pier waterfront area as competition in the tourist segment. The City has selected a mall developer and now the consultant also considers malls as competition to what CenterCal is proposing. If you want a typical mall packed with national chain retail and restaurant mall tenants, and some people probably do, that is where this is clearly headed.

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My observations are based on 30+ years of commercial real estate experience performing feasibility studies and appraisals on all sizes of commercial property. I also spent 4 years on the Redondo Beach Budget and Finance Commission, promoting sustainable fiscal policy. I worked at an international accounting and consulting firm for 5 years and we would spend one week just visiting a property and writing up a valid and focused scope of work for the proposal phase only. A real study for a project of this magnitude should take 8-12 weeks.

Please join your neighbors following this issue in asking your Council Member to stop focusing only on an overly dense chain tenant mall concept and prepare a valid smaller scale waterfront-oriented revitalization alternative for the EIR. A 480,000+ square foot “mall only” EIR will be a waste of 18 months and the $1 million it will cost. We need to prepare a realistic smaller-scale, waterfront-oriented revitalization scenario as a valid second EIR alternative and not just compare the mall to an unrealistic “do nothing” scare tactic alternative which no one supports. You can make a difference if you make your thoughts known at the next council meeting on Tuesday Nov. 19th.


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