HEATING UP PALM SPRINGS
Don't let these vacant storefronts along downtown Palm Springs' main drag fool you. A major retail redevelopment project is just getting under way on North Palm CanyonDrive after more than a decade of uncertainty. This morning, we chatted with Palm Springs director of community and economic development, John Raymond. He tells that last Thursday, demolition began for the redevelopment ofthe Desert Fashion Plaza, which he estimates will be a $130M to $140M project."It's been a long, painful decade" that could fill an entire book, he says. The inside of the mall has been vacant since 2001--a previous owner planned to redevelop it, andbegan terminating leases.The current owner, Wessman Development, was in escrow tobuy the property in 2001 whenthe 9/11 terrorist attacks hit. The company went ahead with the purchase in November '01, but given the subsequent war there was no leasing activity. The credit crunch, and recession also conspired to keep the mall empty.
Over the years, the developer proposed various plans, including ahigh-rise development that met opposition (tnough it would have been proportionate for this 26-foot-tall statue of Marilyn). John says the city, realizingit would have to come up with some money to help the project, went to the voters in November 2011 for a 1-cent sales tax increase, then raised $43M through the bond market. The city did some street widening and added parking (which it will continue to own). The mall's current condition doesn't help the downtown area, John observes. "If you can turn the biggest negative in downtown into the biggest positive downtown, it helps the entire downtown." For available properties in the city's downtown, the vacancy rate has actually gone down: 7.5% vs. 10% last year.
The positive news doesn't end there. Last summer,the historic Carnell Building--constructed in the 1930s by an heiress to the National Cash Register fortune, was burned out by a fire that likely was started by transients.According to John,the owners, who own a lot of property downtown, have hired an architect and hope to save the architecturallydistinctive second floor, where most of the damage occurred.
