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A CLASS OF ITS OWN

Caruso spared no expense on The Grove in Los Angeles

By Debra Hazel

The open-air center, built in the style of an old Southern California downtown, stands next to the famous and beloved Farmers Market.

A story about Nordstrom sums up the cachet of The Grove, the Los Angeles open-air center that opened in March.

In the shopping center equivalent of the mountain coming to Mohammed, Caruso Affiliated Holdings, the Grove’s developer, didn’t go to Nordstrom; Nordstrom came to Caruso. It even offered to pay rent, something anchors are not accustomed to doing. But Caruso Affiliated still turned the fashion retailer down — at least initially, until Nordstrom upped its offer.

But then, this is no ordinary center. The highly designed 575,000-square-foot Grove, built in the style of a 1930s and ’40s Southern California town center, has drawn not only Nordstrom, but other tenants new to a city that has just about every retailer imaginable. They have combined to create a small neighborhood, complete with a central thoroughfare and small side streets, that is bringing new life to the area adjacent to the locally beloved Farmers Market.

Rick J. Caruso, CEO of Santa Monica, Calif.-based Caruso Affiliated, has spared no effort or expense on this $160 million project.

“You have to have a great sense of place,” he said. “As people’s lives become more complicated, they want a sense of place.”

Caruso was so attentive to detail that he was not prepared even to leave the design and construction of the complex’s cinema to a theater chain. His company co-designed the 14-screen cinema with Perkowitz + Ruth Architects, Long Beach, Calif., to re-create the grand movie palaces of the golden age of Hollywood. Art deco and classical styles combine, as a grand, curved facade with steel-framed windows forms a soaring, light-filled entrance. A classic theater marquee topped by a rotating sign provides instant recognition. The lobby’s original art, club chairs and art deco Venetian glass chandeliers evoke the style of a grand hotel. Mahogany, limestone, onyx and bronze are used throughout the space, along with marble mosaic floors and carved and cast moldings. A grand staircase rises to the mezzanine level.

The Grove’s other buildings are just as richly detailed. Building heights and designs, including art deco, classical and mission, vary to give the impression of a village. The Barnes & Noble, for instance, features a tower with an internally lit lantern finial.

“We put so much detail into them, it was like building 80 different buildings,” Caruso said. The center was designed in-house with the assistance of Elkus/Manfredi Architects, Boston, and plenty of input from the tenants.

Limestone, granite and other quality materials are used throughout, down to the weathered brick paving used to evoke an old city street. Landscaping (including magnolia, palm and eucalyptus trees), gardens and plazas with artwork add to the festive atmosphere, as does an animated fountain that gives a show every half-hour. It’s not unusual to see customers stay for the day, browsing, eating and people-watching, much as in any major city.

Getting to opening day wasn’t easy, however. The 20-acre property at Fairfax Avenue and Third Street, which had been undeveloped for decades, stands next to the Farmers Market, a Southern California landmark for 68 years to which residents are fiercely loyal.

Various proposals over time for conventional malls by developers, including Forest City Enterprises, Simon Property Group and Taubman Centers, encountered stiff resistance from residents.

Caruso’s plan, on the other hand, pledged to complement the Farmers Market with streetscape architecture, complete with a trolley. The double-decker, open-air trolley, which carries up to 62 passengers, links the Grove with the Farmers Market. Built on a platform taken from a 1950s Boston streetcar, the trolley is painted green to celebrate its clean, inductive technology — the car is propelled by a magnetic field, the first such use of the system in the United States. But while the technology is modern, the look is old, with red-oak running boards, brass rails and other period fittings. Inside, two spiral staircases lead to the upper deck.

Originally, the center’s plans had called for nine minianchors. Then Nordstrom came calling. The Grove’s location near film and television studios, Beverly Hills and Hancock Park was so desirable that Nordstrom was determined to get a spot at the site.

“Nordstrom wants to be in the top 10 U.S. markets,” said Amy Jones, a spokeswoman for the retailer. “We look for a compelling mix of retailers, a compelling shopping environment and diversity of retailers, dining and entertainment options. We think the Grove is an exciting center.”

The Grove offers visitors opportunities to do plenty besides shop.

Initially, Caruso was anything but impressed by the amount of rent Nordstrom was offering, though he declined to quote figures.

“I said there’s no way to talk about a deal, so it lay idle,” Caruso said. “Then they called back.” Once terms were agreed upon, Nordstrom built a 120,000-square-foot unit. Pacific Theatres joins Nordstrom as anchor.

Other tenants now at the Grove include Abercrombie & Fitch, Anthropologie, Bodega Chocolates, FAO Schwarz, NikeGoddess and Pottery Barn Kids, all of which are newcomers to the Los Angeles market. Soon to open is Crate & Barrel, a retailer Caruso was so happy to accommodate that he tore down a newly erected building and replaced it with another structure in 30 days.

Restaurants include the Farm of Beverly Hills, Madame Wu’s Asian Bistro, Maggiano’s Little Italy, Morels French Steakhouse & Bistro and Wood Ranch BBQ & Grill.

Extra services were also created to serve the sophisticated market, including rest room attendants and both valet and self-parking.

Though upscale apartments are being built on nearby Third Street, the Grove’s retailers all face inward, without even secondary entrances onto the main streets.

“The retailers didn’t want to open onto Third Street,” which does not have compatible retail and does not provide pedestrian traffic, Caruso explained. Instead, the trolley provides that sense of a street inside the project, he said.

The 18-month construction went smoothly, somewhat to Caruso’s surprise, even though the builders had to work around the Farmers Market, which remained open throughout.

The Grove opened six months ago at about 70 percent occupancy; at press time it was 98 percent leased. The center isn’t releasing sales figures yet, but some of its stores, including Abercrombie, Anthropologie, FAO Schwarz, NikeGoddess and Pottery Barn Kids, are claiming to be the top performers in their chains.

“The biggest challenge is keeping the clothes on the rack,” Caruso said. “FAO Schwarz hit their projections for opening month during their first week.”

Other observers also report the project’s success.

“The perception is that it’s doing well and is a tremendous enhancement to the community,” said Greg Rickard, senior vice president and district manager in the Los Angeles office of Key Commercial Real Estate, a Cleveland-based financing firm. “[Caruso] took an underutilized property and brought it to its best and highest use.”

Still, some openings remain. Caruso is looking for a major jeweler after failing to secure Tiffany, which opted to stay on North Rodeo Drive.

Caruso scoffs at some who have questioned how he could make money on a $160 million project that has received no funding from the state or city.

“We know how to do this from our other centers,” he said, citing three other California projects: The Commons at Calabasas, Encino Marketplace and The Promenade at Westlake — all highly designed, retail entertainment centers. “The rent structure is different, and it’s high,” he said. “It’s great [the skeptics] don’t figure it out.”

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