Retail real estate developer Centennial may be based in Dallas, but Carl Tash, the company’s chief investment officer, shared his Santa Clarita bona fides Tuesday, recalling when the shopping center his company just purchased had an orange logo after it was first developed by The Newhall Land and Farming Co., like the rest of Valencia.
The announcement Tuesday of the Valencia Town Center’s purchase for $199 million signals the end of an era for the shopping mall that’s long been a vital source of sales tax revenues for the city of Santa Clarita.
Forces such as changing trends in retail in recent years seemed to make this week’s announcement inevitable — the mall went from announcing a $100 million renovation plan to defaulting on a $195 million loan for the property in just a few short years.
In February, reports came out that Unibail-Rodamco-Westfield was defaulting its $195 million loan for the property.
By April — around the time that rumors of a sale began to circulate — the city was working on outreach to develop a plan to try to influence the future plans for the area.
And those same conditions provide a great opportunity for investment, said Tash, a Los Angeles resident of over 30 years, who added he was particularly fond of the way the SCV’s rolling hills complement the drive into a clean area with great schools and a strong local job market.
He discussed his long-term vision for the property and its future audience in an exclusive interview with The Signal shortly after the announcement of the sale was made public.
A ‘mixed-use campus’
Centennial first started looking at the property right before COVID-19, according to Tash, and since then, the conditions have only improved.
“A lot of millennials ‘discovered’ the Santa Clarita Valley and the housing market and the housing market strengthened quite a bit,” he said, adding the area’s growth has continued on an upward trajectory since COVID, as have property values, for the most part.
“What also makes the transaction interesting in our minds is that, as you know, for the last decade, most large malls, virtually all of them have had problems of one form or another. But those problems have sort of worked their way through the system now, and so coupled with this great location we really want to reimagine,” he said, “particularly the town center portion of Valencia Town Center. I think that’s something we’ve done in other properties.”
One of the things Tash alluded to a number of times is the great supporting mixed uses directly surrounding the mall property, such as the office buildings and the luxury apartments, and how he wants Centennial to integrate with these features.
“Though it’s been very retail-focused, particularly with everything that Westfield added to the property, we now want to think about … ‘How do we make this really fit with the community much better than it had historically,’” Tash said.
“It shouldn’t be an island of shopping. It should really be connecting to the community,” he said, adding that’s something discussed in the city’s outreach, which Centennial has followed.
He also said Centennial promised to add some more exciting restaurants to the mix, but no names have been dropped just yet.
Tash said there was no formula for how much of the mall’s 1 million square feet would be retail and how much would be residential, describing the new plan as likely “a little bit of both.”
“We really do think … a lot of people who moved out here probably do still some degree of work from home,” Tash said, referring to a hypothetical millennial who is working remotely two days a week, and now home twice as often as he or she would have been in the past, doubling the opportunity to go out and have lunch or potentially stop at a nearby store.
The reasoning he gave is that a lot of people want to move to the suburbs but bring some of the conveniences of the “urban experience” with them, e.g. a neighborhood shopping center and grocery store within walkable distances of their homes.
“We do think multifamily (homes) will be an important ingredient for the property. I think this community, because it is sort of a newer bedroom community within L.A. I think it’s to some degree always been a bit underserved, with high-quality multifamily and so I think to the extent that we can work with the city and the community to come up with a nice addition of multifamily,” he said. “I just think that will help the properties because now you’re gonna have people on the site 24/7, so that’s just a positive in our mind.”
While the announcement was just made public Tuesday, and Tash said the city and Centennial are yet to have any formal discussions, it was clear as the Centennial officials were walking the grounds by The Shops at The Patios that some tentative planning had already taken place.
In terms of where the work begins, he identified the “box” site next to what was formerly known as Sears as a smart starting point for the redevelopment.
“That’s probably a logical place to start, in terms of what you do as a first redevelopment,” Tash said. “It’s sort of on or adjacent to the Sears parcel, just because it’s most likely that box will get demolished. There could be reuses of that box but given how it sits really up against The Patios as well as the mall, I think it just lends itself well to being sort of the anchor for whatever we plan.”
While the “Westfield” lettering had already been removed from signage as of Tuesday morning, Tash said it would likely be about 18 to 24 months before there were shovels in the ground, although he added that city officials already were working on reports and impact studies that will help accelerate the process and let the developer “hit the ground running.”
Tash also said Centennial was planning to be patient and work on a project he hoped would address the community’s needs for decades.
“We’re going into this with the idea of being patient and then, most importantly … we want to turn this into what I would call a more future-focused, mixed-use campus,” he added. “We’re looking at sort of solving the community needs for the next 10 to 20 years, not just dealing with what’s there today.”