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  • Manny Crisostomo / mcrisostomo@sacbee.com

    Dave Tillotson of Georgetown plays with granddaughter Cassie Tillotson, 3, at a patio in the Pavilions shopping center on Fair Oaks Boulevard. A rejuvenation plan for the outdoor mall calls for the patio to be used for live music, fashion shows, food and wine tastings and other events to entice shoppers.

  • Manny Crisostomo / mcrisostomo@sacbee.com

    The 70,000-square-foot Pavilions outdoor mall has boasted the only Sacramento locations for several upscale designer shops and some of the area's best restaurants since opening in 1984, but recently it has had key vacancies and declining sales. A revitalization campaign seeks to turn that around.

  • Manny Crisostomo / mcrisostomo@sacbee.com

  • Manny Crisostomo / mcrisostomo@sacbee.com

    Key departures pushed the Pavilions' vacancy rate as high as 20 percent at one point, says Retail West broker Bobby Rich. Now, though, with the recent lease deals and talks under way for all the remaining space, Rich predicts Pavilions will be 100 percent occupied by the end of summer.

Pavilions shopping center planning a comeback in Sacramento

Published: Sunday, Mar. 3, 2013 - 12:00 am | Page 1D
Last Modified: Sunday, Mar. 3, 2013 - 9:17 am

John Saca recalls spending afternoons at the Pavilions Shopping Center in the 1990s, listening to live music and hanging out with friends.

"It was our version of midtown," Saca says of the Fair Oaks Boulevard center, Sacramento's first upscale shopping locale. "It was the place to go."

The Pavilions may become just that again, thanks to a revitalization campaign being sparked by new tenants, a refocus on entertainment and the arrival of a couple of crowd-drawing neighbors.

The goal is to breathe new life into a 70,000-square-foot outdoor mall that's boasted the only Sacramento locations for several upscale designer shops and some of the area's best restaurants since opening in 1984 but recently has had key vacancies – and declining sales.

The newest tenants are a Café Bernardo restaurant and a Studio 55 salon, both of which are opening this summer, taking up a combined 11,000 square feet.

The bigger news is a campaign under way to bring indoor and outdoor entertainment to Pavilions' central Ventana building and the adjacent 3,000-square-foot patio that's distinguished by a water feature and, beside it, a statue of two matronly shoppers.

Plans call for the patio to be used for live music, fashion shows, food and wine tastings and other events all designed to "young up" the center and make shopping at Pavilions more enticing, says Bobby Rich, a Retail West broker who is working with Pavilions' owner, Costa Mesa-based Donahue Schriber.

"There has to be more to shopping than just walking in a store. It has to be … an 'experience,'" he says.

To that end, Rich and his associates are out recruiting a different sort of tenant group for the 7,000-square-foot Ventana building, which now includes a mix of tenants, including the Ventana Art Gallery, that are on month-to-month leases. Rich isn't identifying any of the targeted retailers, aside from saying there's hope they'll provide some synergy with Williams-Sonoma, the longtime Pavilions anchor tenant that's a magnet for local foodies.

A spokeswoman with Donahue Schriber is a bit more forthcoming, saying the company is looking at bringing in a craft beer garden concept and specialty coffee house, among other possible options.

"We want it to be a place where you can hang out," says Heather Beal, a leasing executive with Donahue, which bought the center in 2006 from its original developer, the late Robert Powell. "People want to be social. Let's create a sense of place (for that) at Pavilions."

Bringing more entertainment into retail centers is a national trend, says Garrick Brown, research director for real estate firm Cassidy Turley BT Commercial.

At industry conferences, "the buzzword is experiential retail," Brown says.

The broader goal: to combat the inroads made by online retailers by "giving shoppers an experience that e-commerce doesn't."

In many places, he adds, that includes bringing grocery centers into malls – an unheard-of practice decades ago.

That's not the plan at Pavilions – because it's unnecessary. An upscale Fresh Market grocery store is set to open this fall, next door to Pavilions, at the site of the former Borders bookstore that closed in 2011.

The store should be a big asset for Pavilions, bringing more shoppers to the area than Borders ever did, says Mark Friedman, a Sacramento developer who lives near Pavilions and whose company owns the Roseville center where Fresh Market opened its first Sacramento-area location last October.

"As exciting as a bookstore is (as a neighbor), people buy groceries more often than they buy books," he says.

He describes Fresh Market as an upscale operator that "compares very favorably" with Whole Foods, which has a store at Arden Way and Eastern Avenue that now attracts many people living in the wealthy enclaves around Pavilions.

"It's the same level of quality (as Whole Foods) but with a gourmet as opposed to organic orientation," he says, adding that the store in his Rocky Ridge Town Center in Roseville is wowing shoppers with its distinct European-style departments, beautiful décor and "theatrical" lighting.

Also boding well for Pavilions are upgrades recently made by Saca at the Orchard Office Park just to the west of the shopping center.

Saca bought the 65,000-square-foot office complex in 2011 for around $6.5 million and has since spent $2 million more connecting buildings with open glass lobbies, replacing the wood exterior with brick and installing new flooring, among many other upgrades.

"We've taken it from a Class C building to a Class A," says Saca, who also is a nearby resident.

Occupancy remains about 70 percent, roughly the same as when Saca made the purchase. But he's brought in a new group of companies paying well over $2 a square foot, up from $1.50 under the former owner.

Moreover, Saca reports growing interest in the space in what he calls "one of the best areas in Sacramento."

"Aside from downtown or midtown, there's nowhere else you can just walk out your door and go to four or five great restaurants," he says. Those options include Ruth's Chris and Piatti, in Pavilions, and Roxy and Bandera a short distance away.

Among those excited about the Orchard's progress is restaurateur Randy Paragary, who is putting his new Café Bernardo in the one-time David Berkley Fine Wines & Specialty Foods site on the west end of the Pavilions property, adjacent to a walkway that connects with the office complex.

"I'm already picturing those office workers coming over" for lunch when the 4,000-square-foot café opens in June, Paragary says. The Bernardo – Paragary's fifth in the region – will offer food all day long.

The new Bernardo site was one of the major vacancies at the center following the closure in 2011 of The Market at Pavilions, which briefly took over after the closure of David Berkley, a Pavilions fixture for two decades. Other losses were the Polo Ralph Lauren store in 2011 and, more recently, the Trumpette gift store and Bella Bru Cafe.

Together, those departures pushed Pavilions' vacancy rate as high as 20 percent at one point, says Rich, the Retail West broker. Now, though, with the recent lease deals and talks under way for all the remaining space, Rich predicts Pavilions will be 100 percent occupied by the end of summer.

Like Rich, Paragary uses the expression – "young it up" – to describe the changes he sees going on at Pavilions.

Contributing to the more youthful vibe: the arrival, also this summer, of Studio 55, a local chain that leases out upscale suites to people running their own salon and spa businesses. It's taking the former Ralph Lauren space at the back of Pavilions.

Its 30 or so operators, and their employees, are likely to be "young and hip," Paragary says. The same with many of their customers.

The bottom line in Paragary's view: A 29-year-old center that lost a little of its swagger during the recession years is poised to make a comeback.

"It wasn't tired," he says of Pavilions, "so much as not having any new blood."

A transfusion seems to be in the offing.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Bob Shallit



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