City of Paramount Approves $44.4 Million Redevelopment Plan
Colliers Team Assembles Public-Private Partnership to Spur Retail Within City
A $44.4 million city-backed and investor-supported plan – designed to transform downtown Paramount into a regional center of shopping, entertainment and dining – has been green-lighted by municipal leaders aiming to boost city coffers with local sales-tax revenues by attracting and keeping its largely Hispanic and millennial-aged residents within city limits when they shop, dine or want to be entertained, officials of Colliers International have announced.
In the wake of California’s elimination of all municipal redevelopment agencies in the state, and the subsequent loss of millions of dollars in redevelopment funds, cities have had to turn to public-private partnerships in order to stimulate, redevelop, and revitalize aging downtown cores and remove blight. Few, though, have been able to identify the right partners to fund much-needed renovations. As a result, many cities continue to stand by helplessly as sales are siphoned off by competitive retail centers outside their city limits.
Colliers Senior Vice President James Rodriquez from the brokerage firm’s downtown Los Angeles office, was familiar with Paramount and its aging downtown region after selling a pair of shopping centers there in 2013, Paramount Town Center West (PTCW) and Paramount Town Center East (PTCE).
“But instead of just seeing these centers as simple, one-off sales, I was intrigued with the idea of connecting the city’s entire retail element, including the stores and shops along the city’s main thoroughfare, Paramount Boulevard, into a cohesive, walkable, and contemporary shopping district,” Rodriguez said.
After finding that city leaders had similar thoughts about creating a new downtown targeting both the city’s millennial population and its older citizens, a staunch partnership was formed with the common goal of renovating two shopping centers and creating another new retail development, all with national brand anchor tenants.
“Of course, I also knew it was going to take a lot of money, time and the support of private investors to get it done,” Rodriguez added.
Explaining his reaction to the Colliers plan, City Manager John Moreno, said, “The city saw the plan that the Colliers team presented as very attractive and quite exciting, especially in the wake of the loss of redevelopment funds. We’ve had some success with public/private partnerships in the past, so were open to exploring this, and were pleased with the concept and details offered by Colliers. We definitely embraced their ideas.”
Added Rodriguez, “We wanted to create a gathering place that would serve the large millennial population in Paramount and keep them within the city limits where their disposable income and energy would generate sales tax revenues and excitement for the city. We didn’t forget the older residents of the city, either. They told us, in no uncertain terms, that along with new national brand anchor tenants and other upscale retailers, they also wanted a casual, dine-in restaurant, something that was lacking in the city. It took tenacity on our part, but we delivered.”
To meet this demand, Rodriquez and his team, who routinely deal with a variety of such restaurant chains, set out to locate one that would embrace the new retail plan for the city. Applebee’s, which earlier had looked at and rejected a separate site in Paramount because it lacked any nearby retail activity that would attract diners, took a second look at the plan Rodriquez was proposing and decided to sign on to a long-term lease. Rodriguez described the national chain’s lease commitment as a “home run” for the city and for the overall plan.
During this time, the City held a town hall meeting to inform residents and existing business owners of the plan and to listen to what they had to say about tenant mix, the proposed downtown, the re-construction of Paramount Boulevard, and other issues. Concurrently, Rodriquez was meeting with potential developers, retailers, and investors to gauge their interest and assist in assembling a team that would eventually prove to be the catalyst for the creation of a new downtown Paramount.
“We shared our vision with the city, property owners, developers and retailers, which ultimately inspired the formation of a partnership among multiple parties to invest in and create a new downtown,” said Rodriquez. “The city is investing millions of dollars, as are the partners we have introduced to the city to create something unique and special, and our team has been the driving force. To get the full impact of what has occurred here, you really have to see it to believe it. There is construction activity everywhere, tenants preparing to move-in, and a palpable sense of heightened anticipation in the area.”
Meantime, the Colliers team, formally known as Colliers Retail Foresight, has been busy finding tenants to fill the tenant mix residents and city leaders said they preferred, including a combination of retailers that would include new stores, restaurants, and entertainment venues capable of merchandising to the heavily millennial majority as well as to the city’s older residents. In order to achieve that, some compromises had to be made, but nothing that could throw the plan off track.
“It has all come together remarkably smoothly, and we have gotten a lot of feedback from residents and business people about how much they are looking forward to the renovations and redesign,” City Manager Moreno added.
The vision for downtown Paramount has been a work in progress. In 2012, Ross Dress for Less replaced Big Lots and signed a 10-year lease valued at $3.8 million to occupy the anchor spot at PTCE ($2,350,000 total investment). Other, smaller retailers in the center include Starbucks, Baskin-Robbins, Sprint and Wells Fargo. The Center was sold shortly after the Ross Dress for Less lease was signed to Cannon Commercial in 2013 a total investment of $13,260,000.00 total investment.
Northgate Gonzalez Markets, a dominant Southern California grocer focused on the Latino market, anchors PTCW and purchased the balance of that center in 2013. Northgate Gonzalez Markets renovated its store and is currently redesigning PTCW to create a gathering place and accommodate fast-casual and quick-service restaurants. PTCW tenants include Yogurtland, Game Stop, AT&T, Subway, Autozone and a variety of smaller retailers. Value of its total investment is $15,250,000.00 investment.
The currently-under-construction Clearwater Crossing will anchor the northern end of downtown Paramount with 10,700 square feet of restaurant space. Expected completion date is summer 2016. It will include such tenants as the new Applebee’s restaurant, The Habit, Chipotle, and Waba Grill. Total size of its investment is $7,350,000.
The Colliers team also convinced the giant shoe chain, WSS, which prefers store locations outside of traditional malls, to sign a $2.8 million lease for a free-standing building at 16209 Paramount Boulevard, adjacent to PCTW, becoming another Paramount Boulevard downtown anchor. Total investment of that transaction is $1,200,000.
Street improvements along Paramount Boulevard also are underway as part of the overall plan. The new street plan consists of creating narrower lanes to slow traffic, crosswalks, signals, enhanced medians, landscaping, new signage, and public parking improvements to help define the downtown shopping district. The city’s total investment in that project is $5,000,000.
Downtown Paramount involved the collaborative efforts of the following companies and individuals: Northgate Gonzalez Real Estate Investment Company, Arroyo Seco Development, Onyx Architects (designers of Clearwater Crossings), Studio 111 (street improvements and downtown design), Sam Glen and The City of Paramount.
“Like we said earlier, Paramount’s pioneering effort is a work in progress where progress can be seen every single day, added Colliers’ Rodriguez. “It’s a concept like no other we’ve ever seen and we are proud to have originated the concept. We hope, in light of the loss of state redevelopment funds affecting every city and county in the state, to bring the same type of concept to other cities who are struggling to figure out a way to replace those lost funds and still be able to renovate, redevelop and remain relevant to a new generation of consumers.”