If you stand in Santa Monica's popular Third Street Promenade and look south across Broadway, you'll see an uninviting fort that stops foot traffic.

Actually, it's the entrance to the Santa Monica Place shopping mall or it was the entrance. Last week, it started coming down, and what will emerge will be an open-air extension of the popular and pedestrian-friendly promenade.

"Santa Monica Place is a big fortress and bottleneck in downtown Santa Monica, and we are getting rid of the bottleneck to create a smooth transition from the promenade to the mall," said Robert Aptaker, vice president of development at Macerich Co., which owns Santa Monica Place. "We wanted better connectivity and pedestrian orientation. We wanted to make the mall more open and connected to downtown."

If it's successful, the $265 million renovation will be a significant addition to, instead of a detraction from, one of the L.A. area's most popular shopping and entertainment destinations.

A demolition extravaganza took place last week, complete with fireworks and a performance by the UCLA Marching Band. The event was staged to celebrate the symbolic tear-down of the site's entrance sign. The new version of Santa Monica Place is scheduled to open in fall 2009.

At the same time, the makeover is aimed at having Santa Monica Place stand apart from competitors, such as the Grove, Westfield's Century City mall and Westside Pavilion. The new Santa Monica Place will emphasize its spectacular advantage: ocean views. It will have a rooftop dining deck and three levels of open-air shopping that will feature views of the water.

Macerich, which owns and operates 71 other malls across the United States including the Westside Pavilion and the Oaks in Thousand Oaks, wants the architectural design of the new Santa Monica Place to be a better fit with the beachy streetscape near the southeast end of the Third Street Promenade at Broadway, and the surrounding downtown Santa Monica area.

Venice-based architecture firm Jerde Partnership is behind the mall's new look, which will feature sleek glass towers and Spanish colonial nuances to reflect the city's style.

People walking into Santa Monica Place from the promenade will find an elliptical outdoor central plaza.

It's a good idea, said Michael Z. Davis, of the L.A. office of San Diego-based Pacific Southwest Realty Services, a company that provides commercial banking services in the real estate sector.

"If you look at the Grove and Americana at Brand, shopping centers have been trending towards outdoor lifestyle centers," Davis explained, citing two malls designed by Caruso Affiliated.

Davis, a Santa Monica resident, cited several problems with the old Santa Monica Place: "It simply did not have good retailers and it was dark and unorganized. I do not think people even knew what was in there."

Macy's will be remaining as the mall's anchor and will be open through construction. Macerich is in negotiations with future tenants.

Anne Singleton, Macerich's vice president of leasing for Santa Monica Place, said the company will complement the retail stores on the promenade instead of trying to compete with them.

Currently, many of the clothing stores on Third Street Promenade are youth-oriented Guess, Urban Outfitters, Abercrombie & Fitch, for example.

Macerich's retail strategy entails bringing in high-end fashion tenants and upscale restaurants to target the areas' demographic, with its median age of 39 and an average household income topping $100,000.

"We want to mix in stores not offered in the Santa Monica retail community," said Singleton. "We don't want to fill in the blanks with the usual suspects."

Nevertheless, while Macerich plans to bring in "greater retailers" given the nearby wealthy residents, the company also plans to include an array of midtier dining and shopping options that could have some appeal to the swarming crowds of day trippers who frequent the Santa Monica Pier and promenade.

Mall evolution

The mall was built in 1980 with a design by famed architect Frank Gehry. It has appeared in films such as "Fast Times at Ridgemont High," "Pretty in Pink" and "Terminator 2," but began to struggle when the promenade came to life in the mid-1990s as a destination site featuring restaurants, retailers and movies.

Macerich bought the property from Maryland-based Rouse Co. in 1999. The company unveiled plans for reconstruction in 2004, but immediately faced heated opposition over plans for two condo towers at the site. Santa Monica rejected the plan, and Macerich scaled back, eliminating the housing units. The mall was 550,000 square feet, but the new version will be smaller by about 10 percent.

As part of the new plan that did get approval, the company will make street improvements to Colorado Avenue, sidewalk improvements to Second and Fourth streets, and elevator and stair upgrades to two parking structures. Macerich also will pay $1.4 million to the city's redevelopment agency, which is overseeing the project. The money is for 63 city parking spaces that are being displaced by the dining terrace.

Macerich's Aptaker promises improved parking services for its guests such as valet service that can be notified early by beepers.

Third Street Promenade features retailers such as Sephora, Max Studio, Gap, Guess and upscale restaurants including Monsoon Cafe and Cafe Bellagio. Adding to the ambience are vendor carts, street performers and crowds of pedestrians from around the region and tourists from all over.

Aptaker is impressed with the promenade's success. "What the promenade has done is a terrific study of outdoor retail," he said.

"We get top retailers because we have anywhere from 40,000 to 50,000 visitors on a weekend," said Debbie Lee, director of marketing for Bayside District Corp., which manages the operations of the Third Street Promenade. "The changes that are happening with the actual structure will have a huge positive impact on Third Street Promenade, downtown Santa Monica and the rest of the city as a premiere shopping destination."

But as bad news keeps cropping up on the economic front, the new and improved Santa Monica Place project comes with challenges. The mall is being torn down as sales in the area are declining.

"We've been hearing that sales on the promenade have dipped due to the slowing economy," Lee said. "One of the challenges Santa Monica Place will face is balancing the type of retailer and attracting the right consumer."

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