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Making Sure the Fiesta Goes On

The next few years will be a turning point for Fiesta Mall in Mesa, Ariz. Two decades ago, Fiesta Mall was the first suburban regional shopping center built in the growing southeast Phoenix market. The mall's owner, an affiliate of Boston-based United Asset Management Corp. (UAM), is positioning itself to continue the success it has enjoyed as the dominant player in the market.

Last fall, the UAM affiliate, L&B Fiesta Mall Inc., completed a $5.5 million renovation of the building, and a modest remerchandising program is under way. The changes were due, mall officials say, because the shopping center celebrated its 20th anniversary last year. But the moves come when the mall finds itself battling growing nearby competition from three established retail centers and a fourth now under development.

To keep customers coming back, the mall's owner wanted to create a fresh environment. Unlike other malls around the country that are removing roofs to create open-air centers, Fiesta Mall's size and structure failed to allow that opportunity. Thwarted, the mall owner decided to bring the outdoors inside.

"We're in a very competitive market in terms of retail," says Sheila Hunter, Fiesta Mall's property manager and marketing director. "So, we wanted to take advantage of the anniversary and make sure that everything we did really fit the Arizona desert. Prior to the renovation, you could have plunked this mall anywhere in the United States and it would have fit because it was so vanilla."

The 1.1 million sq. ft. mall, which generates sales of more than $430 per sq. ft., has gone from bland to a "Home in the Living Desert." Native plants and desert scenes have replaced the once-sterile atmosphere. Different textures, colors and lighting combine to give the courts adjacent to the four anchor stores their own desert daytime character.

Shoppers encounter an early desert morning in the Sears court, a desert afternoon in the Robinsons-May, Macy's and Center court, and a desert dusk in the Dillard's court. Among other design changes, the mall imported various sizes and shapes of rock pots, which were hand cut and carved by families living in a small Mexican village and brought in granite, new carpet, huge blocks of sandstone and wood floors.

"What we wanted to do is make Fiesta Mall more of a part of the community so people would feel the mall is theirs and that they could take authorship in the changes and say, 'Yeah, this is our shopping center, and we're proud of it,' " says Rod Johnson, architectural designer for Seattle-based Callison Architecture Inc., which worked on the renovation. "It's no longer just a place to go shopping. This reaches out."

This is the second renovation on the mall. L&B Fiesta Mall bought the shopping center in the early 1990s, just a few years after the first remodeling. According to John Gerdes, director of retail properties for Dallas-based L&B Group, little changed physically after the first rehab.

"If you have an older center, you want to upgrade to make it look architecturally like the latest centers that are being built today and maybe even try to take it a little bit to the edge," Gerdes says. "But, back when they did the renovation 10 years ago, everything looked the same. There wasn't a lot of distinction in our business. Malls were malls."

Closing in Ten years ago, Fiesta Mall stood as the lone regional mall in the Mesa market. When built, the mall's initial owners correctly anticipated suburban growth southeast of Phoenix. They constructed the mall at Southern Avenue and Alma School Road just north of U.S. 60, an east-west thoroughfare also known as Superstition Freeway that cuts through the heart of Mesa.

In addition to the four department stores, the two-story mall has more than 145 specialty stores and more than 25 restaurants and specialty food stores. Only one original department store, Sears, remains. Goldwaters became Robinsons-May, Diamonds became Dillard's and Broadway Southwest became Macy's.

Yet the mall is feeling the squeeze of new surrounding retail centers. In 1990, Phoenix-based Westcor built Superstition Springs center, a 1.2 million sq. ft. mall 10 miles to the east of Fiesta Mall with similar anchor tenants, including Dillard's.

In 1997, six miles to the west of Fiesta Mall, the Arlington, Va.-based Mills Corp. opened the Arizona Mills Mall, which features a 24-screen Harkins theater and outlet names like Off Saks Fifth Avenue and Burlington Coat Factory. Within the last year, a power center anchored by a 24-screen AMC Theater opened three miles to the east. About six miles to the south of Fiesta Mall, Westcor is developing a Nordstrom-anchored regional mall, which will be the second Nordstrom store in the Phoenix area.

"You have a mall that used to own the world, and now you have everybody taking a shot at it," says Darren Pitts, a senior associate in the Phoenix office of CB Richard Ellis. "Still, at the end of the day, Fiesta Mall is extremely well-located to serve the Mesa market for a lot of the population to the north and even to the east. It will still be a major player; it's not going away."

To reinforce its position, Fiesta Mall is counting on its remerchandising plan, though mall officials downplay the strategy's extent.

"I think we saw the renovation as a time to fortify," says Gerdes, an ex-cop who started his shopping center career as a security director. "But this is a market where if it's not broke, don't fix it. We're not going to bring in a lot of cutting-edge retail, but we're going to bring in the best possible merchandise mix for the Mesa-area customer."

Finding the mix Generally, that customer lives in an area known as the East Valley, which includes all or parts of Mesa, Tempe, Chandler and Gilbert, an up-and-coming enclave of young, affluent professionals and their families. The trade area's population numbers 1 million, and it is expected to grow nearly 17% by 2002. More than 18 million people, mostly middle-income shoppers with an average household income of more than $50,000, visit the mall annually.

"More than 70% of our shoppers have children at home; it's a very family-based, middle-income market, and we want to make sure that we're bringing in the shoppers by bringing in the stores they want to see," Hunter says.

"We also have a large senior base, not only tourists, but a lot of (seniors) who used to winter here - the snowbird market - live here year-round now. We need to make sure we're speaking to them, too.

"We wanted to make sure that the mall looked classic and fit the market and the surrounding area. We didn't want to appear like we brought in stores or prices unfamiliar to them, and I think we've achieved that."

Additions already opened or planning to open in Fiesta Mall include stores such as Juxtapose, Stone & Co., Wicks 'n' Sticks, Frozen Fusion, Limited Too, Kitchen Things, Babbage's, Bourbon Street Cafe and Voicestream Wireless. Stores such as Victoria's Secret and Helzberg Diamonds also are expandin g.

Mall officials recognize the challenges ahead. They're intent on strengthening the mall's restaurants, especially in the table-service sector, and this is the first time they've been able to focus on remedying a shortcoming in that area.

"This is probably our first opportunity in 10 years to make some changes in a couple of categories, because we just haven't had any space available," says Bob Switzer, Fiesta Mall's general manager. "We're going to have some space coming available over the next couple of years that will give us some opportunities to make a few positive changes."

Mall officials also are studying the possibility of adding theaters and other entertainment-themed venues. However, the mall's compact size and cross-like design make it tough to add on, and it's not structurally built to handle popping the top.

"It can be done, but it's going to take a great deal of cooperation between the anchors and ourselves to do it," Switzer says. "It's a challenge, but not impossible."

A rarity The recent construction work came in under budget, thanks to the way the renovation team undertook some of the changes. For example, instead of replacing the mall's railings, which needed to have narrower gaps due to a change in the building code a few years ago, workers added a twisted rebar-like element between the railing's bars.

"When we started the renovation, we knew we had to do something with the railing," Gerdes says. "But just by doing that, we changed the entire look, met the code and saved money. What a great deal."

Other changes included new carpet on the upper floor that features a Southwest design, the stacking of sandstone around columns and elevator bases, and different desert flowers such as "Reina de la Noche," "Arizona Fishhook Cactus" and the "Great Desert Poppy" adorn different parts of the exterior so that the mall's entrances have their own identity, rather than just being door No. 1 or No. 2, Johnson says.

Muted, natural shades replace white ceilings and walls. Elevator glass features silhouettes of the ocotillo, a thorny scarlet-flowered candlewood found in that region.

Not all of the changes reflected the desert, hardly the friendliest environment when it comes to comfort. Fiesta Mall also has introduced a "residential" feel by adding large, cushioned chairs for the aging baby boomers and senior citizens that have retired in the area.

To make all shoppers comfortable during the renovation, laborers performed much of the work between 9 p.m. and 9 a.m., and mall officials report that mall traffic was even up during the renovation, which started in April 1999.

Whether the new look and tenant changes keep the center at the top of the Mesa market remains to be seen, but Fiesta Mall already has succeeded in convincing others that a transformation has occurred.

"The ultimate compliment to me came from a guy in the business who told me that if we were going to build a new mall, this is what it would look like," Gerdes says. "You can't ask for anything else when it comes to a renovation."

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