Upscale Chandler plaza struggling for tenants - East Valley Tribune: Business

Upscale Chandler plaza struggling for tenants

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Posted: Saturday, July 11, 2009 9:47 pm | Updated: 1:05 am, Sat Oct 8, 2011.

Downtown Ocotillo is a daunting moniker for an architecturally stylish but mostly empty shopping center on the southwest corner of Dobson and Queen Creek roads in south Chandler.

Downtown Ocotillo is a daunting moniker for an architecturally stylish but mostly empty shopping center on the southwest corner of Dobson and Queen Creek roads in south Chandler.

A "downtown" tag summons up images of a community's central core, a place where people live, work and play.

And while the economic downturn dashed Downtown Ocotillo developers' plans for a rapid startup, the prime property, surrounded by high-tech businesses and high-income households, is still pegged to live up to those high expectations, said Spike Lawrence, co-founder of Lawrence & Geyser Development Co.

"October, 2008 - I can't think of a worse time to open an upper-end shopping center, but we did open, and we're well-positioned," Lawrence said. "We spent a lot of money on this property, and we have zero regrets. It's just going to take longer to fill up with quality tenants."

Lawrence wouldn't speculate on how much longer, but he said he is committed to the project and has enough financing to wait out the economy, however long it takes.

He is building an $800,000 bridge that will connect Downtown Ocotillo's retail core with homes and businesses south of the project's man-made lake, keeping the landscaping lush and holding out for "lifestyle retail and restaurant" tenants rather than downscaling the project's upscale image to suit economic conditions.

"We are clearly not retreating," Lawrence said.

And there are a few businesses up and running. You can find them by the scattered clusters of cars in the mostly barren parking lot.

Paulette Gaffney, who lives in the bustling Biltmore area of Phoenix - a good 30-minute drive away - parked practically at the front door of the Leidan Mitchell Salon & Spa.

She followed her favorite hair stylist to the south Chandler shop and said it's worth the trip for a good haircut - even if she can't accomplish other shopping errands while at the retail center.

In fact, Leidan Mitchell is doing better than expected at Downtown Ocotillo despite the lack of walk-by business, said salon owner Jacki Tatum.

"We expected to take a year to grow, and we're right on schedule," she said.

The salon attracts top technicians who bring their own customers, Tatum said, and she's picked up lots of new customers by promoting the business in the Sun Lakes and Ocotillo areas surrounding her shop.

That's because the salon is a destination retailer, that is, a business that will draw customers to a specific shopping center rather than another one across the street or down the road.

So is Fresh & Easy, a Downtown Ocotillo version of the British-based specialty supermarket chain that touts low prices and fresh produce.

Dan Ross drives by packed shopping centers anchored by national supermarket brands and filled with lots of other businesses from dry cleaners to drug stores so he can grocery shop at Fresh & Easy.

Ross said it's worth bypassing the closer-to-home, one-stop shopping centers because Fresh & Easy carries so many of the organic foods he likes.

Restaurants also are destination draws. Three eateries are open at Downtown Ocotillo and fill up nearby parking spots at mealtimes.

Lori Becker of Sun Lakes and her husband come to Downtown Ocotillo often to dine.

"We love Sauce and Egg & I," Becker said. "We are here at least once a week."

Sauce is "performing OK and has been improving as the center matures," said Debbie Porter, vice president of marketing for Scottsdale-based Fox Restaurant Concepts.

A boutique clothing store at the center appears to be much less busy, but the owner did not respond to a query about business. An upscale home furnishings store plans to open in September, according to a sign in the window.

And, slower than hoped for maybe, but steadily, other retailers are coming to the center.

Lawrence has a couple of high-end eateries nearly ready to move into Downtown Ocotillo in the fall, he said.

An 11,000-square-foot Sapporo restaurant is still cooking up plans for its Chandler debut, he said.

And a new concept from Scottsdale restaurateurs - Lawrence would not say which ones - is in the works. A boutique fitness center and dance studio also is expecting to open in fall, Lawrence said.

And when those businesses are added to the current lineup, much of the first 65,000 square feet of shop space will be filled.

Then Lawrence will begin building the rest of the retail and office complex, adding another 40,000 to 60,000 square feet to the center.

Lawrence hopes the pieces of land he sold to other developers will spring to life when the economy does, too.

A hotel, like the retail, is stalled but still scheduled, said James Smith, Chandler economic development specialist.

An Aloft - a new, urban boutique hotel concept by Sheraton and W Hotels brandowner Starwood Hotels & Resorts - was pegged to break ground this summer. Plans are being redrawn, and a groundbreaking by year-end is unlikely, Smith said, but the trendy inn is still expected to be built when the economy recovers.

A residential developer plans to build about 200 pricey independent senior living condos adjacent to the shopping center. Building was expected to start last year, but ground remains unbroken on that project as well.

Downtown Ocotillo was designed to become "a center of commerce, a place to gather and do business, with a hotel, a grocery store, nicer restaurants, boutique stores," Smith said. "It was going forward aggressively, then the economy just stopped it."

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