The Big Picture
Forest City's western division takes center stage with a creative approach to development.
Katie Foxworth

To Forest City's Brian Jones, developing a shopping center is like making a movie. First, it's about vision: you have to see something nobody else sees in a particular piece of property. Then you have to promote the property so that others will believe in your vision as well. Through this promotion, you must finance the project. Next, the center has to be “cast” with just the right mix of tenants who work well together. Once the center is open, the wheels of your publicity machine must be put in motion so that the center becomes successful. For what good is a shopping center if nobody comes to shop at it? What good is a movie if nobody comes to see it?

Above all Jones has learned in his more than 25 years in the business, developing a shopping center is a creative, collaborative art. And no project is alike. Each comes with, as Jones puts it, “a whole slew of different challenges.” Many of Forest City's latest and highest-profile projects, which have come under Jones' direction as president of the western division, demonstrate the uniqueness inherent to each development venture.

Victoria Gardens

Victoria Gardens is now open in Rancho Cucamonga, California. Photo courtesy of Simon Horton Forest City.

“Frankly, all of Southern California is talking about it,” Jones says. “It opened with a huge, huge bang.”

Victoria Gardens' sales are exceeding expectations at over $500 per square foot. Photo courtesy of Simon Horton Forest City

Victoria Gardens was developed by Jones' division, Forest City California, in partnership with Upland, California-based Lewis Retail Centers, a member of the Lewis Group of Companies. Forest City develops many of its projects as joint ventures.

“We're not frightened of doing joint ventures,” Jones says, noting that Forest City will even team up with competitors if the situation seems right. “The majority of the projects the company has done since we started in 1921 have been done with partners.”

Jones adds that the most important quality a potential joint venture partner can have is integrity. Equally important, he says — but not independent of integrity — is the potential partner's knowledge and expertise of the business or its willingness to understand the business.

“We know how to judge good partners, and we feel we are good partners as well,” he says.

Simi Valley Town Center

Simi Valley Town Center will open October 2005 in Ventura County, California.

The 800,000-square-foot center, nestled on 67.8 acres of hillside in the Simi Valley, will mark the first regional lifestyle center to be built in Ventura County in more than 25 years. It is also part of the largest retail-residential complex ever undertaken in Ventura County: 1.5 million square feet on 129 acres, with a price tag of $300 million.

Like every project developed by Forest City, Simi Valley has its own set of unique challenges. Aside from the more common difficulty of obtaining entitlements in that part of the greater Los Angeles area, another obstacle lies literally ahead: the land itself.

Simi Valley Town Center will mark Ventura County's first regional lifestyle development in 25 years.

Located on Highway 118 between First Street and Erringer Road, Simi Valley Town Center will be anchored by Macy's, Robinson's-May, Lowe's Home Improvement and another department store. The Mediterranean-designed center will include both a “town and country” and lifestyle section, whose 120 tenants include All Pro Sports, Anthropologie, Beach Bums, Bombay, Bombay Kids, Brighton Collectibles, California Pizza Kitchen, Cingular Wireless, Forever 21, Great Wraps, Lane Bryant, Limited Too, San's Pizzeria, Select Comfort, Urban Outfitters and Verizon Wireless.

In addition to retail, a 500-unit luxury apartment complex spanning 450,000 square feet is being developed directly behind the site by Dallas-based JPI, which will begin construction in August. “It's a very upscale housing community, which goes together with what we're doing with the center,” Jones says.

Simi Valley itself is an upscale market with enviable demographics. The primary trade area is expected to reach 275,000 by the middle of this year, with the average household income among that group approaching $105,000. And, with Simi Valley being the first regional lifestyle development in the county in 25 years, demand for retail is certainly present. Jones adds that close to one-fourth of the stores signed so far are new to Ventura County, and most had no prior presence in Simi Valley.

NorthField at Stapleton

NorthField at Stapleton is part of a 4,000-acre master-planned community.

“Stapleton itself is a huge mixed-use project,” Jones says. “It is unique in itself because we're creating a number of different communities within the acreage.”

Over the years, Forest City has developed some residential in the Denver area, but Stapleton is the first significant retail venture for Forest City in Denver. Unlike Victoria Gardens and Simi Valley Town Center, NorthField at Stapleton is not a joint venture.

NorthField at Stapleton is just 10 minutes from downtown Denver.

NorthField at Stapleton will be anchored by a 140,000-square-foot Foley's, a 180,000-square-foot Super Target, a 180,000-square-foot Bass Pro Shops Outdoor World (the first in Colorado) and an 18-screen Harkins Theatre (the first outside its home base of Arizona). Phase I, which will include Target and Bass Pro, will open late this year. Phase II construction, which will include Foley's and Harkins Theatre, is scheduled to begin this fall.

Just 10 minutes from downtown Denver, Stapleton is a rapidly growing area with good demographics. According to Jones, the center's immediate trade area is 567,000 with an average income of more than $56,000. In addition, 1.2 million people reside within 20 minutes of Stapleton. The master-planned community itself, which is a tapestry of homes, shops, offices, parks and schools in a walkable setting, will include 12,000 new residences and 10 million square feet of office space. As of late February, more than 1,350 residential units were already occupied.

Saddlerock Village

Saddlerock Village in Aurora, Colorado, is being co-developed with JCI Development.

Aurora is a great place to nurture that growth. The Denver suburb is a new, growing community boasting high household incomes (more than $80,000) and one of the best school districts in the greater metropolitan area.

The 750,000-square-foot Saddlerock Village is underway in Aurora, Colorado.

Saddlerock Village, which is being co-developed by JCI Development, will span 750,000 square feet upon final buildout, utilizing both sides of E-470 in southeast Aurora. Phase I, on the north side of E-470, will consist of more than 400,000 square feet and will include approximately 30 retailers. Phase II, on the south side, will consist of three major anchors and 20 additional stores that will open in spring 2006. A 176,000-square-foot Super Target and a 20,000-square-foot Office Max opened in early March, followed in April by a 35,000-square-foot Jo-Ann Fabrics & Crafts. This is the first Office Max in Aurora.

The Orchard at Westminster

The main street character of The Orchard at Westminster, opening October 2006 in Westminster, Colorado.

“We're developing Westminster, like Saddlerock Village, because of our city strategy: we go into a city and we stay in that city,” Jones says. “When we go into a city like Denver, we do more than one project there.” Westminster is a 33-square-mile community located in the northwestern Denver metropolitan area with a population of more than 106,000.

A rendering of The Orchard at Westminster in Westminster, Colorado.

Jones calls The Orchard at Westminster an “omnicenter,” a new buzzword in the industry that means the center offers everything in one place. “We're trying to put all the uses together in one harmonious plan in terms of lifestyle, fashion, big boxes and, very significantly, residential,” he says. “Everything integrates with one another; there's connectivity between all the uses.”

Westfield San Francisco Centre

San Francisco Centre is an urban redevelopment of Forest City and Westfield in downtown San Francisco.

“We started this project about 8 years ago,” Jones says. “Forest City initiated and obtained all of the entitlements and completely designed the 835 Market Street project.”

In 2002, when Westfield purchased San Francisco Centre, a very successful retail center immediately adjacent to 835 Market Street, it was mutually decided by the developers that the sum of combining the existing San Francisco Centre with the proposed property would be greater than the individual parts. Westfield is leasing and overseeing the construction of what Forest City had planned. The project will open in fall 2006.

San Francisco Centre will open in fall 2006.

“If you're dealing in urban areas like downtown San Francisco, there are a whole number of different issues one encounters,” Jones says. “When you're developing in the suburbs, you tend to be developing into growth.”

Instead, when you develop in large, downtown cities, the density increases. Unlike in suburban areas, there is high daytime traffic in urban areas, due to the presence of office space, tourism and centers of government. Often the development is replacing obsolete space, and additional factors — from parking ratios to retailers' store hours — must be taken into consideration when developing in an urban location. Forest City, which is so proficient in developing lifestyle centers in suburban areas, has mastered urban redevelopment as well, exemplified by its many urban projects throughout the country, such as the 42nd Street redevelopment in Manhattan and Atlantic Terminal in Brooklyn, New York.

Forest City Philosophy

Forest City California, a retail/commercial division of Cleveland-based Forest City Enterprises, Inc., established its first office in Los Angeles in 1987. Since that time, it has helped the company thrive. Most recently, the division helped take Forest City from a $5.7 billion company in early 2004 to a $7.3 billion company today. And, with such large-scale projects underway in California and Colorado, the division shows no signs of slowing down.

“We have great opportunities for the future,” Jones says. “We're one of the very few national development companies that made a conscious decision during the 1980s recession to continue to maintain a presence in all the markets in which we were operating. Because we did that, we became an accepted part of the California community.”

California remains one of the largest economies in the world — larger than most countries, in fact. “There's going to be continued growth in the western United States, and that will ensure, in my opinion, that not only will there be the need for new shopping center space but that obsolete space will need replacement,” Jones says.

Currently, Forest City California has between 3.5 and 5 million square feet of space in the pipeline, which will be developed over the next 5 years. The biggest challenge, Jones says, will be making sure the economics will support a retail-based project when the rapid population growth in California makes residential development perhaps the highest and best use for land in the state.

The Forest City approach to development involves three key initiatives. First, the company initiates a geographic strategy to examine where it feels the key markets are located. Second, it initiates a demographic strategy in which it looks at the population, household income, growth curve, etc., and then melds its business toward those demographics. Third, it enters those key market cities where the demographic profiles are in alignment with its geographic strategy and, once in a city, it uses the city as a base of operations from which to build its business, as the company has done in Denver. Forest City also   plans to look increasingly at mixed-use developments, where it can bring all of its skills as a developer to bear on a project.

“We are one of the foremost retail developers in the country, and we develop a substantial amount of office space,” Jones says. “In addition to that, we are a major developer of multifamily housing and residential communities. If you put all that together, that is where we believe we can add value — not just for ourselves but for the communities we're developing within.”

Mixing it up with mixed-use also makes the challenges varied and interesting. “I love the continual challenge of the creative part of this business,” he says. “A lot of people outside the business can't relate to the fact that developing a shopping center is incredibly creative. Every project is different.”