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Amid Retail Apocalypse, New $200M Shopping Center Opens In Long Beach

Walking around the brand-new 2nd & PCH outdoor mall in Long Beach, one of the first things people notice is the number of communal gathering places spread out evenly in the shopping center. 

A young boy plays in front of an outdoor water fountain at the opening of CenterCal Properties' 2nd & PCH shopping center in Long Beach

One area has a group of lounge chairs on top of artificial grass. There are picnic tables and benches in another area, rows of plush rectangular couches and hanging chairs are laid out in front of some retail stores.  

As the number of shoppers preferring to stay at home and conduct their shopping needs online increases, retail center developers are getting more creative with how to attract consumers to their centers. 

"We built this as a consumer, how we would we like to experience it," CenterCal Properties President Jean Paul Wardy told Bisnow

A JV of CenterCal and Taki Sun Inc., the space held a grand opening Thursday of the $200M 2nd & PCH, an upscale outdoor shopping center at 2nd Street and Pacific Coast Highway in Long Beach.

A 55K SF Whole Foods Market anchors the 230K shopping center, which also includes a Nike store, a Shake Shack, an Anthropologie, a Lululemon Athletica and a Peloton.

The center, which will encompass about 50 tenants, is mostly leased, Wardy said. Workers could still be seen putting finishing touches on several retail stores at the center.

Hundreds of people attended the grand opening, including Long Beach Mayor Robert Garcia and other city officials. 

The opening of the center comes as brick-and-mortar retail nationwide continues to decline. The latest Coresight Research numbers released in September found that retailers nationwide have announced more than 8,200 store closures, against 3,400 store openings. In 2018, there were 5,844 store closures and 3,258 openings for the full year of 2018. Coresight estimates by year's end, the number of store closures could reach 12,000.

Long Beach Mayor Robert Garcia helps CenterCal Properties President Jean Paul Wardy (both center) cut the ceremonial ribbon during the grand opening of CenterCal Properties $100M retail shopping center in Long Beach.

To help stem the tide of the closures, retail developers are helping their retailers by adding more communal and gathering areas where people can congregate, host events, concerts, movie nights and more.

In Santa Ana, Centennial Real Estate is pouring $300M to transform the city's MainPlace Mall into a mixed-use urban village with a shopping component.  

Wardy said it is important to create a place that people want to come to.

"Nobody needs to go anywhere," Wardy said. "They can just go online to get what they want so [we created] a space that people want to come and spend time with their families and is convenient."

Wardy said online sales will continue to increase, but so will the number of people itching to go out and experience life.

"We're going to continue to see online sales grow but we're also going to see customers wanting to spend time in great places and experience great experiences," Wardy said. "Both of those things co-exist with each other."

CenterCal entered into a JV with Taki Sun to develop the 11-acre site. Taki Sun, owned by Raymond Lin, had owned the site for nearly two decades. The shopping center replaced the former SeaPort Marina Hotel, an aging hotel most famous here for hosting women's wrestling events and EDM parties.

People relax on lounge chairs at 2nd & PCH in Long Beach.

Taki Sun had tried to develop the site for about 10 years with various partners before partnering with CenterCal in 2016. The California State Teachers' Retirement System, or CalSTRS, is an investor in the project. 

Long Beach Deputy Director of Economic Development Sergio Ramirez said the 2nd & PCH project is an example of why brick-and-mortar retail is not dead.

The architecture and mix of retail and lifestyle brands complement each other.

"This is a great example, you know how people are saying that brick-and-mortar retail is dead. This is an example of why that is not true," Ramirez said. "I think it's a good retail development and retail that has a heavy emphasis on experience, food and provides a living room for the community."