900,000-SF Retail Center Wins Approval

REDDING, CA-The first phase of a planned 900,000-sf retail center here by Levenson Development has won council approval. The project is slated for the intersection of Highway 5 and Oasis Road. Levenson executive vice president Mark Miller tells GlobeSt.com that Oasis Towne Center will feature restaurants, dining and entertainment venues and high-quality apparel not currently available in Redding. Cinemark recently committed to building a 16-screen theater at the development.

"There's a surprising amount of pent-up tenant demand; Redding is the center of retail for 50, 60, 70 miles around," Miller says. "We're looking at perhaps a lifestyle-type product on the southern portion of the site, if not the whole site."

As part of its winning bid for city approval, Levenson is fronting the $30-million cost to enhance the adjacent highway interchange and city roads leading to the development site. Miller says Levenson will recoup its investment over time by collecting a portion of future property and sales tax revenues and fees collected from this project as well as from other developers who want to build in the area.

The first phase of the project will include about 300,000 sf of retail space. A groundbreaking is scheduled for next spring. In addition to the theater, Miller says there will be one large department store anchor and possible one other larger anchor along with a mix of other retailers ranging from 10,000 sf to 30,000 sf. There also will be retail pads on the periphery of the project, fronting the surrounding streets.

"In addition to a large department store, we have had interest from Costco, Fred Meyer and Target," Miller says. "Our [Environmental Impact Review] was specific to Costco; the project is entitled for their specific use."

The new development's main competition will be Shasta Mall, a 535,000-sf development constructed in 1975. Miller says the pro forma calls for building out and leasing up the project over the course of the next three years.

"By late 2009 or early 2010, we expect the entire 900,000 sf to be built and leased," he says. "We are not looking to spin it once it's complete; we feel like it will be the dominant project in Redding for many, many years."

A recent economic impact study shows the project generating $4.5 million a year in sales tax revenue for the city. After covering the debt service on the infrastructure and all the city services that will be provided to the mall, the study shows an annual net benefit to the city's general fund of about $2 million.