South LA Center Enjoys Happy Holiday Sales

LOS ANGELES-While owners of some Southland shopping centers are complaining about slow holiday sales, a new project in the city’s urban core is bustling with business and breaking even its own optimistic sales projections.

The development is Chesterfield Square, near the intersection of Slauson and Western avenues. It’s the first retail center to be opened in more than a decade in South-Central LA, a long-neglected part of the city where more than 85% of local residents are either African-American or Hispanic.

The 240,000-sf project is anchored by a Home Depot, which opened its doors in late July, and by a Food-for-Less supermarket, which opened in the fall. A Home Depot spokesperson says sales at the chain’s Chesterfield Square outlet are running more than 30% ahead of the company’s original projections, while Food-for-Less says its new store is off to a record start.

“We were sure Chesterfield Square would be a winner, but even I’m a little surprised at how well it has done,” Jerry Katell, whose Brentwood-based Katell Properties Inc. co-developed the project, tells GlobeSt.com. “The sales numbers our tenants are reporting have been phenomenal.”

Though Katell says he was sure the project would be a success when he and LA-based development partner Capital Vision Equities began planning it a few years ago, other observers weren’t quite as certain.

For some, mere mention of “South-Central” conjures up images of gangs, drug-dealers and the riots of 1965 and ’92. Most retail developers have steered clear of the area, which in turn has forced local residents to drive or take the bus to surrounding communities to find a decent selection of groceries, apparel or other necessities.

Katell, however, says the area’s tough reputation is blown out of proportion and that builders who overlook the neighborhood’s potential are making a big mistake. “There’s a half-million people who live within a three-mile radius of Chesterfield Square, and their average household income is close to $40,000 a year,” he says. “I know some developers who’ve moved forward with projects in other areas where the demographics aren’t as strong.”

To be sure, says Katell Properties VP Jim Smith, one reason why Chesterfield Square is doing so well is the fact that it has so little local competition. “But there are a lot of other factors that have gone into this development’s success,” says Smith, who has spent much of his time on the project since graduating from USC’s Lusk Center for Real Estate a few years ago.

For example, says Smith, local churches and other nonprofit groups were given an opportunity to become co-investors in Chesterfield Square—and some of them jumped at the chance. “The whole community has a stake in this project’s success, which has benefited everyone who’s involved with it,” Smith says. Some of the churches are even fielding job applications for the retailers in the development, which not only makes hiring easier but also helps to ensure that local residents get a fair shot at new job openings.

The early success of Chesterfield Square has encouraged other retailers who plan to open stores in the development soon, Smith adds. Those retailers include nationwide chains Radio Shack, Starbuck’s, Subway and International House of Pancakes. But equally important, Smith says, the development will also include smaller mom-and-pop chains that are extremely popular in South LA even though they aren’t well known in other areas.