Residents express concern over what will replace longtime businesses leaving Cross Creek Plaza.
By Olivia Damavandi / Staff Writer
A recent exodus of local businesses from the Cross Creek Plaza has again left many residents concerned that many of the older, smaller, individually owned business are being pushed out of central Malibu. The Mexican restaurant Casa Escobar recently shuttered its doors. Malibu Pet Headquarters, the Salon at Malibu Creek and Pritchett-Rapf realty have all announced their departures. Ben & Jerry’s ice cream shop never reopened after the building fire a couple of years ago, and the Malibu Ballet Studio and the Malibu Beach Club closed a year ago. Some of the tenants who are leaving said that though business was good, it was not enough to meet the increase in the common area maintenance costs that came about when the shopping center was sold.
As is typical in most commercial leases, tenants are on triple net leases, which means when the center is sold the county reappraises it at the new sale price. That additional cost from the higher property taxes plus any maintenance costs are passed through to the tenants. The increase in costs came through as a byproduct of the plaza’s sale when former owner Steve Soberoff sold it to Retail Holdings Group, of which Pouya Abdi and Michael Shabani are the principals, for a reported $60 million.
Reliable sources have indicated that the total additional cost of taxes and maintenance was in the area of $3.50 per square foot per month, which for some of the tenants, who were on older leases, is almost as much as they were paying in rent.
In a telephone interview last week, Paul Dalton, general manager of Pet Headquarters for 16 years, said the store’s closing is, in part, because of the current condition of the economy, but also because of the increase in property taxes and maintenance fees.
Also, Dalton said, “I know they have a different plan for this shopping center. That’s part of why tenants are leaving.”
Dalton said he doesn’t know what business will replace Pet Headquarters.
Several calls to Retail Holdings Group have not been returned.
“A lot of people are asking why the owners want to bring in more corporate stores,” Dalton said. “[Malibu residents feel there are] too many clothing stores. They need more community stores, like the ones that have been here for a while and service the community with things they [residents] can actually use.
“A lot of my customers have expressed frustration and disappointment at the way things are going in Malibu [in terms of local businesses closing],” Dalton continued.
Dalton is opening his own pet store, Pacific Pets, Jan. 17 in Malibu Colony Plaza. The store will not sell dogs.
Kathy Harvey, co-owner of Casa Escobar, had no comments to make about the restaurant’s departure from the Cross Creek Plaza, but confirmed the restaurant will be relocating and thanked the Malibu community for their support.
Salon at Malibu Creek confirmed its departure from the Cross Creek Plaza in a telephone call with The Malibu Times two weeks ago. A woman by the name of Pamela said the salon is relocating to Point Dume “pretty soon.” She did not state an exact date or reason for the move.
Apparel and shoe store Malibu Beach Club relocated to Calabasas last year because of the increase in fees, said owner Jesta Erichsen Friday in a telephone interview.
Erichsen, a 31-year Malibu resident, has operated apparel stores in the city since 1988, including past stores Malibu Laundry and Ken Dome.
Erichsen said the reason she had relocated Malibu Beach Club from Cross Creek Plaza was “definitely because of rent increase” and because the 3,000 square foot ballet studio, from whom Erichsen subleased the 2,000 square foot space for her store, decided to leave.
Erichsen said she met with Shabani last year.
“I made it clear I wanted to stay in Malibu,” she said. “But the square foot price was just outrageous, I couldn’t do it. We had good business, but we just can’t afford to pay those kinds of prices.”
Erichsen, who still resides in Malibu, said Malibu customers who currently shop at Malibu Beach Club in Calabasas say they have to travel long distances to purchase daily merchandise.
“The quaintness of Malibu has gone by the wayside,” Erichsen said.