Sunday, October 16, 2011

(Kern County) Can the East Hills Mall be saved?

BY JOSE GASPAR Californian contributing columnist | Sunday, Oct 16 2011 11:38 AM

Last Updated Sunday, Oct 16 2011 11:40 AM

A recent Kern County Grand Jury report wondered about the economic solvency of a certain Kern County city. The same could be asked of the future of East Hills Mall located in northeast Bakersfield.

After its owner, BH Mall LLC of Los Angeles, filed for bankruptcy protection in 2009, the latest chapter in this saga is that it went to auction in September -- and not a single bid was offered.

The decline of East Hills Mall has progressively worsened. Only a few remaining independent merchants are left.

The mall was built in 1988, and it became home to anchors, Mervyn's, Gottschalk's and Harris, drawing in a steady number of customers. But when the economy soured, the major retailers pulled out; it's been a domino effect ever since. However, a few stories, such as Payless Shoes and Daniel's Jewelers, remain.

The aesthetics in and around the place certainly don't help in luring customers. The landscaping sorely needs work; weeds abound, garbage is scattered, and the parking lot needs repair. 

And what greets customers once they arrive?  Windows boarded up with plywood at the former Harris and Gottschalk's stores giving the appearance of an abandoned warehouse or worse.

"It looks condemned," said a clerk at one of the stores who gave his name only as Joseph. Renovation is desperately needed in its interior and exterior.

Inside the mall, it's a ghost town and you have to wonder how the remaining merchants survive.

I walked in recently and spoke to one shopkeeper. In the span of five hours, she had made one $6 sale she said. Living on this side of town, Nancy Giertz says she shops at East Hills about 3-4 times a year, mostly to get her nails done, go to Payless Shoes or take the kids to the dollar movie theatre.

Giertz wants to see brand name stores, such as Kohl's, come to East Hills.

"I feel our side of town is forgotten," said Giertz.  "Everything is going across town."

Being an east sider myself, I couldn't agree more so I decided to pick some brains and pose the question: Can East Hills Mall be saved?

"You're not going to get a Nordstrom's where you have a dollar movie theatre," said Richard Chapman, president of Kern Economic Development Corporation.

East Hills faces a myriad of challenges, some beyond its control. That includes the sagging economy that makes retailers hesitant to come in and set up business. As Chapman and others point out, East Hills has multiple owners and they must be willing to work cooperatively and develop a plan to rescue the troubled mall. 

"It's the property ownership that's going to be the issue," said Bob Bridges, a real estate professor at USC's Marshall School of Business. "You need to get everyone to sign off on working together in the mall's best interest."

So far, it's unclear whether the separate owners are even talking to each other.

The largest properties at East Hills -- the former Gottschalk's, Mervyn's and Harris stores -- have separate owners, including El Corte Ingles, a department store chain based in Madrid.  BH Mall LLC owns and runs the center portion where the current stores are located.

A few years ago, 25 students from USC conducted a real estate feasibility study of the mall as a class project under the guidance of professor Bridges. After analyzing its numerous challenges, including poor planning and access to the site, the students concluded the solution was to demolish the site and start anew.

But the new form would have to be radically different -- with a mixed use of an outdoor mall, office space, perhaps apartments and even medical providers.

"It is a viable site for retail once the market recovers," Bridges said.

Who knows how long that will take.

In the meantime, Nick Danesh of BH Mall LLC is just trying to keep the doors open any way he can.  Danesh feels the city can help out by waiving the $100 business license fee it charges to new owners who decide to open a business at East Hills and he is working on a proposal that he describes as the "East Hills Incubators," which he wants to present to the city soon.

But it's doubtful the city can do anything -- at least not right now -- to save East Hills.  It faces possible foreclosure.

"It's got to go through its evolution process," said city economic development director Donna Kunz.  Besides, the city has no funds to do anything since redevelopment agencies are locked up in a lawsuit with the state right now.

As for that Grand Jury report released earlier about a certain city facing insolvency? The recommendation: Disincorporation.

Perhaps East Hills may have to go through the equivalent measure. What would you suggest?

Jose Gaspar is a reporter for "KBAK/KBFX Eyewitness News" and a contributing columnist of The Californian. These are the opinions of Gaspar, not necessarily The Californian. Email him at

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