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New Wal-Marts expected to give a boost to La Mesa, El Cajon malls

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While upgrading existing regional malls with new big-box anchor tenants is at center stage, La Mesa and El Cajon have other plans up their sleeves. Construction is currently under way on a 160,000-square-foot Wal-Mart (NYSE: WMT) store in the parking lot of El Cajon's Westfield-owned Parkway Plaza. The store is expected to be completed this fall and will be the second two-story Wal-Mart in the county. In La Mesa's Grossmont Center, a new 143,564-square-foot Wal-Mart is scheduled to open May 19 and is located on the former Montgomery Ward site. It will be the first two-story Wal-Mart to open in San Diego County. When asked if Wal-Mart could end up competing with the center's existing tenants, Scott Turcotte, Westfield Shoppingtown Parkway general manager, said he wasn't concerned. "Westfield also owns a mall in Mission Valley where a Target was opened, and that increased traffic into the other stores there," Turcotte said. Other proposed plans at Parkway Plaza call for 10 more specialty shops, a new sit-down family restaurant, and a "family lounge" that will be placed in the food court area. The lounge will include restrooms, bottle warmers, microwave ovens, nursing and changing stations. Including the new Wal-Mart, Westfield said it will have invested about $26 million in the expansion that also involves about 22,000 square feet of in-line shop space. Parkway Plaza is a 1.32 million-square-foot center. Anchors include Mervyns, J.C. Penney (NYSE: JCP), Sears (NYSE: S) and Best Buy (NYSE: BBY), among others. There has also been retail activity in El Cajon outside of Parkway Plaza. Jim Griffin, El Cajon community development director, said his city is continuing to talk to Home Depot (NYSE: HD) for a possible 160,000-square-foot store that would be located along East Main Street, east of Pepper Drive. Griffin explained that Home Depot had tried to develop a store here before, but had to do more environmental work before it could be approved. Terry Saverson, president of the San Diego East County Chamber of Commerce, said several new restaurants have been added to Main Street. "The restaurants will lead the retail. As far as the retail itself is concerned, that's a little slower," he said. Griffin said he feels there hasn't been much retail built outside Parkway Plaza recently, because existing spaces have yet to be filled. "Right now retail is just not the thing ... My feeling is there are a lot of vacant buildings in smaller centers," Griffin said. Bill Thaxton, of Flocke & Avoyer Real Estate, said by any measure, the vacancy rate in both El Cajon and La Mesa is less than 5 percent. "Both markets are real tight. There's just not that much available," Thaxton said. "Periodically space does open up at Grossmont (Center)." Seven new stores have been added to the 100 stores, specialty shops and restaurants at Grossmont Center. "It will be interesting to see how Wal-Mart impacts those malls," Thaxton said. He said they could definitely have an impact on the clothing stores in the malls, and noted that this may be felt most acutely in the shoe department. Grossmont Center ownership maintains the original partnership formed in 1961 as Grossmont Shopping Center Co. headed by Denele Co. and Delen Management Co. Managed by CB Richard Ellis, Grossmont Center is a 939,000-square-foot, open-air regional shopping center anchored by Target (NYSE: TGT), Macy's and Sportmart. The center features the county's largest Barnes & Noble (NYSE: BKS) bookstore, Pacific Theatres Stadium 10-plex, and numerous major specialty stores and restaurants.

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