Where retailers saw nothing, Arturo Sneider sees opportunity

LOS ANGLES March 18, 2007 (By Brent Hopkins, Daily News) — Next month, the developer plans to start construction on Paseo Sepulveda, a six-acre shopping center at the corner of Nordhoff Street and Sepulveda Boulevard. The center will bring a Walgreens, Panda Express and Cold Stone Creamery to a neighborhood often ignored by nationally known companies.

It has taken Sneider, a partner in West Hollywood-based Primestor Development Inc., 3 years to piece the site together. And analysts say the center is on the leading edge of a new trend in urban development.

For Sneider, that "new" trend is old news.

"We've been marketing and pitching the Hispanic urban market for years," he said, smiling. "When people finally realized that it exists, they said, hey, call those crazy guys at Primestor. Then, we really took off."

The company, started in 1991, now owns around 40 projects in the Los Angeles region, with 12 more in the works. Sneider's "crazy" ideas don't seem so unusual to folks like Los Angeles City Council President Alex Padilla, who represents North Hills and helped mold the final design to the community's wishes. Only a decade ago, Padilla said national retailers wouldn't touch the neighborhood, which was then known only for its dense population and high crime.

At the moment, he terms the area near Sepulveda and Nordhoff "no man's land," a moniker he hopes it will soon shed.

"It's symbolic of the turnaround for the whole community," Padilla said. "Now retailers' eyes are open to an untapped market where you have a lot of hardworking families. They don't make $100,000 a year, but they eat ice cream, too. They drink coffee, too, and they want to shop in their own community."

According to Primestor's figures, nearly 295,000 people live within a three-mile radius, with an average household income near $65,000.

While its lower income makes it a risk, Greg Ferrell co-owner of Conehead Investments, Cold Stone Creamery's area developer, said the project presents a new way to draw in new customers. Currently, the ice cream shop operates primarily in upscale areas such as Calabasas and Sherman Oaks.

"When we first started developing Cold Stone in California, we only attacked the big-name centers," Ferrell said. "Now, we're more interested in neighborhood centers, because that's your bread and butter."

Development experts foresee increased interest in projects like Primestor's in coming years, as suburban populations continue to grow. When stores break into the previously untapped areas, Michael Beyard, a senior resident fellow for the Urban Land Institute, said they generally find both an eager consumer base and a lack of serious competition.

"This is a trend in its earliest stages," Beyard said. "We're going to see truly dramatic growth by mass-market retailers in underserved neighborhoods."

Walgreens Inc. saw the opportunity to pop in ahead of its competitors CVS/pharmacy and Rite Aid Corp., both looking to expand their Los Angeles operations. When its real estate personnel heard of Primestor's plans, spokesman Michael Polzin said the drugstore quickly signed on.

"We looked at the surrounding area, and this one was the one that really jumped out," he said. "This is the place that we really want."