A rendering of the SouthBay Pavilion at Carson, California.

The city of Carson is on the brink of change. The community of 90,000 residents has long been plagued by transient retailers and lack of economic development funds. But all that is about to change. “Carson is really at the tipping point,” says Joseph Fahey, director of real estate for Shamrock Capital Advisors, manager of the Genesis LA Real Estate Fund. “There is so much momentum in the city right now.”

The NFL is looking at the city as a potential location for a new franchise, Anschutz Entertainment Group and Cal State Dominguez Hills just completed the $130 million Home Depot Training Center and renovations are in the works on the 1 million-square-foot SouthBay Pavilion shopping center.

Western Real Estate Business recently met with Ronald Winkler, general manager of economic development for the city of Carson; Fahey; Mark McGaughey, first vice president of CB Richard Ellis; and Sharron King, general manager of the SouthBay Pavilion at Carson, to discuss the city’s progress and plans for the future.

The city of Carson is a prime real estate area. The community is located 16 miles south of Los Angeles, in the South Bay region. Carson is bordered by Long Beach to the east, Torrance to the west, and the Los Angeles harbor to the south. Every day thousands of cars travel on the San Diego (405), Long Beach (710), Harbor (110) and Artesia (91) freeways, which run through and around Carson. The city is also supported by the Union Pacific Railroad and the ports of Los Angeles and Long Beach. “We are well served in terms of access by all these systems,” says Winkler. “When you look at the NFL opportunity, you might wonder why they are thinking about this location. But where else can you penetrate both the North Beach and Orange County marketplace?” Carson’s location and easy access by several modes of transportation make the city not only accessible, but convenient to many in the South Bay area.

While the location is desirable, it is not the only thing that has caught the attention of developers looking at Carson. The city has very interesting demographics. Carson is composed of a range of ethnic groups: 12 percent White, 25 percent African-American, 35 percent Hispanic and 25 percent Asian/Pacific Islander. With the variety of ethnicities come different retail wants and needs. This offers developers endless opportunities, but at the same time presents quite a problem. “The demographics make it complicated,” says Fahey. “It is not a one-ethnic market. There is a whole diverse community we are trying to serve and that is challenging.”

SouthBay Pavilion’s new center court.

With no clear majority to market to, developers must attempt to broaden the range of products and services offered in their projects. This is not always easy and has resulted in several failed developments, one reason Carson has suffered economically in the past. But the reason that developers are attempting to appeal to the varied demographic is for a different reason: disposable income. The city of Carson has the highest median income ($52,000) in the area, beating out Compton, Gardena and Long Beach. And in some areas of Carson, such as in the 5-mile radius around the SouthBay Pavilion, the average income is more than $72,000 a year. “In Carson, people have owned their homes for 30 years, homes are paid for, the residents have jobs generating $75,000+ a year in annual income and their kids are grown,” says King. “What do they do with their money? They want to shop, go out to eat at a nice restaurant and have entertainment. And they want to go here in their community.”

Hopkins Real Estate Group, the Genesis LA Real Estate Fund and the Coreland Companies are now trying to target these groups with the renovation of the SouthBay Pavilion. The center, built in 1973, has long been a fixture to the 250,000 people that travel the 405 daily. But despite its high visibility at Avalon Boulevard and 405, the center has suffered for a number of years, with high tenant turnover and high vacancy rates. The center is currently anchored by a 205,000-square-foot JC Penney, a 205,000-square-foot IKEA and a 193,000-square-foot Sears. Despite having three large anchors, the mall has had difficulty attracting consumers. In order to remedy this, the companies plan to replace the south wing, between the current anchors JC Penney and IKEA, with an additional anchor and outdoor retail. The new retail will bridge the gap and ease the transition between the center’s successful IKEA store and the other anchors. They are also in negotiations with several big box retailers. “The powerful retailers, the Wal-Marts, Targets and Costcos want to be here,” says McGaughey. “That just underscores the demand and opportunity that exists.”

Hopkins Group, Genesis LA and Coreland Companies also plan to move the existing tenants to one end and all of the vacancies to another. The hope is to bring in a good mix of local and national retailers and also introduce new restaurants to the area. “One thing we lack is good quality restaurants,” says Winkler. “There is proof they are needed here, because people are traveling outside the community for that experience.” Some of the restaurants that are opening locations in Carson today are more upscale than in the past. The city is trying to attract mid-market players to the city, so that sales dollars do not slip to nearby communities.

The hope is that the SouthBay Pavilion will bring Carson residents what they currently drive elsewhere to get. “The general challenge SouthBay Pavilion has had is that we are missing the national retailers that help create the foot traffic we need,” says King. “We have a complement of local retailers, many of whom do very well here, but we need the brand name tenants.”

One reason these companies believe SouthBay Pavilion will be successful is because of the communication they have with the city of Carson government. The city sees its role as that of helping these developers however they can. The growth of Carson means increased tax revenues for the city, which will increase funds available for recreation, police and fire services.

“We have a city that is truly in partnership with the developer — a city that not only talks the redevelopment game, but actually has staff that works with us, ensuring the tenants can develop the prototypes they want, gets the stores open and the building permits in the time that they want,” says McGaughey. The city also offers good economic incentives for development, such as no utility taxes, local property taxes, parking taxes or gross receipts tax.

The city is also actively recruiting developers. The city has been in talks with officials from the NFL in hopes of bringing Los Angeles’ next team to Carson, and has recently focused its attention on bringing more auto dealerships to the area as well as helping improve current Chevrolet and Toyota franchises. The recently completed Home Depot Training Center sports complex will also be a big draw for Carson. The center features a 27,000-seat soccer stadium and a 13,000-seat tennis stadium and will be home to the national headquarters of the U.S. Soccer Federation and the Los Angeles Galaxy soccer team. In the off-season, it will be the training camp for the San Diego Chargers.

Everyone involved hopes that as Carson grows, it will continue to draw more attention and attract the type of retailers that its citizens need while luring some of those consumers who pass it by each day on the 405 Freeway. “Carson has a very mixed group of people that live and work together,” says McGaughey. “Carson is the kind of community our country is striving to be. If we can just educate retailers about the opportunities here, then we can take Carson to the next level of success.”

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