Escalators help move shoppers through the 1.5 million-square-foot Westfield's Valley Fair mall in Santa Clara. Plans to build a similar size mall in Gilroy are in the early phases of development.

Westfield Group to build 1.5 million square foot mall near old
Wal-Mart site
As construction comes to an end at two major retail centers
along Pacheco Pass, a huge new retail mecca is in the early
planning stages in Gilroy. Members of the planning department have
been corresponding with representatives of Westfield Shopping
Centers to discuss preliminary plans for what potentially could
become a 1.5-million-square-foot shopping mall in Gilroy.
Westfield Group to build 1.5 million square foot mall near old Wal-Mart site

As construction comes to an end at two major retail centers along Pacheco Pass, a huge new retail mecca is in the early planning stages in Gilroy. Members of the planning department have been corresponding with representatives of Westfield Shopping Centers to discuss preliminary plans for what potentially could become a 1.5-million-square-foot shopping mall in Gilroy.

“Westfield has a significant presence in the state of California and in Northern California, as you know,” said Katy Dickey, the executive Vice President of Corporate Communication, when asked about a possible shopping center in Gilroy. “We view Gilroy’s strong and growing demographic in the market as a possibility for future investment.”

Westfield Corporation Inc., part of the Westfield Group’s global shopping center dynasty, signed a contract with Ulrich Wingens Trust for 119 acres between Gilman and Leavesley roads in Gilroy and plans to work with Glen Loma to develop the property, according to a letter from Westfield’s vice president of development Richard Dreher to William Faus, Gilroy’s planning division manager.

“We are still working to finalize our plans and are beginning to work on agreements with major tenants,” Dreher wrote in the letter to Faus. “It is our intent to build a regional shopping center at this location.”

In 2005, the Westfield Group reported a profit of $3.2 billion. The company made $929 million in property income in the United States. Its most recent financials are due to come out next month.

The local land that will be used for 750,000 square feet of retail space, includes the land on which the old Wal-Mart site sits. The company plans to demolish and redevelop the site so they will be visible from the freeway, according to sources familiar with the project.

While the company plans to develop only 750,000 square feet during the early phase of development, they will continue to phase in more retail space over five to eight years until they reach a capacity of 1.5 million square feet – the same size as Westfield Shoppingtown Valley Fair in Santa Clara.

The preliminary talks with Westfield come as the last restaurant – Arby’s in the Gilroy Crossings shopping center – is completed. The Pacheco Pass and Gilroy Crossings shopping centers contain roughly 1.2 million square feet of retail space.

Westfield has had preliminary discussions with some of their anchor tenants, but have not revealed with which retailers they have talked. Anchor tenants include large department stores, such as Macy’s and Nordstrom’s at its Valley Fair location. A current expansion project at a Southern California shopping center is adding Nordstom’s, Neiman Marcus and Target as new anchor tenants to a center that currently has a Sear’s and and a Macy’s.

In addition to providing space for department stores, Westfield caters to specialty stores, such as Victoria’s Secret, Apple and Claire’s Boutique. Many of the specialty stores that are found in local Westfield centers, such as Bath and Body Works, GAP and Perfumania currently have outlet shops at the Gilroy Premium Outlets, which is located near the proposed site for the shopping center.

The Westfield Group has developed and redeveloped retail spaces in the United States, the United Kingdom, Australia and New Zealand. The company owns six shopping centers in Northern California, including Valley Fair in Santa Clara and Oakridge in San Jose.

The shopping center developers are currently working on 10 projects in the United States including continued construction on three California shopping centers. Once they have completed projects, including redvelopments and expansions of already existing malls, the company has a leasing rate of 93.8 percent for their retail spaces in the United States, according to the company’s third quarter report from 2005.

Pinnacle City Editor Dennis Taylor contributed to this report.

NEXT WEEK: The effects such a huge retail center will have on Gilroy and surrounding cities.

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A staff member wrote, edited or posted this article, which may include information provided by one or more third parties.

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