LA MESA – Grossmont Center’s next era is officially underway after work on the first phase of its multiphase redevelopment began on Jan. 5, reimaging the 925,000-square-foot retail space as a modern community touchpoint.
Grossmont Center was purchased by Maryland-based public real estate investment trust Federal Realty Investment Trust in 2021. Since then, the team at Federal Realty has been working behind the scenes on design and planning, solidifying the overall vision for the center.
The renovation’s first phase, which is slated to cost $13 million to $15 million, will include façade upgrades, refreshed landscaping and enhanced common areas.
“This was a property we have long had our eye on as an opportunity to give it a new life,” Federal Realty Senior Vice President, Western Region President and COO Jeff Kreshek said.
“When the opportunity came up to invest in Grossmont Center, we jumped all over it.”
So far, Federal Realty has stated that it will be working with global architecture firm DLR Group on the project. Federal Realty is also collaborating with San Diego-based Baby Bird Communications to redesign the center’s logo.
“There’s such a long-term vision for this project, and what it can be,” Federal Realty VP of Regional Development Jon Stoeckly said. “We’re only taking a little bite off of it today. That’s what’s so exciting about this — there’s so much future opportunity here.”
Cementing a New Vision
The redevelopment’s first phase will focus on the shops that front Grossmont Center Drive from Target to Walmart, which Kreshek said will remain a one-story building.
The second phase of the project is budgeted for $6 million to $8 million and will focus on the mall’s theater space. While the space is currently occupied by Reading Cinemas, Federal Realty is planning on adding a new theater operator to be announced early this year.
The project’s third and fourth phases, which include everything from Macy’s to Walmart, are slated for a budget of about $30 million.
In total, Grossmont Center’s first few phases of redevelopment are budgeted for about $50 million, according to Kreshek.
While Federal Realty is not ready to discuss any new tenants entering the center, its leadership said that the types of companies joining Grossmont Center will be “all over the board.”
“[We’re] pulling all of those elements from all of our collective experiences on our roughly 27-million-square-foot portfolio and figuring out how to apply those lessons learned to something like this,” Kreshek said. “Lifestyle is something we’re very, very comfortable with.”
One tenant that won’t be staying for the center’s new era is Macy’s, a long-time anchor store.
“The role of traditional departments stores in a project has changed dramatically over time.
We think it’s an exciting opportunity for us to bring a new anchor to the project,” Kreshek said. “Macy’s lease was up, and we collectively made the decision that it was best not to continue. We do have something we’re working on for that space, but we’re not prepared to announce anything yet.
“That, to me, was the biggest opportunity, if you will, to make a statement about what Grossmont center wants to be for the next 20 years, as opposed to what it’s been,” he continued.
Kreshek said that more details on the future of the anchor space may be announced this summer.
While densification is not planned for the first phases of the project, Kreshek said it could be in the development’s future depending on whether the team deems it necessary.
In the initial phases, there are no plans to modify the 64-acre property for mixed-use development. However, Kreshek said that such uses, including housing, are being considered by ownership on a longer-term timeline.
Crafting a Community Hub
Three words to describe the new Grossmont Center according to Federal Realty’s leadership included: vibrancy, inspiration and community.
Providing a gathering space for the community of East County is a top priority of the project.
“I want them to feel at home,” Kreshek said. “There are two different lanes of shopping: functional and experiential. The functional is to be a big, enclosed mall where my goal is to get every dollar out of your pocket between the hours of 10 a.m. and 8 p.m.
“What I really want is for you to come there whenever you want and do what you want,” he continued. “If you want to sit in our open space, sit in our open space. If you want to buy nothing, that’s great. If you want to come there and shop — fantastic. If you want to see a movie — great. I want this to be what you want it to be, not what I intended it to be.”
Grossmont Center’s design will be “timeless” and engineered for longevity, Kreshek said.
Like many other retail centers today, Grossmont Center will be incorporating experiential elements to appeal to visitors.
“The mall is all about the function of shopping. We want to be more about the experience,” Kreshek said. “How you feel when you get there matters to us. There’s nothing better than when I sit at one of our centers and I hear somebody saying, ‘I just love this place.’”
Federal Realty Investment Trust
FOUNDED: 1962
CEO: Donald C. Wood
HEADQUARTERS: Rockville, Maryland
BUSINESS: Public Real Estate Investment Trust (REIT) focused on ownership, operation, development and redevelopment of high-quality retail and mixed-use properties.
EMPLOYEES: 310
REVENUE: According to the FRIT website, 58 consecutive years of increased dividends
WEBSITE: https://www.federalrealty.com/
CONTACT: (301) 998-8100
SOCIAL IMPACT: Federal Realty is a long-term owner of retail-based estate, whose primary business objective is to grow the value of that real estate over time. That guiding business objective led them to establish 5 key sustainability priorities that are critical to business success: advance decarbonization, strengthen resilience, connect communities, empower teams and govern responsibly.
Born and raised in San Diego, Madison takes great pride in local storytelling. Her coverage at the San Diego Business Journal includes tourism, hospitality, nonprofits, education and retail. An alumna of San Diego State University’s journalism program, she has written for publications including The San Diego Union-Tribune and The San Diego Sun. At the 2024 San Diego Press Club awards, Madison was recognized for her exemplary profile writing. She was also a speaker for the 2023 TEDx Conference at Bonita Vista High School. When she’s not working on her next story, Madison can be found performing music at a local restaurant or on one of San Diego’s many hiking trails.
