The largest shopping center in Marin, this 741,000-square-foot mall has been looking long in tooth for years, and its antiquated design has paled in comparison to Novato’s Vintage Oaks as well as the Village at Corte Madera and even Town Center, also in Corte Madera. Ironically, Macerich also owns the Village (along with the California Public Employees Retirement System), one of the top 10 grossing shopping centers in the state. It also just finished a multimillion dollar renovation of the Village’s common areas.
More important, Northgate lags behind the other shopping centers in gross sales and has no real identity. The Village is the place to go clothes shopping, the Town Center has everything for the house and Vintage Oaks is about discounts. But Northgate is anchored by Macy’s, Sears, Mervyn’s and Cinemark Theatres, with no real hook. Moreover, Northgate is the only covered mall in Marin, a place where the mild climate rules and the natives crave the outdoors—even while shopping.
While the remodel will likely bring some new business to the 42-year-old mall, the proposed changes represent a loss for the city of San Rafael. For years, the city has been after Macerich to redevelop the mall and add housing to the underused property. The city looked at the mall, with its acres of parking, and envisioned a place where shoppers filled the spaces during the day and residents used them at night. Yet while Macerich officials always listened patiently to the city officials talking about built-in customers, the real estate investment trust is frankly more at home with sales per square foot than housing units per acre.
The remodel calls for redesigning the roof to bring more light to the mall, glass walls that can be moved back to open the center up and take advantage of nice weather. The design will borrow from the Napa Packing House (with warehouse wood doors) and the external canopies will be scrapped to give merchants more visibility. Polished concrete floors will give the interior a different feel, and the food court will be moved to an area near the theaters.
Locally owned stores in Northgate have already begun to grumble privately that the changes may spell the end for them as rents rise to compensate Macerich for capital improvements. And mall officials make no secret they feel the center needs a different mix of tenants to grow revenues.
Speaking of locals, Mill Valley landscape architects Royston Hanamoto Alley & Abey draws the assignment of making the exterior more appetizing around two restaurants. Macerich is relying on a Colorado architect for the interior changes.
The remodeling of Northgate isn’t the only retail change that has the city of San Rafael eyeing more sales tax revenue. Big-box retailer Target is planning to build a 137,000-square-foot store near the Home Depot on Shoreline Parkway in east San Rafael. The new store would be the only location between Novato and San Francisco, and it will test a locals’ theory. It’s believed by many Marin residents that those who reside in southern or central Marin will only go as far north to shop as San Rafael, with the exception being Costco. A new Target could effectively cannibalize the Novato Target’s shopping base.
Outside investment dollars flow to Marin
A trio of Marin businesses have attracted outside investors. Novato’s Winery Exchange picked up $5 million in equity financing from Los Angeles hedge fund D.E. Shaw. Also, mFoundry, a Sausalito company that provides mobile financial services, raised $15 million from Motorola, PayPal and NCR Corp. Nordic Windpower of San Rafael will be able to begin manufacturing operations, thanks to an investment by Goldman Sachs.
Winery Exchange, number 82 on Entrepreneur magazine’s list of the country’s 500 fastest-growing companies, specializes in developing private label wines, beers and spirits on an international platform. The company, founded in 1999, is also backed by Venrock Associates, Technology Partners, Charter Venture Capital and Camden Partners. The 70-employee company shipped two million cases of alcohol in 2006 in the United States as well as internationally.
mFoundry is a privately held company in the business of making mobile finance easier for banks, merchants and consumers via its proprietary technologies such as Spotlight Financial Platform. Among its clients is Citibank. The investments by Motorola, PayPal and NCR demonstrate mFoundry’s pull with different types of companies who service different audiences.
Nordic Windpower’s story is perhaps the most intriguing. The company, with offices in San Rafael, Quebec City and London, has been financially backed by $75 million in investments from the government of Sweden and the European Union in its quest to perfect an efficient wind turbine. Now the company is enjoying support from one of the world’s largest investment banks.
For Nordic Windpower, the cash from Goldman Sachs is more than just working capital. Goldman knows something about the wind business—and we’re talking about more than telling folks to buy low and sell high. Goldman has backed other companies in the past looking to harness wind power for profit. And Nordic could start production of its model, two-bladed turbine that’s lower in cost and uses the wind (rather than fights it) this year.
Looking for a deal
After six years and more than 100 public meetings, Los Angeles-based Oaktree Capital Management won approval for the redevelopment of Loch Lomond Marina in San Rafael.
And now it’s looking to sell the entitled project off.
The project includes 30 acres of land, 38 acres of marina and 64 acres of water. The entitlements call for 34 houses, 42 attached homes, and five flats over retail shops. A new 14,000-square-foot grocery store, as well as a restaurant, is also slated for the site.
Oaktree is asking $55 million.
