MILPITAS — A big enclosed Asian-themed shopping center is planned for a portion of the prominent McCarthy Ranch Marketplace here, a project that would bring hundreds of small merchants to the retail complex and construct a new hotel in the South Bay city, developers said Friday.The $100 million project would create a 260,000-square-foot Asian retail center with potentially hundreds of small shops in the enclosed shopping complex, a 240-room hotel, and an underground parking garage for about 820 vehicles.”It would be the only project of its kind in the United States — a large enclosed Asian-themed mall,” said Jim Kessler, a development adviser for Canada-based Torgan Group, the owner of the McCarthy Ranch retail complex. “There are other Asian-oriented tenant projects, but not of this scope and concept, with small units, a lot of owners.”
Whereas most malls have a single corporate owner, with some exceptions for flagship stores, the new Milpitas mall will sell spaces for shops much the way residential developers sell condominiums. Some merchants will buy their own spaces, while others will lease them from realty investors.Scheduled to open in 2017, the center will be named Pacific Mall Silicon Valley. It is expected to have 200 to 300 stores offering everything from clothing and consumer electronics to health food and cosmetics. The multilevel facility also will have a food court.Retail units at the mall will range in size from 145 square feet to 2,800 square feet.”There will be no large stores in the mall,” Kessler said. “It is really geared toward entrepreneurs and small business people.”The mall is modeled on the Pacific Mall in Toronto, which Torgan Group developed. The backers hope it will become a major regional draw for the Bay Area and Northern California.”People are known to drive all the way from Buffalo to go to the mall in Toronto,” Kessler said. “That mall has become one of the top 10 tourist attractions in Canada.”Milpitas officials believe the new complex could be a game-changer for the city.
“This project is very important for Milpitas,” said Sheldon Ah Sing, the city’s senior planner. “It is in a gateway location for the city.”The Milpitas Planning Commission approved the project this week and the City Council will consider the matter within the next several weeks. If all goes well, the developers intend to begin construction in the spring of 2015, Kessler said.The first stage of construction will bulldoze much of the southern section of the McCarthy Ranch retail center. Among the buildings that will be leveled are those once occupied by now-defunct retailers Borders books, Sportmart and Western Warehouse. The developers also intend to tear down an existing Best Buy store. Best Buy will likely relocate to a smaller space at McCarthy Ranch as part of an overall corporate strategy to shrink its retail footprint nationwide.The new mall hopes to tap into the growing Asian population in the Bay Area.”Asians have become the dominant demographic in that part of the Bay Area, and in Asian communities, culturally, Asian retailers want to own their real estate,” said Tom Nelson, a vice president with Colliers International, a commercial realty firm. “I’ve traveled in Asia, and this is how retail is done there.”Like its sister mall in Toronto, the Milpitas mall will include a large cultural center that will feature Asian-themed events on a regular basis.”You could have stage shows and other attractions at the cultural center,” Kessler said. “The presentations could have themes related to China, Taiwan, Thailand, The Philippines, Singapore, India and Pakistan.” Michael Messinger, a principal owner with San Jose-based Meacham Oppenheimer, a commercial realty firm that specializes in retail projects, says the new mall will face a lot of competition for the growing number of Asian consumers in the region. “A lot of Asian centers are operating in the Bay Area,” he said. “There are only so many retail dollars that shoppers have to spend.”