Caruso Reveals Plans for Palisades Village

Movie Theater, Specialty Grocer Among Changes Coming to Pacific Palisades

Developer Rick Caruso unveiled plans and renderings for his 3.17-acre property in Pacific Palisades, officially dubbed Palisades Village, in an exclusive meeting with the Palisadian-Post at Caruso Affiliated’s headquarters at The Grove on Monday, Dec. 1.

Caruso’s highly anticipated project will include the rebirth of the historic Bay Theater, a specialty grocer, six residential apartments, a park on top of two levels of underground parking, a community room and the transformation of Swarthmore into a one-way street heading toward Monument among other changes, he told the Post in the meeting.

A Community-Driven Project

The plans unveiled Monday are a far cry from what Caruso had originally intended for the Palisades property.

In January the developer met with the Post on Swarthmore in an exclusive lengthy interview and said he was expecting to do little more than a minor facelift to the existing facades. But that all changed after he heard from the 500-plus residents who attended a town hall meeting he hosted at Palisades Charter High School in February

“We went to the first meeting with the clear intention of taking this project and renovating what was there and making it better,” Caruso said.

The number of requests from residents at that first community meeting made him rethink everything.

The strong desire for a neighborhood movie theater, grocery store, unique shops and restaurants, as well as green park space, were all common themes expressed by those at the meeting, he said.

“We huddled that night, and I said to my team ‘we have a very different project,’” Caruso told the Post. “I challenged the team and said ‘let’s see what we can do with this place.’”

The Caruso Affiliated team went back to the drawing board and studied the history of the Palisades in an effort to learn from its past to create a revitalized future. Rick Lemmo, senior VP of community relations for Caruso Affiliated met with a variety of local organizations to gauge the community’s desires. And Palisades Village project manager Michael Gazzano met personally with a number of individual residents to discuss their wants and concerns.

“In order to satisfy the wonderful requests from the community, we revised our plans and envisioned something that will be really amazing for the Palisades,” Caruso said.

Some Palisadians may not see it that way and have expressed fears that Caruso will transform the Palisades property into a large-scale mall similar to some of his other properties, such as The Grove or The Americana at Brand.

In response to a post on the Post’s Facebook page about Caruso Affiliated closing escrow on the Palisades Village property, Jason Handy wrote, “Here comes the Grove West. Oh joy.”

The renderings of Palisades Village, however, reveal buildings that are scaled to fit the community, with nothing exceeding the Pacific Palisades Commercial Village and Neighborhoods Specific Plan’s 30-foot height limit, except the new Bay Theater marquee.

Caruso shared his plans and renderings with the Palisades community at a meeting held on Thursday, Dec. 4 at Pali High

Building From the Ground Up

“In order to really do it right and to give the community what they asked for, instead of rehabbing the existing buildings, we have to invest the money and take everything down,” Caruso said. He explained that all of the existing structures will eventually be leveled and rebuilt from the ground up, in part to allow for adequate parking, which was also requested.

To design the all-new development, Caruso looked to a former Palisadian.

After interviewing “a ton” of architects, developer Rick Caruso tapped Appleton & Associates, Inc., which has offices in Santa Monica and Santa Barbara, to help design the Palisades Village property. The firm is one of three architects on the project in addition to Caruso Affiliated’s in-house team.

Founder Marc Appleton worked for Frank Gehry among others before opening his own firm in 1976.

Since then Appleton has earned a stellar reputation as the go-to guy for restoration work, including the much-lauded renovation of the storied San Ysidro Ranch cottages.

And importantly, “he knows the Palisades,” Caruso said.

Appleton is a former Palisadian who lived in the Alphabet Streets and has worked on projects in the Palisades, including the facelift of a 1928 home on Paseo Miramar that once belonged to Academy Award-winner Hilary Swank.

In addition to its restoration projects, Appleton’s firm has garnered special recognition for its work on smaller-scaled residential properties. Although it may seem odd to choose an architect known more for small-scale residences than for commercial shopping areas, this was actually a major part of the firm’s appeal, said Caruso, who added that the architect designed a home in Malibu for him.

The emphasis on residential is reflected in the Palisades Village property, which is swathed in a neutral palette. Unlike most shopping areas, the buildings are individual, resembling small residences.

“It’s like they’ve been there forever. They feel authentic and organic,” Caruso said.

Other Palisadians are also involved in the design of the property, including architect David Montalba.

Concrete Jungle Becomes a Park

One of the biggest changes to the property will center on parking. The current parking lot, called an eyesore by many residents, will be transformed into a park. “The Neighborhood Green” as it is being dubbed encompasses one-third of an acre and will be used to host community events.

A two-level fully-subterranean parking structure will be situated beneath the property from the Mobil Station to Benton’s to the spot where the alley meets Monument. Valet parking will also be available along the alley behind Pearl Dragon, Caruso explained.

Additional parking benefits will include diagonal parking spaces along Swarthmore, said Matt Middlebrook, Caruso Affiliated’s executive VP of development. This move doubles the amount of on-street parking.

Caruso said he believes the additional parking will actually lessen current impacts of traffic and parking on surrounding neighborhoods.

The Bay Theater Makes a Comeback

The property’s tallest architectural element will be the Bay Theater marquee, which will be constructed according to its original 1940s design as proposed by architect S. Charles Lee, project manager Gazzano said.

Ultimately, a different marquee design was chosen for the original Bay Theater, which opened in 1948 in the space currently occupied by Norris Hardware and Pharmaca.

Caruso said that the original marquee was much cooler than the more contemporary design that was later adopted for the movie theater, which shuttered in 1978.

“The theater will also be in a similar footprint as the one that was located on Sunset but will have luxury seating for smaller audiences,” Caruso said.

The new Bay Theater will have five screens with luxury seating for audiences of 40 to 50 per screen, he added.

The movie theater entryway will be located on Swarthmore in the space formerly occupied by Mort’s Deli and the Oak Room and will be a focal point of a walkway that traverses the Palisades Village property.

The actual screening rooms will be located behind the former Mort’s Deli where a parking lot is currently located. The parking lot will be replaced by the backside of the theater, which will follow an existing slope to maintain a low profile.

Dense landscaping will be added to shroud the rear of the theater so residents on Albright Street will see only greenery.

A Specialty Grocer on Sunset

An unscientific poll conducted in a 2013 issue of the Palisadian-Post showed that 74 percent of readers were in favor of a Trader Joe’s in the Palisades. Since then, Palisadians have expressed to Caruso their desire for a new grocery store in the Palisades Village development, and he’s promised to deliver one that is 11,000-12,000 square feet. That’s small in comparison to nearby Ralphs and Gelson’s, which are both more than twice that size.

Markets that have expressed interest in being in Palisades Village include Trader Joe’s, Whole Foods and Erewhon, Caruso said.

Which one is most likely to move in? The developer won’t say, but a look at Caruso Affiliated’s other properties may offer a clue. The Promenade at Westlake houses a Bristol Farms, but Caruso told the Post this grocer was not an option for the Palisades property. In Caruso Affiliated’s luxury apartment project at 8500 Burton Way in Beverly Hills there’s a Trader Joe’s.

Tenants of the Residential and Commercial Variety

Caruso’s plans will also include an element of mixed-use, where the ground floor is dedicated to commercial and the second floor to residential, he said.

A total of six apartment units will be located at the top of a structure being planned for the current site of the Mobil station at Sunset and Swarthmore, Caruso said, adding that he is anticipating escrow to close on that particular parcel in mid-2016.

As for incoming tenants, no announcements will be made until sometime in 2016.

However, Caruso said there will also be a lot of smaller restaurants and unique specialty shops to offer greater variety in the area.

As for retailers currently located at the site, ones being impacted by the clean-up will have their rents cut in half as the remediation process continues, Caruso said.

Business owners will also be given access to low-interest loans that they can use to return to the future development, he explained.

However, almost all of the leases will be up by 2016, according to documents reviewed by the Post. The only exceptions are City National Bank and Maison Giraud, but Caruso said he doesn’t expect those to hold up the project.

Caruso Affiliated did not release leasing rates for spaces in the new development. Caruso did tell the Post that the tenants in the new development will pay what is typically referred to as percentage rent. This means tenants pay rent plus a percentage of sales or profits.

No Time to Waste

After announcing on Nov. 25 that Caruso Affiliated closed escrow on the property, the developer isn’t hesitating to get the project underway.

Caruso said 24-hour security is already on the property, sidewalks are being cleaned and flowers are being added in addition to other improvements to help current tenants.

On Monday, Dec. 8, barricades will go up around the buildings northeast of the former Mort’s Deli so demolition of some buildings can begin as part of the environmental clean-up, he said.

The clean-up plan addresses soil, soil vapor and groundwater contaminated with tetrachloroethylene, or PCE. Previous investigations revealed a historic release of PCE, most likely attributable to a dry cleaning business that operated at 1045 Swarthmore Avenue from about 1968 to 2000.

Every structure on the north side of Swarthmore from the former Mort’s Deli to the former Prince’s Table at the corner on Monument will be demolished as part of the remediation, Middlebrook said.

The remediation process is expected to be completed in six to eight months after the buildings are demolished.

During this time, the entitlement process will also begin.

The path to entitlement will involve obtaining all the necessary building permits, doing an environmental impact report, creating plans, receiving variances/zone changes and other discretionary approvals from the City of Los Angeles and more.

The entitlement process is expected to take 12-18 months.

Once all permits have been obtained, construction on the new development can take place. Caruso expects to break ground in the second quarter of 2016. This is also when tenants are likely to be announced.

Palisades Village is expected to be complete and open to the public by the end of 2017 – just in time for the holidays, Caruso said.

Caruso’s Palisades acquisitions may not be complete. When asked if he has his eye on any other properties in the Palisades, he said he is interested in acquiring other properties even if they are on the other side of Sunset or not contiguous to his current development.

Frances Sharpe contributed  to this article.