More Revenue for Torrance : Macy’s Being Courted by Del Amo Mall Developer

Out of public view, a campaign is under way to lure a major new retailer and its potentially rich lode of sales taxes to the South Bay.

Still smarting over Redondo Beach’s successful courtship of stylish Nordstrom four years ago, Torrance is determined to enhance its standing as the home of Los Angeles County’s largest shopping mall by drawing still more upscale retailers.

The most sought-after new entry into the fiercely competitive retail marketplace is Macy’s, a premier department store chain in New York and Northern California, which is planning to expand into Southern California.

For Torrance, which relies on the sales tax to finance nearly one-third of its nearly $77 million annual budget, capturing Macy’s would be a coup, particularly after Redondo Beach attracted Nordstrom to the redone Galleria at South Bay.

“Most cities with a large shopping center and a reliance on sales tax would love to have Macy’s,” said Torrance Mayor Katy Geissert.

Geissert said the city has been kept informed of discussions between Torrance Co., developer of the huge Del Amo Fashion Center, and Macy’s, but has not taken an active role in the talks.

“It’s a private decision, but I’m sure the City Council would want to take a look at how” to lure Macy’s, Geissert said. “We have said we think it would be an asset.”

Guilford Glazer, chairman of Torrance Co., confirmed that discussions have been held with Macy’s about opening a store at the sprawling Del Amo mall, but “ab solutely no deal” has been made.

“They’re interested in the South Bay,” Glazer said. “We’d be happy to have them here. The city fathers have expressed a strong desire.”

But Glazer said the decision rests with Macy’s.

“Until they’re ready to get married, there is not too much we can do,” he said. “We’ve taken the girl out to dinner. We’ve sent her a diamond ring. We’ve sent her flowers. Now, it’s up to her.”

Macy’s spokesman Robert Metz in New York declined to confirm that discussions have been held with Glazer about locating a store at Del Amo, the largest mall in the county.

‘Exploring All Options’

“We’re looking at various opportunities in Southern California,” Metz said. “We’re exploring all the options.”

Macy’s recorded $1.4 billion in sales at its 25 Northern California stores in the fiscal year ending July 31, an average of $56 million per store. At that rate, a newly opened store in Torrance could be expected to generate an additional $560,000 in sales tax receipts annually because cities get a penny of every taxable dollar spent.

Glazer, whose retail, commercial and residential developments have changed the face of Torrance, said preliminary drawings have been prepared for a new store on the north side of the mall with parking and access to a proposed bus terminal.

“All the key people in the city have expressed a strong willingness” to attract Macy’s, Glazer said.

Torrance City Manager LeRoy Jackson said the city has been informed of discussions between the shopping center and Macy’s but has not taken any direct action to recruit the retailer. “We can explore ways of encouraging and enticing,” Jackson said, “but we are not the mall or a private developer.”

Jackson said the city has been discussing the mall’s plans for a possible parking structure and an expanded park-and-ride facility, but has not offered any public assistance to lure Macy’s or any other retailer.

Need to Compete

Nevertheless, Torrance today is much more aware of the need to actively compete for new retail businesses and the sales taxes they bring. It was a lesson the city learned when Redondo Beach teamed up with Lawndale and used federal funds to help convert the aging South Bay Center into the splashy Galleria.

“We deeply regretted not getting Nordstrom and still do,” said Torrance City Atty. Stanley Remelmeyer.

Like most local officials, Remelmeyer realizes that “sales-tax revenues have become more and more significant” since the 1978 passage of Proposition 13 slashed property taxes.

Since 1978, Torrance has become far more dependent on sales-tax receipts than most California cities. The city will net an estimated $24.3 million from sales taxes in 1987-88, by far its largest revenue source. Nearly 32% of its $76.6 million operating budget will come from sales taxes.

Torrance’s powerhouse position in retail sales is reflected in figures that show the city ranked 18th in population in California last year but 10th in retail sales statewide, according to Market Statistics, a New York-based demographic research firm.

State Board of Equalization statistics show that Torrance businesses--auto dealers, department stores, apparel and home furnishing outlets, food, drug and liquor stores, gas stations and restaurants--reported $1.5 billion in taxable retail sales in 1986.

The Del Amo mall alone was responsible for $378.5 million in taxable sales, second only to the South Coast Plaza in Costa Mesa, which netted $488.9 million.

With the city receiving 1% of every taxable dollar, protecting and enhancing the sales-tax base has become a priority, as it has in other cities.

Redondo Beach has seen its retail sales jump from $291 million in 1984 to $414.3 million in 1986 after the remodeled Galleria and Nordstrom opened.

“It certainly has had a significant positive effect on things,” said City Manager Tim Casey. Sales taxes will provide an estimated $5.75 million or 19% of Redondo Beach’s revenues in the current fiscal year.

Casey noted that “from the very beginning there has been discussion of a fourth department store” at the Galleria, but no specific plans for developing the property have come to the city’s attention.

Although the fourth store site is available, Joan Kradin, a spokeswoman for Forest City Development Co., developers of the Galleria, said, “At this point there are no negotiations with Macy’s or any other department store.”