Developer pours money into Fountains at Roseville
By Jon Ortiz
jortiz@sacbee.com
Published: Monday, May. 12, 2008 | Page 3D
Here's how tough building shopping centers has become: Peter Bollinger, the retail developer behind the new Fountains at Roseville, has written checks for nearly $2 million – and that's just for the store and office project's signature water features.
He's also poured money into bigger-than-life bronze sculptures, shipped in 40,000-pound palm trees and recently added plans for a miniature train ride. While most developers decide on building colors from swatches, Bollinger has ordered entire structures painted and repainted just to see what they look like in real life.
An explosion of retail development in the Sacramento region and competition from the Internet have pushed developers like Bollinger to make their properties more than just places to shop. And now, with the economy in the doldrums and consumers spending less, amenities have become key to luring picky retailers.
"This is all driven by more competition for tenants and customers," said Bollinger, who developed Loehmann's Plaza in Sacramento and Highland Crossing in Roseville. "We have to offer more than we did, than three or four years ago, without a doubt."
When Fountains opens at the end of June, it will debut in a regional retail landscape that has become much more crowded in the 12 years since Bollinger bought the 52-acre parcel at Galleria Boulevard and Roseville Parkway.
He originally planned to build a collection of big-box stores on the site until a competitor got the jump on him in 2001 with the nearby Creekside Town Center. The huge Galleria at Roseville mall, just across the street from Fountains, opened in 2000.
Around that time, open-air "lifestyle centers" that cluster offices, stores and restaurants in a village-like setting were surfacing as an alternative to enclosed malls and huge retail stores. Bollinger decided he would build the first one in the Sacramento region, traveling to about 40 projects from California to Florida to get ideas.
He started signing up Fountains tenants about five years ago. Meanwhile, new or revamped open-air malls in Folsom, Sacramento and Elk Grove revved up. Westfield decided to add 100 stores to the Galleria. It expects to finish the first half of the project this fall and the second half in late 2009.
The competition got particularly rough last year when Bollinger, 69, accused Westfield of spreading lies and distributing confidential information about Fountains.
He filed a $60 million lawsuit against the Australia-based mall operator last spring, alleging that the company had lured him into talks about a joint venture and then used the information it gleaned to torpedo his talks with prospective Fountains tenants. The lawsuit was dismissed in August.
Despite the dust-up with Westfield and a challenging economy for retail, the 320,000-square-foot Fountains will open with about 80 percent of its space leased, Bollinger said, and deals pending for "at least half of the rest."
Bollinger's Fountains strategy runs along two tracks, said Boyd Cahill, a retail broker with TRI Commercial in Roseville.
"It's a great, great location and a different kind of product for this region," Cahill said. "And that brings in different, exciting tenants."
The pitch worked on Seattle-based Sur La Table. The upscale kitchen accessories chain decided to open its first Sacramento-area store at Fountains because the project isn't "cookie cutter," said Chief Executive Jack Sway. "It's also in a fairly affluent, up-and-coming area."
A steady two-year decline in housing values in South Placer County has hammered some retailers and restaurants there, particularly in Rocklin. Still, Roseville last year ranked 11th statewide with $3.6 billion in retail receipts, according to the California Retail Survey, an annual publication that tracks sales figures in the state. Roseville's average retail sales per household was $84,406, compared with $31,363 per household in California.
Perhaps nothing better illustrates Bollinger's aim to making Fountains unique than it's signature water feature, "The Main Show" fountain on the project's Main Street.
The 40-foot-wide fountain will shoot water 30 feet high from 93 electronic fountain heads. With music pulsing, about 180 multicolored lights will shine on the shooting water, while another 160 lights will illuminate fog generated by a fogging machine. Computers control everything.
"Building this is the pinnacle of our career, probably double our biggest project ever," said Mark Hansen, whose Rancho Cordova-based Nimbus Pond Construction is constructing the fountain and six other waterworks on the site. "This is as complex as it gets."
And, because of lava rock permeating the site, digging holes for the fountains and their massive pumps has been an expensive, bone-jangling chore.
Hansen's crews have busted three tractors jackhammering through the concrete-like earth, adding time and expense to the Main Show project and others: a 40,000-gallon pond, an interactive play fountain for kids, several waterfalls and a street sign that creates the illusion that "Fountains" is floating on a sheet of water. Price tag: $1.7 million.
The volcanic rock barrier is so thick in some spots that crews have had to dig holes 120 feet deep to plant some of the 10 mature palm trees Bollinger is trucking in from San Diego.
"That kind of stuff makes some things take twice as long," Bollinger said, "and cost twice as much money."
Putting money into such amenities is an act of faith and a delicate balancing act. Some retailers see enhancements as a needless expense, since most leases include fees to maintain public areas and glitzy features.
"There's often a lack of understanding of the value of amenities," said Sacramento developer Mark Friedman. "The retailer's first thought is, 'You're increasing my costs.' "
But other merchants see things like complex fountains and public art as a way to generate more traffic and more sales.
"The enlightened ones understand that they'll do more business," Friedman said.
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