Palm Desert mall owner previews plan for homes, more dining, and a plaza

The owners of The Shops at Palm Desert mall, Pacific Retail Capital Partners, previewed plans Thursday to replace parking lots with homes, restaurants and a public plaza, and to rename the mall The Village at Palm Desert.

Company representatives outlined the concept to the Palm Desert City Council at a study session. Lemore Czeisler, the company’s vice president of development, said they hope to submit a specific plan as soon as January.

She said the site now has “acres and acres of black asphalt parking” that reaches about 152 degrees at midday. Of the underused land, she said, “It’s not good for the city, and it’s not good for us.”

She said the front of the property along Highway 111 would remain commercial, with mixed use near the mall and lower-density housing at the back. Buildings would generally top out at three stories, she said, and “no crazy skyscrapers are going to be coming to this.”

The plan also calls for a plaza “open to the entire community,” with shaded courtyards and possibly live music, along with more restaurants and wellness businesses.

Oscar Parra, the company’s chief financial officer, said the housing would for the most part be “probably market rate,” with details to come. Czeisler said the company plans to sell residential parcels to developers in 2028, starting with the area at the back of the site.

Development is complicated by the site’s four owners: Pacific Retail, Macy’s, JCPenney and the city, which owns the former Sears building. Another obstacle is a long-term lease on the former Sears auto center that runs through the year 2101. “We cannot wave a magic wand and just develop wherever we like,” Czeisler said.

Czeisler said new retail, cafes, fresh food, restaurants and entertainment would follow once residents move in.

“What we want to do is focus on more neighborhood-oriented retail because that is really what’s going to drive retail going forward,” she said. “Things that you can get on Amazon and e-commerce sites are not going to drive malls anymore.”

Parra added that health and wellness uses such as fitness, yoga and healthcare pop-ups tend to do well near on-site residents, and that the company sees tenant demand at their other mixed-use properties. The company also listed a bakery, paint studio, nail salon, stationery shop and co-op market among categories it is pursuing.

Councilmember Karina Moreno asked how the company would balance attracting new tenants with keeping longtime stores that have faced higher rents. Mollie Doyle, the mall’s general manager, said, “we don’t have a shopping center without tenants,” and that the goal is to help them succeed through higher sales, making higher rents more achievable.

Doyle said the mall has found 32 temporary tenants in about two years, using short-term licenses that let businesses test the location and incubate ideas. She also touted the Makers Market, circus, Yum Food Fest, and other events and local shopping opportunities.

Councilmember Jan Harnik said she could attest to the success of the events, she stopped by the mall during a monthly bingo event and found it “unbelievably just full of energy.” Doyle said the event regularly draws 250 people to the mall.

Even with the events, Harnik said, the mall must generate consistent revenue. “We depend on it in this town. That is our main source of revenue, of income, for supporting the entire city.”

Pacific Retail took over the mall in November 2023, after the previous owner, Westfield, defaulted on its loan and the property went into receivership. Parra said mixing housing into malls is “on the leading edge of the evolution of malls” but “not something new,” citing Westfield Garden State Plaza in New Jersey, which is adding 575 apartments to its site.

Doyle managed the mall from 1995 to 2000 and recalled weekends in those “glory days” when the mall fostered spontaneous connections between friends and neighbors. She said the current owner, “Believes that physical places still matter, and in a world where people have so many other options, they have so many choices. We need to create a place that brings people together.”