El Cajon Considers Buying Parkway Plaza for Redevelopment | San Diego News

El Cajon, California, is considering a significant step to revitalize Parkway Plaza, its largest shopping centre, potentially acquiring the 80-acre property to proactively address declining retail trends. The move comes as the city seeks to ensure the mall doesn’t become a “dead mall,” a term used to describe struggling or abandoned retail spaces.

A Shift in Ownership and a City’s Concern

Parkway Plaza, which opened in 1972, has recently experienced a change in ownership. Starwood Capital Group lost ownership in 2020 after defaulting on bonds, and the property was subsequently acquired by Pacific Retail Capital partners and Golden East Investors. This shift spurred city officials to consider more direct involvement in the mall’s future.

Did You Know? Parkway Plaza was the second indoor mall to open in San Diego County.

From Collaboration to Potential Acquisition

Initially, the city’s approach involved collaborating with the current owners and gathering community input to develop redevelopment concepts. In December, city staff began outreach to shoppers to gather ideas for the mall’s future. The city also offered to contribute financially to portions of the redevelopment process, such as environmental reviews.

However, City Manager Graham Mitchell explained that the city faced limitations without a direct ownership stake. “The city would like to see Parkway Plaza reimagined, but it’s hard for us to talk to developers when we have no ownership stake,” he said. The City Council directed staff to investigate the feasibility of acquiring the property.

Reimagining Parkway Plaza

The city envisions a potential transformation of Parkway Plaza into a mixed-use development, incorporating shopping, housing, social gathering spaces, and improved transit access. A market analysis conducted in 2024 by Hunden Partners estimated that such a redevelopment could increase the city’s annual revenues by at least $10 million.

Expert Insight: The city of El Cajon’s consideration of acquiring Parkway Plaza reflects a growing trend among municipalities to take a more active role in shaping the future of their commercial spaces, particularly in the face of evolving retail landscapes and economic uncertainties.

The city is exploring various funding options, including funding districts, and is also considering partnerships with other developers or continued collaboration with the current ownership. A more detailed plan and timeline are expected by April, according to a staff report.

While a formal appraisal hasn’t been conducted, a 2021 market appraisal estimated the shopping centre’s value at $150 million. Starwood Capital Group originally purchased Parkway Plaza in 2013 as part of a larger portfolio acquisition for $1.6 billion.

Frequently Asked Questions

What is the city’s primary concern regarding Parkway Plaza?

The city is concerned that shifts in shopping trends could lead to Parkway Plaza becoming a “dead mall” and wants to prevent it from falling into disrepair.

What type of redevelopment is the city considering for Parkway Plaza?

The city is considering redesigning Parkway Plaza into a mixed-use site that includes shopping, housing, social gathering spaces, and transit access.

What is the timeline for the city’s plan?

The city expects to have a more developed plan and timeline for the potential acquisition and redevelopment of Parkway Plaza by April.

As El Cajon explores its options, the future of Parkway Plaza remains uncertain. Will the city move forward with an acquisition, or will a collaborative solution with the current owners emerge?