Redevelopment of Grossmont Center starts with $10M face-lift

The future of Grossmont Center is taking shaping as the mall’s owner embarks on a multiphased redevelopment plan designed to refashion the sprawling 64-year-old outdoor center into a central gathering hub for the La Mesa community.

Last week, Maryland-based Federal Realty Investment Trust started its initial phase of work, a $10 million makeover of exterior storefronts, entrance ways, landscaping and common areas on the northern side of the center, between Target and Walmart.

The face-lift marks the first major overhaul to the regional shopping center since Federal Realty purchased a controlling interest in the property from the Cushman family in August 2021, and is deliberately conservative in scope.

“We bought the asset a little over four years ago with the plan to do a redevelopment. It was always going to be phased. It was just a matter of what’s the right time to move forward,” Jeff Kreshek, a Federal Realty executive who oversees the company’s West Coast portfolio, told the Union-Tribune. “It was pretty apparent very quickly during our due diligence and acquisition that scraping the whole site, even though it was set up in a way that that could have been the outcome, really just didn’t make a lot of financial sense, or really didn’t need to be done.”

The idea, he said, is to make intentional renovations that turn the dated mall into a desirable destination where people come and stay for a while because they want to, as opposed to stopping by just to run an errand or two.

The shift starts with the facade and common area work, which is part of the company’s 2026 push to bring in a more enticing roster of tenants to occupy 150,000 square feet of storefronts — or roughly one-third of the center’s retail space, when excluding the big-box stores.

Opened in October 1961, Grossmont Center is home to a mix of fast-casual food and beverage options, local retailers and brand-name chains, although the list is in flux amid the transition. The outdoor mall, which takes up 64 acres of land, is currently anchored by Target, Walmart and Macy’s.

Many of the tenant leases, set to expire last year, have been extended for varying terms. Target and Walmart are, for instance, staying put for several years, Kreshek said. The leases for Barnes & Noble, BJ’s Restaurant, Panera Bread and Case De Pico were also extended. Macy’s, however, is moving out, which frees up the space for a new use that the owner is not ready to discuss.

In addition to introducing a new look, the remodeling work should create a different vibe.

“We’re also doing a wholesale gut and reimagining of the common area plaza,” Jon Stoeckly, vice president of regional development at Federal Realty, said.

The company is installing synthetic turf that will travel the length of the interior spine of the property, adding an elevated platform for performances near Target, and creating outdoor, living-room-style seating on the periphery of the green space.

The first phase of work will be closely followed by a second phase focused on the theater space, currently occupied by Reading Cinemas. The owner is bringing in a new theater operator to be announced in the spring or summer.

The third phase involves everything on the south side of the property, including the Macy’s store, and will involve new retail-focused construction, Kreshek said, without elaborating on the details. Federal Realty will likely announce additional details in the summer or fall, he said.

But what’s clear is that any new development, at least for the time being, will not include residential units.

“(Housing) doesn’t integrate into that part of the project in a way that makes sense,” Kreshek said. The economic realities of development and the cost of construction also factored into the question, he added.

“At least right now, we’re not thinking of phase three as a mixed-use project. But that doesn’t mean there couldn’t be, and that we’re not thinking about, mixed-use for some place on the site,” Kreshek said.

Federal Realty’s approach differs notably from how other mall operators across the country are rethinking their properties, said real estate analyst Gary London, a principal of firm London Moeder Advisors who has consulted on local mall redevelopment projects.

“It cuts against the trend,” he said. “Most of the redevelopment activities in regional shopping centers is about modernizing the centers, compressing the retail footprint and creating a mixed-use environment by introducing residential. Just simple renovation typically hasn’t moved the needle.”

London pointed to the total overall of Westfield UTC, the future residential units slated to replace JCPenny at Fashion Valley and redevelopment plans in the works for the Mission Valley East mall.

“The real question is, will their initial conservative strategy bring people to the center? And I’m a little agnostic that that’s the right approach,” London said.

Federal Realty expects to complete the first phase of work at Grossmont Center by October and have a new movie theater open before the end of the year, the company said.