Things just keep getting sexier along Stevens Creek Boulevard.
To the north, diamonds and pearls shimmer at the newly expanded Tiffany & Co. inside a Westfield Valley Fair mall that's gone gaga for glitz.
To the south, 10-year-old Santana Row is bursting with new retail, residential and office projects. There's a new lingerie line at the beefed-up H&M opening this week, a hipper-than-thou Italian coffee joint coming soon, and a high-end rental complex called Misora -- which, for those of you not fluent in Japanese, means "beautiful sky.''
With the dawning of Valley Fair's Gilded Age and Santana Row's "resort-style" rental apartments packed with status-hungry scenesters, the Stevens Creek corridor near Interstate 880 may well start calling itself the South Bay's Champs-Elysees. And its denizens and visitors are both fueling and feasting upon the region's ever brightening business climate.
"With the Silicon Valley economy coming around, especially in tech, you've now got 20-year-old entrepreneurs in flip-flops buying Cartier watches," said Valley Fair senior general manager Gavin Farnam, standing near the high-end jeweler, just one in a cavalcade of top-drawer stores settling into the mall's luxury lane. "And it's not just luxury items, but everything. We're at our highest sales level now in the history of the mall."
This bifurcated boom could cause whiplash for passing motorists. With dozens of projects under way at both
"This retail expansion is another indicator of the jobs and wage growth helping Silicon Valley lead the rest of the nation out of the recession," said Steve Levy with the Center for Continuing Study of the California Economy in Palo Alto. "And for companies like Apple (AAPL) and Google (GOOG), employees are seeing their stock worth more, too, so it's kind of a perfect storm, at least within the tech world. People in the valley have more to spend, and that's spilling over into retail."
Santana Row seems to be firing on all pistons as it celebrates its 10-year anniversary next month. Despite initial criticism that the upscale retail-residential complex would suck the life out of downtown San Jose, and naysayers who questioned whether the European-style village concept would ever work, the project now claims design awards and traffic numbers that would make
"It took people a while to sort of get this place," said Collette Navarrette, spokeswoman for the mall's publicly traded owner, Federal Realty Investment Trust. "It was a whole new concept when it opened in 2002 with just 35 tenants and no office space. Ten years later, we have 100 merchants, 403 rental homes and 219 condos, as well as 115,000 square feet of office space."
As Santana Row's residential occupancy rates push 100 percent, Silicon Valley's boom is reflected in real time inside the erstwhile Borders on the faux village's faux main street. This week, the popular Swedish clothing retailer H&M formally moves a few hundred feet down the Row into the closed book store, tripling in size to 27,000 square feet and adding new lingerie, maternity and children's sections.
Lifestyle is the Row's middle name. And with a boutique hotel, spas, wine bars and enough luxury retail to satisfy the most discerning shopaholic, its owners are planning yet another phase of the expansion: They're planning to build a 220,000-square-foot office tower, then fill it with employees who can tap into the smorgasbord that surrounds them. Federal Realty's West Coast president, Jeff Berkes, said the tower is part of the economic evolution under way in the region.
"San Francisco and Silicon Valley are leading the United States through its economic recovery," Berkes said. "We started to see that first in 2009 in the performance of the Hotel Valencia and our restaurants, followed by the occupancy levels and rents we've been able to get for our apartments. Then we saw it in retail. And these are all signs of the confidence people have in the local economy."
While it pretties itself up with new paint, a beefed-up valet station, and even plusher seating in its common areas, Valley Fair is welcoming a roster of luxury stores to a mall that has seen double-digit sales growth every month this year. Along with Cartier, a new Burberry, TAG Heuer and Wolford are joining the family.
With business booming on both sides of the boulevard, the two malls say the synergy between them serves both well.
"Anytime you have retail nearby, it's competition," Farnam said. "But when you have that lifestyle component like you've got at Santana Row, with residential and offices, that brings more people to the area and helps all of us."
Contact Patrick May at 408-920-5689. Follow him at Twitter.com/patmaymerc.
A Tale of Two Malls
Westfield Valley Fair
Age: Built in 1956
Number of merchants: More than 200 shops and restaurants
Annual visitors: More than 16 million
Total square footage: 1.5 million square feet
Noteworthy: The mall this year has about 50 stores either under construction or newly opened. Eleven retailers are relocating within the mall and the luxury collection is expanding, starting with Burberry, Wolford, and TAG Heuer.
Age: Built in 2002
Number of merchants: 100 shops and restaurants
Annual visitors: 11 million
Total square footage: 625,000 square feet of retail, restaurant and office space
Noteworthy: In 10 years, the complex has evolved from 35 tenants and no office space to 100 merchants, 403 rental homes and 219 condominiums, as well as 115,000 square feet of office space. When all construction is complete, the complex will boast 834 homes. Owners are planning a new 220,000-square-foot office building, with more than 600 parking spaces that can be used nights and weekends by mall visitors.
Source: Westfield Valley Fair, Santana Row, staff reporting