Petaluma Outlets slow to recover

On a recent weekday, Ukiah resident Ashley Estrada stopped at a bench in the outdoor plaza of the Petaluma Village Premium Outlet Mall, several full shopping bags at her feet. She needed both hands to assemble the glittery princess crown and wand she had just purchased for her daughter, 4-year-old Lucy Estrada, hoping the toy would distract her for the remainder of the shopping trip.

The pair were one of more than a dozen families streaming through the outdoor corridors Monday afternoon, striking a normal-looking scene at the city’s only shopping mall following months of closure.

Estrada, who has three other children between the ages of 2 and 13, said she had been impatiently waiting for the retail center to reopen.

“Even though we’re all at home, I still have to shop for my kids. They don’t stop growing just because we’re in quarantine,” she joked.

Removed from the hustle and bustle of the downtown corridor along Petaluma Boulevard North, the outlet mall’s approximately 35 stores are once again open to in-person shopping after the June county health order sanctioned indoor retail along with mitigation measures such as masks and social distancing.

When the mall flung open its doors, Estrada didn’t hesitate to make the nearly 80-mile drive from her Mendocino County home, eager to snag discounted items for her four kids, and to get out of the house.

“I had been doing all of my shopping online, but it’s not the same as going into the store,” she said, as Lucy Estrada excitedly waved her plastic wand at passersby. “We’re also just tired of being cooped up at home every day.”

While some shoppers wasted no time returning to their favorite brick-and-mortar retailers after health orders loosened restrictions, the financial hurt that many Petaluma retailers incurred is likely to last, even as patrons start to trickle back into shopping centers.

Representatives with the outlet mall’s owner, Simon Property Group, did not respond to repeated requests for comment, including questions about the Petaluma location’s financial health and revenue.

City sales tax data show that Petaluma’s outdoor shopping mall is facing a substantial revenue shortfall, not immune to the same financial losses that have stressed the city’s independent and locally-owned establishments.

Data from the first and second quarters of 2020, which cover the months of January through June, illustrate this loss. Compared to last year, the city is raking in almost 58% less in sales tax revenue within the same quarterly period. Looking at 2018’s figures, the margin between 2020’s numbers is roughly the same, at 59%.

Ingrid Alverde, Petaluma’s economic development manager, said the city is forecasting a $1.35 million drop in sales tax, or an approximate 10% overall annual decline due to the pandemic. Numbers for the third and fourth quarters, which cover the months of June onward, are not yet available.

Alverde said in an email that the numbers are concerning, but were anticipated and incorporated in their sales tax forecast. Changes in spending patterns have also adjusted the city’s sales tax revenues, she said, with more online purchasing and spikes in some sectors, such as bike retailers and take-out dining.

Assistant City Manager Brian Cochran said the outlet mall, while majority retail, tends to attract its own type of shoppers.

“The outlets are their own destination, you drive there to do shopping either because you want a wide variety of stores or there are specific stores there you want to go to,” Cochran said. “So compared to the downtown area, you don’t have that foot traffic, and you don’t have those incidental walk-ins.”

More Americans are also changing their shopping behaviors during the pandemic, according to an October report from consulting firm McKinsey & Company. The report claims consumers are embracing the shift to online shopping as the months drag on, a trend they anticipate will dominate this year’s holiday season and impact the way people shop more long-term.

For several stores at the Outlet Mall, online purchasing acted as a lifeline to buttress revenue loss when the complex was closed. It’s a convenient – and possible – option for some of the chain establishments that have robust online inventories.

It’s what kept Alfonso Garcia, first assistant manager at Zumiez, employed during the spring shutdown months, even as his stores’ associates turned to unemployment benefits.

Garcia has worked at the Outlet Mall for four years, the last three at Zumiez, a clothing store that caters to teens and young adults.

He said he’s noticed larger crowds during the weekends, sometimes reaching numbers that were once normal pre-pandemic. Like many surrounding stores, Zumiez’ display windows announcing massive markdowns are now backdrops to new signage alerting shoppers to mask requirements, sanitation procedures and lines to enter.

Garcia said the changes haven’t been as difficult to maintain as he first thought, with shifts now punctuated by thrice-daily cleaning routines and an elaborate quarantine process for tried-on items.

Marin County resident Tracy Brusman said she primarily stuck to online orders during the spring months, but began to venture out to her favorite Petaluma shops over the summer.

“It’s nice to get some air and walk around,” she said. “I come to Petaluma a lot to shop, especially downtown, and during the weekends you see a lot more people are out now.”

(Contact Kathryn Palmer at kathryn.palmer@arguscourier.com, on Twitter @KathrynPlmr.)