Dana Park bucks drive-thru surge

Apr. 24—When California Pizza Kitchen in the Village Square at Dana Park closed in 2017, the Mesa shopping center owner Whitestone faced some choices for the vacant free-standing building.

One option, according to Whitestone CEO Christine Mastandrea, was to tear down the building and put in a drive-thru restaurant.

"We could have demolished that building and put a drive-thru in there real quick," Mastandrea said. "That actually would have been probably what most people would have done."

But Whitestone isn't "most people."

Instead, Whitestone subdivided the building into two units and attracted two new local sit-down restaurant concepts that are now open: the Original ChopShop, which started its first location in Old Town Scottsdale in 2013, and Lucky Lou's American Kitchen, a Vegas-themed East Valley eatery with four locations.

Those new eateries join over 20 other restaurants in the shopping center at Baseline Road and Val Vista Drive — none drive-thru.

Mastandrea said the new brands filling the old CPK building match many of the company's preferences for tenant restaurants: local, affordable — and sit-down — concepts for families operated by entrepreneurs.

Whitestone owns 49 shopping centers in Texas and Arizona, including six in the East Valley.

A scan of the company's East Valley centers reveals relatively few drive- thrus, and the two closest — the Village Square in Mesa and Tuscany Village in Gilbert — have none.

Mastandrea said across its portfolio of shopping centers, Whitestone does include drive-thrus and considers them a convenience for modern families.

But she said the company's vision of creating places that "bring people together" matches well with sit-down restaurants.

"People are looking for reasons to connect today," she said. "They're looking to get out. They're looking to be with other people."

The company derives 22% of its revenue from restaurants.

Eateries are an important part of the business because food, including groceries and dining, helps create "stickiness of a customer base that comes to visit often," Mastandrea said.

Many Mesa residents have been disappointed by the proliferation of drive-thrus at local shopping centers.

The trend toward more and more drive-thrus lining the street fronts of commercial areas has sparked an outcry among residents.

Last year, Mesa's Planning Department proposed changes to zoning rules that it hopes will limit the clustering of drive-thrus, including caps on their number in shopping centers.

But the rollout of the new rules has stalled amid fierce push-back from the commercial development community.

Whitestone's East Valley shopping centers have bucked the drive-thru trend.

Mastandrea identified a couple factors contributing to the surge in drive- thrus.

"No doubt there's been a change, especially since COVID, toward convenience and doing drive-thru restaurants and pickup and delivery," Mastandrea said. "That has greatly advanced during COVID."

Besides consumer and industry behaviors bending toward convenience during the pandemic, the current commercial real estate market has also made the development of drive-thrus attractive.

"I think the tendency for real estate today is to be able to take all the frontage and turn it into drive-thrus and then sell that off because those are very valuable," she said.

Mastandrea said these frontage lots are often turned into triple-net leases, an arrangement where a tenant is responsible for all the utilities, taxes and maintenance on the property in addition to rent.

This lease type is attractive to certain types of investors, and quick-service restaurants are a common triple-net tenant.

Mastandrea said one reason Whitestone properties like Village Square at Dana Park are not saturated with drive-thrus is because they've opted not to sell their frontages.

"We like to own the land and control the real estate for the long-term value because we're long-term holders," Mastandrea said. "If you make the choice just for drive-thrus only, that's a lot of times a short-term focus."

She said one of Whitestone's philosophies is to understand the local neighborhoods and try to meet their needs.

That's one reason why the company tries to bring in local restaurant operators when it can.

Local restaurateurs "live in the neighborhoods so they understand the customers the best," she said.

Everybody in Mesa, it seems, wants to have places to go that are upscale and offer comfortable places to work and interact with others in the community.

There's a concept in urban planning called "placemaking," which is creating public spaces that foster interaction and serve as the heart of a community.

But that's not easy to create.

"It's really hard to build up a new community and to add those kinds of places that bring people together," Mastandrea said.

It may be surprising to some that Mastandrea considers plants to be one of the most critical components of placemaking and creating a thriving commercial center without drive-thrus.

Vegetation is "one of the most important things about placemaking, especially in the desert," Mastandrea said. "People are looking for that little oasis to be able to spend time with family or their kids, and shade is an important part of it."

She said the greenery gives a "softness to the space," that can draw customers in.

Village Square's plant life includes mature palm trees, and when they became sick, the company went to Arizona State University for assistance and ultimately saved the trees by administering antibiotics.

Creating green spaces can be challenging, as the right plants need to be selected, maintained and replaced if necessary, but it's worth the cost and effort, according to Mastandrea.

For Whitestone, the effort to create an urban oasis starts with patios and then broadens out to walking paths and other spaces, she said.

Despite Mesa's challenges in attracting sit-down eateries in some parts of town, Mastandrea said she is "bullish" on Mesa because of its focus on job growth, infrastructure and support of the arts.

She said one way that cities can help shopping centers thrive without drive- thrus is to be flexible on parking requirements — allowing patios to replace parking spaces, for example.

Mastandrea said in her experience, Mesa has been better about adjusting parking ratios than other municipalities.

Commercial property owners can manage with fewer parking spaces by being smart about putting businesses together that are active at different times of day.

A breakfast place will use parking at different times than a bar and grill, for example.

Mastandrea said consumers also play a critical role in bringing local, sit-down restaurants to Mesa.

"It's tough already to be an entrepreneur," she said. "You kind of take on the world when you do these (restaurants), and so I would say the biggest thing is to support the locations, and when you do that, they find the ability to expand."