Billionaire real estate magnate Rick Caruso, who has spent several years trying to develop Montecito’s Miramar Hotel property into a luxury resort, is now taking a crack at running one of the region’s premier retail centers.

A spokeswoman for Mr. Caruso’s Los Angeles-based company, closely held Caruso Affiliated, confirmed Monday that it has taken over management of Paseo Nuevo from the Macerich real estate company effective July 1. Mr. Caruso’s company will commence managing the shopping mall at the request of its owners, institutional investors advised by J.P. Morgan Asset Management.

“Santa Barbara is a wonderful community with a rich history and unique style,” said Mr. Caruso, founder and CEO of Caruso Affiliated, in a prepared statement. “We’ve had a great deal of interest in the Santa Barbara retail market and we are pleased to be involved with Paseo Nuevo.
“We look forward to working closely with existing tenants while we seek potential opportunities to ultimately deliver a high-quality experience for guests.”

Financial terms of the management contract were not disclosed.

Mr. Caruso and other company officials also were unavailable to provide specifics on the length and scope of the company’s management contract at Paseo Nuevo; Caruso Affiliated’s possible interest in La Cumbre Plaza, which is owned by Macerich; and whether land acquisition at Paseo Nuevo is envisioned at a future date.

Calls to Macerich regarding its plans at La Cumbre Plaza were not returned by deadline.

Macerich had apparently been looking to give up its management contract at the shopping center for some time, said Austin Herlihy, a broker with Radius Commercial Real Estate & Investments.

“Caruso was a likely candidate since he’s already familiar with the area,” by virtue of his proposed Miramar development said Mr. Herlihy, who has extensive experience representing buyers and sellers in the downtown core.
 
“He’s not getting a million square feet (of retail to operate), but I’m sure he’ll want to make it more of a happening place,” he said of the billionaire, who is the son of the founder of Dollar Rent-A-Car.

Two of Caruso Affiliated’s properties – The Grove and The Americana at Brand – in 2012 ranked in Shopping Center Today’s list of the top 15 shopping centers in the world based on sales per square foot. The Grove attracts more guests per year than Disneyland, according to Caruso Affiliated. (Disneyland does not release specific attendance figures.)

Mr. Herlihy said it’s likely that Caruso Affiliated will attract sought-after national and international retailers and make capital improvements to the center.

According to its website, Affiliated claims that tenants’ growth is approximately two times that of the largest publicly traded REITs, and sales per square foot at Caruso properties are 75 percent higher than the national industry average. In addition, average consumer expenditures are nearly double that of regional malls and sales growth is nearly three times that of traditional malls.

With Caruso running Paseo Nuevo, the spillover effect to nearby State Street retailers will be positive, not to mention city sales tax receipts, said Mr. Herlihy.

Paseo Nuevo, an open-air regional mall, opened in downtown Santa Barbara in August 1990. The 462,000-square-foot center consists of two major department stores, Nordstrom and Macy’s, retail shops, an on-site parking garage and a facility that includes an art gallery, a small performing arts theater and an outdoor amphitheater.

The shopping mall was the culmination of over five years of planning, permitting and construction by the City of Santa Barbara Redevelopment Agency. Its principal responsibilities were to acquire and consolidate the real property necessary for the project, relocate businesses from the acquired sites, demolish the existing improvements and develop two off-site parking structures.

Costs to the agency for acquisition, relocation, demolition and public improvements were more than $31 million.

On the hospitality side, Caruso Affiliated still is in development on The Miramar Beach Resort and Bungalows, its first luxury resort property in Montecito.

Construction of the new Miramar hotel could begin as early as next year, with an opening in 2016, the resort’s developer said at a January 2013 press conference on the grounds of the historic Montecito property.