What was once a modern edifice that the city of Sunnyvale hoped would help bolster a sagging downtown into a thriving economic base may have been doomed from the start.

Twenty years before the mall was even a twinkle in the city council's eye, another effort to build up downtown business emerged in the 1950s. The Sunnyvale Plaza Shopping Center, created in the tradition of "Main Street USA," encouraged residents to come downtown for retail shopping, banking and other business. The Sunnyvale Plaza enjoyed success up until the late 1960s and early 1970s, when once again business downtown started to deteriorate, even as Town and Country Village opened in 1968.

Downtown development became a major issue in council chambers then, and the city drew up preliminary plans in 1976 to build a centralized, regional shopping mall in place of the Plaza.

But the mall idea was controversial and even generated a citizens' lobbying group, ORCHARDS (Organization of Responsible Citizens to Halt Reckless Development in Sunnyvale), that opposed further industrial development in the city and wanted more open space. The group succeeded in getting one of its own aboard the council when ORCHARDS member Larry Stone was elected in 1975.

Stone said the proposed mall was too big and cast the only dissenting vote against the project. Despite his objections, the Plaza was demolished in 1977, including almost 35 acres covering nine city blocks and the destruction of the old City Hall, 90 residences and more than 100 retail and commercial businesses. All that remained standing were redwood trees that 81-year-old Fern Ohrt fought to save because they were part of Sunnyvale history.

In 1978, amid the construction, business owners and residents also begin to voice opposition to the mall. Business owners began to realize their rent would increase exponentially, and residents were afraid that other homes near the mall would be razed for future development.

Despite opposition, the Sunnyvale Town Center opened in September 1979. But the project cost $60 million and was a loss from the beginning. Propostion 13 cut property taxes on the mall, which the city had been depending on to repay the bond money it used to construct the mall. So the mall cost the city $1.6 million in bond payments each year.

And over the years the mall enjoyed limited success. In 1998, American Mall Properties bought the mall and installed a movie theater, which closed in 2000 and later became IMC 6, an East Indian movie theater.

The city is now tossing the mall into the dumpster for what planners and business owners think will breathe life back into downtown Sunnyvale. The city is going back to the future by returning the area to the traditional street grid of the 1950s. But tearing down the one and only mall in Sunnyvale is not being done without mixed reactions.

The demolition of the old mall has already started internally, says James Baron, the state court appointed receiver for the Sunnyvale Town Center.

The redeveloped downtown will be similar in structure to San Jose's Santana Row, though not as dense and massive and not with a theme-based design.

Anchor stores Macy's and Target will remain open, while the owners of 30 or so businesses currently in the mall must figure out where to go. Baron says most of the stores in the mall have already made plans.

"As far as I know, most of them are staying in Sunnyvale," Baron says.

For many stores in neighboring Town and County Village and on Murphy Street, the failing mall's closure is positive, because the mall wasn't drawing customers to the area.

But the change is creating hardship and disappointment for some.

For Mohamed Elguindi, owner of The Bottom Line store in the mall, this is yet another bad announcement. Elguindi was forced to close down his men's clothing store in San Jose's Eastridge Mall last February after a slump in his business—and now this store is closing.

Elguindi, who is moving his business to the East Bay, says he's gotten negative feedback from his customers about the mall's closing.

"It was a place for them to go shopping," Elguindi says. "We have lost a lot of business and customers."

The general consensus of business owners in the mall is that the management has been ineffective.

"I think it would have been better if the mall had gotten a facelift," Elguindi says. "I wish [the old management] had kept the promises they made about remodeling and bringing movie cinemas."

Another store operator in the mall, Raj Singh, also complains about the management. Singh, who runs a customized engraving store called Sterling City, says he feels like he is being kicked out.

"They just gave us notice to leave one day," he says. "They never talked to us."

Sunnyvale resident Gill Loaec, who has been a regular shopper at the mall, says it's terrible that the mall has to close down.

"It was a very compact and organized mall, but it received no publicity from the city and the people who ran it," says Loaec, who has lived in Sunnyvale for 33 years.

Loaec, 74, complains that the city will not have a single shopping mall once the Town Center closes.

"The town has been antibusiness," he says. "I guess people will have to go to the Great Mall in Milpitas or Vallco in Cupertino to shop."

But there is some light at the end of the long tunnel of downtown woes. The city of Sunnyvale and the Georgia-based Forum Group, the potential developer, have optimistic plans for the redevelopment of the mall property.

The Forum Group plans to take down the mall and rebuild much of the original street grid that the Sunnyvale Plaza encompassed. The plans will build off the success of Murphy Avenue, the only block left standing from the old downtown.

The redeveloped downtown will be an open space shopping area that will include retail stores, housing and movie theaters, says city spokesman John Pilger.

"The plan calls for that area to return to the old downtown and reopen the grid to make it a downtown district," Pilger says. "The redevelopment will have an individual character and tie in naturally with Murphy Street."

Ron Pfohl, managing member of the Forum Group, characterized the new downtown as a live, work and play type of environment. "The more we've become involved, the more we realize its importance to the city. We're going to sit down with citizens' groups. It's important they embrace this property. After all, it's theirs," says Pfohl.

The meetings are a good thing for the Friends of Sunnyvale, who in ORCHARDS fashion formed a coalition last year to oppose the downtown development and to ask for more open space and a town green.

As for the old mall, Pilger says, "Back in the '70s, it was the best thinking of the time. That suburban model of an enclosed shopping mall no longer works in an urban environment."

The city says economic reality has compelled the city to close the mall, which has only 30 tenants and is not raking in any profits.

There is a tax benefit to the city from redeveloping the structure, Pilger says.

"If empty, the property is taxed at a lower rate. When it is developed, it's taxed at a higher rate," he says. "This is one reason to tear it down."

Pilger says that until the mall is redeveloped and the downtown becomes thriving again, the city will not realize any money in terms of tax revenues.

Some downtown shop owners are worried that the construction will drive people away and cripple their business.

Rick Williams, manager of Haight and Ashbury Music Store in downtown, says the construction will block all the streets and could deter shoppers from visiting.

"However, it can only go up from here," Williams says.

Williams says he thinks the closing of the mall will have a minimal effect on his store and downtown.

"They're going to keep Target and Macy's open, and those are the only stores that are doing any business anyway," Williams says.

Williams appreciates the idea of opening up the mall and transforming it into an open shopping area.

"If you look at the way other malls like Valley Fair are going, this mall looks dated, dark and dingy," Williams says. "Knocking it down is an improvement. It's a big, ugly building. These guys didn't stay with the times—they didn't really push the excitement button."

Venkateshwaralu "Lu" Muvva, owner of the IMC 6 Indian movie theaters in the mall, still doesn't know the fate of his theaters. He says he has yet to negotiate with the new owners and find out if he can keep his theaters open.

"This is the only place Indians can watch movies in the South Bay," Muvva says. "The other option is to go to East Bay."

Muvva says his theaters do well irrespective of the slow business in the mall.

"In fact, many of my customers shop around in the mall," Muvva says.

Joe Antuzzi, chairman of the Sunnyvale Downtown Association, says the new mall owners should work closely with existing downtown shop owners in the redevelopment plan.

"If they integrate the design and return to the street grid, it could be a very positive thing," Antuzzi says. "If it becomes a separate entity, then we will not be too crazy about it. Our goal is to make it one downtown."

Suzi Blackman, president of the Sunnyvale Chamber of Commerce, is hoping for a positive change to downtown with the new plans. Once the construction starts, she says, it will have a huge impact on downtown businesses. The important thing is for the city to stay in touch with the construction company and collaborate with it to help customers and shops in terms of parking and traffic, Blackman says.

She uses the metaphor of an ailing old man to describe the Town Center Mall.

"When the mall closes Aug. 31, it will be sort of its last dying breath," Blackman says. "It has already been dying for a number of months."

Some of the historical facts for this article came from "Sunnyvale: From the City of Destiny to the Heart of Silicon Valley" by Mary Jo Ignoffo, published by the California History Center Foundation in 1994.

Sun staff writer Pallavi Somusetty contributed to this article.