Expansions, New Mall in Huntington Beach-Westminster Area : 2 Cities Are Hot Items in Retail Market Boom

Suddenly, retail competition among major developers is heating up in--of all places--aging Westminster and Huntington Beach.

This surprising jockeying for retail space is mostly taking place in areas that have played second fiddle to major mall expansions under way in some of the county’s more glamorous coastal cities.

Central to this activity is Huntington Center, which has substantial expansion plans in the works, and Westminster Mall, which is also expected to soon announce plans to refurbish and expand. Loehmann’s Five Points Plaza in Huntington Beach also underwent an extensive renovation earlier this year.

At the same time, ground is scheduled to be broken for another huge center, Pavilion, later this week in Westminster. And if all goes well, developers of that center hope to build another one just like it--also in Westminster--within a few years.

Retail analysts say that behind this new growth are two key factors. First of all, an intense battle of retail developers continues to rage countywide, including more than $600 million in proposed or ongoing major mall expansions. Concurrently, there has been a recent realization by local retail developers that many portions of the central county are still booming growth areas both in population and disposable income.

The entire county is seeing an influx of retailers, including expansion plans at seven major malls. Among them, expansions of $150 million at South Coast Plaza, $60 million at Fashion Island, $75 million at the Mall of Orange and $150 million at Fashion Square in Santa Ana. Expansions are also planned at the Anaheim Plaza and Brea Mall.

But retail analysts are now pointing to an area within a three-mile radius of the San Diego Freeway and Beach Boulevard as one of the county’s key retail growth sectors.

“It’s a terrific place to put a store,” said Craig Curtner, a consultant at National Decision Systems, a San Diego-based marketing and demographics information company. “Not only do the people who live around there make great money, but the population also continues to grow.”

Population in the area grew by more than 10,000 in the past five years and is projected to grow another 10,000--from the current 199,000 to 209,000--by 1990, Curtner said. “The people there have more than a few years on the job and (have) extremely good buying power,” he added. Average household income in the area is $37,250, he pointed out.

Besides generating hundreds of millions of dollars in retail sales and placing many millions more in the tax coffers of city governments, the retail growth is also adding new jobs. In fact, an estimated 20,600 retail jobs are expected to be added countywide during 1985 and 1986, for a two-year growth rate of 11.3%, according to an annual planning study just released by the state’s Employment Development Department.

Many of those jobs will end up in the central county sector, including more than 400 jobs at the $25-million Pavilion, an open-air center at Beach Boulevard and Heil Avenue, that begins construction this week and is scheduled to open in July, 1986.

“This is the retail heartland of America,” said Kenneth T. Howe, managing general partner of Westminster Investment Group, which will own the 65-store Pavilion. The outdoor center will be anchored by a 100,000-square-foot Target and a 60,000-square-foot Von’s super store. It will also have five restaurants.

But because of the many millions of dollars that local competitors are spending to make their centers appeal to shoppers’ eyes--as well as their pocketbooks--Pavilion developers have opted to give fancy mall atmosphere to what actually will be a fairly basic center.

The owners will spend more than $1 million in landscaping, including $90,000 on palm trees, Howe said. Also, a translucent, maroon canopy will protect shoppers from wind and rain. “We’ll satisfy real people needs in a sophisticated environment,” Howe said.

So optimistic are the owners that they are projecting first-year retail sales of $100 million, which would top even the $95.8 million in retail sales posted by the Huntington Center in 1984, according to figures from the state Board of Equalization.

But with an eye on the oncoming competition, the Huntington Center is not standing still. Next year, the mall plans to add 25 new stores to its current 63--including a fourth department store expected to be a Mervyn’s, Robyn Shaffer, the mall’s marketing director, said.

Recently, however, the center has had its share of headaches. A department store, the Akron, moved out in March, and its space has been empty ever since. But a Circuit City electronics store has signed a lease to move into that space in November.

Under renovation plans, the Huntington Center also plans to add an elaborate food court and relocate a number of old tenants to a new wing to be built in what is now the parking lot between J.C. Penney and Montgomery Ward, Shaffer said.

Earlier this year, Loehmann’s Five Points Plaza in Huntington Beach spent more than $4 million to expand and renovate, according to Ronald Sher, partner at Terranomics Inc., the San Francisco development company that owns the 35-store center. He said that sales are expected to double within one year.

Not to be outgunned, owners of the nearby Westminster Mall are also looking at possible expansion. “Every new retail operation represents more competition. We can’t afford not to pay attention,” said Michael Ash, general manager of the center that posted 1984 sales of $189 million, second countywide to South Coast Plaza, which recorded 1984 sales of $379 million.

But the changes at Westminster Mall are still a few years off, said Roger McGonegal, regional manager at Pembrook Management Inc., the New York company that owns the mall. And he would not disclose any details. “Expansion usually involves adding department stores, and as far as we can see, there are an awful lot of stores coming into the market.”