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Fashion Island Finds Place in Sun : Instant Success of Atrium Court Sparks Expanded Plans

Times Staff Writer

Fashion Island is suddenly giving South Coast Plaza a new run for the retail dollar.

Shocked--but happily so--by the virtual overnight success of a new and bustling shopping structure at Fashion Island, the Irvine Co., which owns the center, has substantially upped its budget for the center’s renovation to a whopping $116 million from what was originally a $20-million project.

Plans now call for a drastic remodeling of the Newport Beach shopping center in the mold of the unusual three-story structure--Atrium Court--that since May has become the 18-year-old center’s heartbeat.

Nearly 30 upscale shops are scheduled to open this weekend inside the Mediterranean-design Atrium Court--a structure that now ranks as one of the Southland’s busiest lunch spots. Another 20 shops are scheduled to open in the Atrium by spring.

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The revamped plans call for adding nearly 180,000 square feet of new retail space to the existing 1.1 million square feet.

Since the Atrium Court opened less than six months ago with the Irvine Ranch Farmer’s Market as its anchor, pedestrian traffic at the center is up nearly 25%, said Dave Mudgett, president of Irvine Retail Property Co., the Irvine Co.'s retail division. During the same period, the center’s sales have risen at a 33% clip compared to the year-ago period.

$210-Million Annual Sales Pace

Fashion Island officials say that sales have increased to a $210-million-annual pace since the Atrium Court opened, compared to 1984 sales of $157 million. South Coast Plaza officials do not release specific sales figures but say that 1985 sales are expected to be “well ahead” of 1984’s sales of about $400 million.

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What all this spells for Fashion Island is retail relief. With a $150-million-plus expansion taking place at rival South Coast Plaza--Orange County’s dominant mall--Irvine Co. executives have quietly worried that they might lose tenants and business to the expanding center. But with their own ongoing renovation meeting such early success, Irvine Co. executives have decided to revamp what was once billed as a face lift into a major redevelopment of the 109-store center.

“Our ultimate hopes are that we can become a town center for this area,” said Roger Seitz, the Irvine Co.'s vice president of planning and urban design. Such a move would represent a major reversal from the center’s long-held position as a place frequented by the elite--but by virtually no one else. Its patronage has historically lagged far behind that of South Coast Plaza.

Now, Fashion Island hopes it can also increase customer traffic by appealing to shoppers by adding a greater number and variety of smaller boutiques. High-end shops such as Fiorucci, an Italian sportswear store, will coexist with the likes of costume jewelry stores.

Nearly 30% of the Atrium Court is already rented, despite the fact that average rents are about 25% higher than the center’s exterior shops. Fashion Island officials, however, point out that Atrium shops are expected to do higher volume business than many of the center’s other stores.

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South Coast Plaza officials are openly impressed. “There’s no doubt about it, the changes (at Fashion Island) will have an impact on retailing in Orange County,” said Maura Eggan, marketing director at South Coast Plaza, the Costa Mesa mall that is adding nearly 1 million square feet of retail space to its current 2 million square feet.

Just as South Coast Plaza attempts to separate its upper-end shops from its lower-end shops, Fashion Island now intends to regroup its various shopping segments. “We are going to a districting and clustering of our retailing,” said Mudgett.

Live Entertainment

The center is also focusing on entertaining customers with live music, more special events and the possible addition of a playhouse and movie theaters, Mudgett added.

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A plethora of renovations and a new focus on entertainment is taking place at shopping centers all over the country, said Ranney Draper, Southern California trustee for the International Council of Shopping Centers and a partner at Diversified Shopping Centers of Costa Mesa. “Fashion Island was losing market share and attacked the problem aggressively and creatively,” said Draper.

One possible roadblock to this redirection, however, is the City of Newport Beach. In order for much of the newly proposed expansion to take place the city must approve a general plan amendment for the entire center. The city is slated to tackle that task within the next six months and despite some expected opposition, Irvine Co. officials hope to have most of the renovation completed late next year.


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