Traffic Up 25% at Newport Mall : Favorable Verdict for Fashion Island’s Court

Fashion Island, the swanky Newport Beach shopping center, suddenly is giving nearby South Coast Plaza a new run for the retail dollar.

The virtual overnight success of the new and bustling Atrium Court shopping structure at Fashion Island has put new vigor in the competition for Orange County’s shoppers. And Irvine Co., which owns the Newport Beach mall, has substantially sweetened its budget for the center’s renovation to a whopping $116 million for what was originally a $20-million project.

Plans now call for a drastic remodeling of Fashion Island in the mold of the unusual three-story Atrium Court, which since May has become the 18-year-old center’s heartbeat.

Since the Atrium Court opened less than six months ago with the Irvine Ranch Farmer’s Market as its anchor, foot traffic at the center is up nearly 25%, said Dave Mudgett, president of Irvine Retail Property Co., Irvine Co.’s retail division. And, during that same period, sales have been 33% higher than the same time a year ago.

Sales Up Strongly

Fashion Island’s sales have increased to a $210-million annual pace since the Atrium Court opened, compared to 1984 sales of $157 million, center officials said. At South Coast Plaza in Costa Mesa, the county’s premiere shopping center, officials do not release specific sales figures, but they say that sales this year are expected to be “well ahead” of 1984’s sales of about $400 million.

Additionally, nearly 30 upscale shops are scheduled to open this weekend inside the Mediterranean-style Atrium Court--a structure that already ranks as one of the county’s busiest lunch spots. Another 20 shops are scheduled to open there by spring.

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

The revamped plans include construction of new stores as well as renovation of existing buildings at the center.

“Our ultimate hopes are that we can become a town center for this area,” said Roger Seitz, 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. Fashion Island’s patronage has lagged behind South Coast Plaza since the Costa Mesa center opened 18 years ago, luring customers from all over the Southland.

Now Fashion Island hopes it can also increase customer traffic 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.

Higher Rents

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

South Coast Plaza officials admit being 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. South Coast’s expansion will add 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,” Mudgett said.

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.

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,” Draper said.

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.

For all the blessings it has brought Newport Center, the Atrium Court has sent Irvine Co. officials back to the drawing board. The same crowds that are bringing more money into the center are also creating an unexpected noise problem, and owners of some exclusive boutiques have already expressed reservations about the lunchtime noise that filters into their shops.

But it’s a happy--and new--sort of dilemma for Fashion Island officials. They hope to solve the problem by architecturally softening the noise rather than by decreasing the crowds, said Richard Schneider, the center’s director of retail leasing.

“I got a call from a developer in Paris who asked about the Atrium Court,” said Schneider, “And I asked him, ‘Where do you think we got the idea?’ ”