Stores in Expansion of South Coast Plaza to Test Water With Dry Run
After years of planning, 18 months of construction, and weeks of hype and hoopla, the giant $100-million expansion of South Coast Plaza quietly opens today for a four-day dry run, or “soft opening,” before the official ribbon-cutting Friday.
As many as 20 of the 48 stores that so far have leased space in the 70-store Crystal Court complex, including JW Robinson’s and the Broadway department stores at either end of the 685,000-square-foot project, will be open for business to gauge sales and customer volume before the official grand opening Oct. 31.
Excluding the space occupied by the two large department stores, approximately 71% of the three-story Crystal Court mall is leased, according to Carol Wilson, director of leasing for C.J. Segerstrom & Sons in Costa Mesa, owners of the mall.
Meanwhile, as interest focuses on the newer mall, across the street dust continues to fly in the original mall of South Coast Plaza. Workers are painting and polishing in a harried effort to meet a Nov. 1 deadline for reconstruction of the store Nordstrom vacated in May when it moved to a twice-as-large facility in the original mall. Only 40% of the 88,000 square feet in what South Coast Plaza is calling the “Nordstrom Wing” is presently leased.
With the two expansion projects, the already-sprawling mall will grow from 200 to 300 stores--eight of which will be department stores--and will encompass almost 3 million square feet, making it the largest concentration for retailing in California, said Maura Eggan, a spokeswoman for South Coast Plaza.
But according to Everett Steichen, a real estate consultant with Wallace & Steichen in Palo Alto, adding more stores will not add that many more sales to the center. “Supply does not create demand,” Steichen cautioned.
Still, he said, projected sales for the mall in 1987--the first full year of sales after the expansion--will total $735 million, with $150 million of that total coming from Crystal Court business. The mall posted sales of $450 million in 1985 and Eggan said $500 million in combined sales is expected this year.
More Visitors Expected
The developers believe that the new shops at Crystal Court and at the former Nordstrom site will encourage more visitors to come to the mall--much as additions at Fashion Island in Newport Beach spurred sales there last year.
But some concerns have been voiced by analysts that Crystal Court might have lower sales levels because it is located across a busy street from the rest of the mall.
Alfred Gobar, a Brea-based real estate analyst, predicted that sales volume would not expand in proportion to the increase in square footage brought about by the new additions. And, he said, the new mall would not do the same volume of trade as the existing mall.
“There is some point at which expansion . . . of a center does not expand trade at that center,” Gobar said. “(South Coast Plaza) is at or close to that point.”
Also, Gobar said, it would be “better if the two entities could be interconnected” because “historically it has been difficult to get people to cross a street.”
Bear Street, a four-lane thoroughfare, separates the two malls.
Anton Segerstrom, an operations manager for the new addition, plays down the significance of the separation of Crystal Court from the rest of the mall. He said he views the new addition as “another wing, if you will” of South Coast Plaza.
Signals Link Centers
Helping to link the two centers are traffic signals at both ends of the complex geared towards pedestrian traffic, Segerstrom said, and a valet parking program at Crystal Court that will fetch cars that customers originally parked in the larger mall across the street. A tram system is in the works but nothing is “positively formulated,” Segerstrom said.
While the Costa Mesa City Council rejected the concept of a pedestrian walkway over Bear Street, Michael Hecht, chairman of the Broadway chain, said he expected Crystal Court would eventually get such a walkway.
Although Wilson said rents had no influence on the amount of leasing activity at either area, rates are slightly higher in the Nordstrom Wing--between $4 and $8 per square foot--than at Crystal Court, where rates range from $3 to $7. Generally, smaller stores have higher square-foot costs, Wilson said.
Gordon Segal, co-founder of the Crate & Barrel chain of housewares stores, said he decided to open his first Southern California branch in the old part of the mall rather than in Crystal Court because of proximity to Nordstrom.
His store will open today in the former Nordstrom site, which is being carved into 20 to 30 shops.
Nordstrom customers, he said, are “very much our customers.” Also, Segal said the space available to him was more suitable to his need for an extensive warehouse area than space at Crystal Court. Segal also cited more foot traffic in the part of the mall he selected as another factor.
Sales in Fashion Island
Hecht at the Broadway and Steven Regur, a spokesman for Robinson’s, both said they felt sales would drop at their stores at Fashion Island in Newport Beach as curious shoppers explored the new stores in Costa Mesa. But once the curiosity has worn off, “business will come back after the holiday season very strongly,” Hecht said. Regur said that Robinson’s spent over $6 million to spiff up its Fashion Island store to make sure it kept attracting a profitable volume of customers even after the opening the store at South Coast Plaza.
Still, Regur said, “(South Coast Plaza) is a new trade area and will supply new business. We’ll do considerably more sales in two stores than in one.”
Some of the stores in Crystal Court will not be opening this week, Anton Segerstrom said, mainly because of logistical problems for some tenants. And, he said, his family’s company is not really in a hurry to fill up empty square footage anyway. The primary concern, he said, is finding tenants that will complement and expand the shopping opportunities of the older mall.
“We welcome inquiries,” Segerstrom said, “but normally the tenants here are the ones we go after, not the ones that come to us.”
