Part of La Habra Mall Is Reportedly for Sale : Center Suffers From Poor Revenues; One of Its Three Owners Said to Be Willing to Sell at a Loss
The largest of three owners of La Habra Fashion Square--the small, sleepy mall that has been one of Orange County’s worst performers for years--is trying to sell its interest in the center for less than $14 million, a price that would mean selling at a loss, sources said Monday.
An Orange County developer has proposed converting the 18-year-old mall into a promotional center with high-volume, discount retailers, the sources said. The developer reportedly has an option for five more weeks to buy most of the parcel.
About 14.4 acres of the La Habra center was bought in late 1985 by City Freeholds USA Inc., a privately owned developer in Buena Park that also owns the Buena Park Mall and Sherman Oaks Fashion Square. Freehold’s interest, which includes 175,000 square feet of buildable space and the mall’s specialty stores, reportedly cost more than $14 million.
The 40-acre retail shopping center, located at the corner of Imperial Highway and Beach Boulevard, is anchored by Buffums and Bullock’s department stores. The 120,000-square-foot Buffums site is owned by Los Angeles-based Gilbert Investments. Bullock’s 271,000-square-foot parcel is owned by the chain’s corporate parent, Federated Department Stores. City Freehold owns the rest of the mall.
David Sauers, executive vice president for City Freeholds, denied Monday that Freehold’s interest is for sale. But Sauers refused to confirm or deny whether a developer has an option to buy the parcel. “All options are being explored. . . . Anything’s available for a price,” said Sauers, who added that his company is considering ways to redevelop the property.
Sources, however, said the proposed sale seems to be aimed at solving La Habra Fashion Square’s longstanding problem: abysmal sales.
The 40-acre center, which has a retail area of 565,618 square feet, has long suffered from poor freeway access and growing competition from malls in nearby Brea and along Whittier Boulevard.
In 1985, the most recent year for which data is available, La Habra Fashion Square had taxable retail sales of $27.8 million, ranking it 13th out of Orange County’s 14 regional centers.
In annual sales per square foot, La Habra Fashion Square is last in a ranking of 48 Southern California regional shopping centers compiled by The Times. In the survey, the center posted sales of $50.78 per square foot, compared with South Coast Plaza at $190.09 and Santa Monica Place, which led the list at 221.50 per square foot.
About 11 of the La Habra center’s specialty stores are vacant.
The would-be buyers of the La Habra mall are said to be either SDC Development Co. of Newport Beach or Dicker-Warmington Properties of Fullerton, according to a source who asked not to be named.
SDC could not be reached for comment on Monday. Jerry Dicker denied that Dicker-Warmington is buying the parcel.
Both, however, have a good track record in developing open-air, community shopping centers of up to several hundred thousand square feet. Dicker has built neighborhood shopping centers throughout Southern California. SDC, headed by President Gary Hamilton, recently built two projects in Laguna Niguel, an Alpha Beta rehabilitation project in Laguna Beach and a neighborhood center near the Brea Mall.
Industry sources, however, assessed the ultimate chances of a drastic make-over for Fashion Square at about 50-50. The developer “will need one of the other parcels” now owned by Federated and Gilbert investments.
At Federated’s West Coast regional office, Stephen Stephanou, real estate manager, said only that “people have contacted us who may have been interested in buying the center.”
Bill Hansen, chief executive at Buffums, said that City Freeholds is “considering” selling its parcel and that a prospective buyer has “had preliminary talks about buying ours to go with theirs.”
If a deal goes through, however, experts are betting that a change will help. “I would think there should be substantial interest by (promotional) tenants to be in that marketplace,” said Robert A. Peterson, vice president in commercial real estate services at Coldwell Banker.
