Macy’s Reportedly Negotiating to Be Anchor for Irvine Center
R. H. Macy & Co., one of the nation’s premier retailers, is on the verge of completing negotiations to be the major anchor tenant in the planned Irvine Center retail and commercial complex, sources said Wednesday.
The New York-based chain has also decided to build a department store in Marina del Rey as part of its long-expected plunge into the fiercely competitive Southern California retail market.
The planned Irvine and Marina del Rey sites “probably will be the first” Macy’s stores to be built in Southern California, with construction expected by the early 1990s, said a source close to the chain.
Macy’s choice of the Irvine Center complex, to be developed by the Irvine Co. at the juncture of the San Diego and Santa Ana freeways, is a setback for C. J. Segerstrom & Sons, developer and owner of the South Coast Plaza shopping center. With 1986 sales of $489 million, the Costa Mesa shopping center has long been a national leader in sales and prestige.
Segerstrom, in fact, was “very interested” in snaring the first Macy’s in Orange County for either Costa Mesa or the newly remodeled Main Place/Santa Ana mall, sources said.
Macy’s choice of the Irvine Co. site “was just a judgment call. With a new center, you get to choose your environment,” a source close to Macy’s said.
Officials with C. J. Segerstrom & Sons declined comment.
In addition to the Marina del Rey and Irvine sites, the San Fernando Valley is a “good bet” for a third location and almost certainly will get a Macy’s store before 1995, said sources close to the chain.
Macy’s already has 25 stores in Northern California. The chain has long been considering Southern California, where it could enjoy a tactical advantage over other newcomers.Its existing administrative and warehousing facilities in California could service new stores in the Los Angeles, Orange and San Diego areas, industry sources said.
“It makes sense that they would want to come into Southern California with several stores, because savings are proportionate (to the number of Macy’s outlets),” said Richard G. Sims, group president of the Irvine Co.’s investment properties division. Sims confirmed that the Irvine Co. is actively negotiating with Macy’s and is optimistic that an agreement will be signed by the end of the year for the site at the freeway junction.
Sources close to the chain said Macy’s expects to sign a letter of intent with the Irvine Co. by early November to become the lead anchor store in the long--delayed Irvine Center regional mall.
But even with other retailers already battling for Southern California’s shopper dollars, observers predicted that Macy’s will quickly become a major market force.
Full-Line Store
As a full-line department store, Macy’s carries appliances and furniture, for example, in addition to men’s, women’s and children’s apparel. The chain scores high marks with industry observers for merchandising and its wide variety of merchandise.
“They do an extremely good job wherever they go,” said Val P. Keller, a retail specialist with Laventhol & Horwath in Costa Mesa.
Industry experts consider Macy’s to be a natural for Irvine because of its easy access to the freeway intersections and its proximity to affluent Orange County neighborhoods.
The chain is also seen as an ideal match for the Irvine Co., which has been looking for a merchandiser not yet located in Southern California to give the new mall a special allure for shoppers.
“We have development agreements with the city all behind us,” Sim said. “And Irvine is where the population growth has occurred--and will occur--in Orange County.”
In Marina del Rey, Macy’s has signed a letter of intent with Melvin Simon & Associates, an Indianapolis-based developer, to build a store in a proposed new center at Marina Place, according to a source close to the chain.
‘A Contingent Deal’
In fact, the deal with Macy’s is said to hinge on Simon receiving approval for the necessary entitlements and zoning. Sources described completion of a Macy’s deal with the developer as “a contingent deal. It has outs--such as if (Simon) can’t get the necessary approval on time.”
But Gregory Glass, a senior vice president of development with Melvin Simon & Associates in West Los Angeles, denied that the company has signed a formal letter of intent with Macy’s.
He confirmed, however, that Simon “has talked with Macy’s about opportunities everywhere.”
According to sources close to the chain, Macy’s is also talking with another developer and is seriously considering an alternative site in Marina del Rey on Admiralty Place in case Simon cannot obtain approval on time.
“There’s a contingent deal and a competition going on between the two (developers),” the source said. “Both deals involve the same tenants and the same site. . . . Whoever comes up with the zoning first and meets all the conditions (will win),” the source said.
