Ontario Mall to Cluster Several Factory Outlets

An East Coast developer announced plans Tuesday to build a 1.5-million-square-foot shopping center in Ontario that would feature Southern California’s first large concentration of manufacturers’ outlet stores.

Construction of the 130-acre, $150-million center, to be called Ontario Mills, is to begin next year, with an opening scheduled for spring, 1991. Plans call for 250 stores, to be divided equally among outlet stores, specialty, one-of-a-kind merchants, and off-price retailers selling brand names at a discount.

Smaller Than Plaza

“We call it a super-regional specialty mall,” said Herbert S. Miller, chairman of Western Development Corp., the Washington builder that plans to put the mall at the heart of the 673-acre Ontario Center. That mixed-use development, on the site of the former Ontario Motor Speedway, is owned by Chevron Land & Development.

At 1.5 million square feet of retail space, the new outlet mall would be a little more than half the size of South Coast Plaza in Orange County, which has 2.7 million square feet.

In the Northeast, Southeast and Midwest, shoppers have warmed in recent years to the sport of bargain-hunting at outlet stores, where they forgo frills such as fancy dressing rooms for discounts of as much as 50%. Many of the stores started as adjuncts to manufacturing facilities in the nation’s mill towns, but in the past few years entire malls of outlet stores have sprung up.

At the Ontario center, at least 80% of the stores “will be indigenous only to this center, to make them unique enough so that people will want to come long distances,” Miller said. He anticipates that shoppers will journey from as far as 40 to 50 miles, compared to the 5- to 7-mile radius for a typical regional mall.

Western Development has a similar project, Potomac Mills, in Prince William County, Va., which, with 1.3 million square feet, is reportedly the nation’s largest off-price mall. It includes Ikea, a discount furniture store from Sweden that has become a raging success in the East.

Philadelphia Project

The mall, which opened in 1985, also includes Waccamaw Pottery, a housewares specialist and apparel outlet stores for Maidenform, Gitano, Murjani, Calvin Klein and Levi Strauss.

Franklin Mills, another project, is under way in Philadelphia. It counts among its “anchor” stores a Carrefour hypermarket, which sells groceries and general merchandise at discount under one gigantic roof. The store, an outgrowth of a European concept that is just starting to gain a foothold in this country, held its grand opening Tuesday.

Miller declined to identify retailers who have signed on for the Ontario project but indicated that a hypermarket might be included.

He views the specialty off-price mall as an idea whose time has come for the “spoiled baby boom generation” that wants the ambiance of a mall along with competitive prices.

The Ontario mall will feature food courts, movie theaters and attractive decor, unlike many bare-bones outlet and off-price businesses.

“In the last decade, retail rules in this country have changed dramatically,” he said. “The merchant needs to provide goods at lower and lower margins because there is so much competition.” To him, Ontario Mills represents “the next generation of regional mall, where a merchant can penetrate a market with one store.”

Other retail observers agree. “The time is right,” said Kurt Barnard, publisher of the Retail Marketing Report newsletter in New York. “Particularly in this difficult retail environment, (an off-price mall) is likely to do better than conventional malls.”

Jack Illes, leasing representative for Hahn Co., a San Diego development firm, said that “the whole concept of doing outlet (retailing) in Southern California is a good one.” With Ikea’s success in Potomac Mills and other Eastern locations, he added, “those guys should definitely come out here.”