A Riverside development firm has entered into an agreement to buy the La Jolla Village Square shopping center and is negotiating to buy an adjacent nine-acre parcel to double the center's size.
The buyer, T&S; Development Inc., would pay more than $35 million for both the center, owned by May Department Stores of St. Louis, and the adjacent parcel, owned by residential developer Brehm Communities, sources close to the transaction said.
T&S; president Richard Rollnick said the sale is contingent on T&S; receiving planning approvals for the expansion. Brehm's nine-acre parcel, directly south of the mall, is currently zoned for a planned residential development.
A spokeswoman for May confirmed Tuesday that a deal had been made to sell the 362,420-square-foot, 48-store mall to T&S; but emphasized the conditional nature of the agreement.
"There are some contingencies to be solved, so that makes the contractual arrangement not final," May's Maureen McDaniel said.
Because of the contingencies, Rollnick said, the sale probably will not close until mid-1989.
If the sale is completed, T&S; would expand the mall to between 750,000 square feet and 900,000 square feet and change its market focus to a higher priced "fashion mall" along the lines of South Coast Plaza in Costa Mesa, Rollnick said.
"The occupancy is good at La Jolla Village," Rollnick said. "But the center lacks the critical mass to demand the kind of traffic that's necessary for a highly successful fashion mall. That's what we intend to add." The addition planned by T&S; will cost at least $80 million, he said.
Open since 1979 and anchored by May Co. and Bullock's department stores, La Jolla Village Square has been known to be having shopper traffic problems for some time and to be generally losing out in competition with neighboring University Towne Centre, a mall two miles to the east on La Jolla Village Drive. Sources said May has been shopping the property for at least two years.
May's McDaniel denied the mall was in trouble and said it is May's practice to "buy and sell properties on a regular basis." May Department Stores owns all or part of 28 shopping centers throughout the country, including the Mission Valley Center in San Diego, North County Fair in Escondido and Plaza Camino Real in Carlsbad, she said.
Rollnick said May selected T&S; as the buyer among other bidders for La Jolla Village Square because T&S;'s expansion plans "would bring additional vitality to the mall," an important consideration because there is a May Co. department store in the center. May owns May Co., Lord & Taylor, J.W. Robinson and several other department store and specialty retail chains.
A developer specializing in retail centers, T&S; owns or operates more than 1 million square feet of retail space. Its biggest project to date is Canyon Springs, a 900-acre development under construction in Marino Valley that includes hotel, office and retail buildings.
T&S; recently announced a joint venture with shopping center developer Edward J. DeBartolo of Youngstown, Ohio, to build a 1.6-million-square-foot regional mall in Riverside near the interchange of Interstates 60 and 215.