Huge Mission Viejo Mall Expansion Is Confirmed : Retail: Shopping center owner says it hopes to add a fourth department store in $110-million renovation.
Betting on the vast commercial potential of South County, one of the nation’s largest shopping-center developers confirmed plans Monday for a mammoth expansion of the Mission Viejo Mall.
Despite the pall that hangs over the retail industry, Edward J. DeBartolo Corp., which owns the mall, said it will move forward with a $110-million renovation that will add a fourth major department store to the 13-year-old retail complex.
The project may get a $6-million boost from the city. The City Council is to decide tonight whether to spend redevelopment funds to pay for a parking structure and street improvements on the 68-acre mall property.
DeBartolo officials confirmed that they are talking with representatives of Nordstrom, one of the anchor stores at Costa Mesa’s upscale South Coast Plaza.
“If this expansion goes through, this will be the South Coast Plaza of South County,” said Robert D. Breton, a Mission Viejo councilman. “It will be used by everyone south of Irvine.”
Company officials said they are also talking with other department stores and are in the process of solidifying agreements with the 134-store mall’s three major tenants--Robinson’s, Bullock’s and Montgomery Ward--to keep them there. Company and city officials also confirmed plans to add 450,000 square feet to the shopping complex, redesign the mall entrance and add a parking structure for about 2,500 vehicles.
DeBartolo executives feel strongly enough about the project to suggest that, even if a fourth department store doesn’t come on board, the expansion will proceed.
“All of our studies show that, candidly speaking, (South County) is a great place for us to invest our money,” said Rick Sokolov, senior vice president of the development company. “Right now, we’re trying to refine our budgets and refine our designs. We’re still committed to the project even if we are unsuccessful in attracting a major department store. The key thing that’s going on is finalizing a program as to department store sizes and locations.”
DeBartolo, based in Youngstown, Ohio, owns or manages 77 shopping centers across the nation. The company said it approached Mission Viejo officials last year to ask if redevelopment funds might be used to help pay for a renovation.
City officials say the Mission Viejo Mall has been an underachiever, attracting less business than the nearby Laguna Hills Mall, which has about 80 stores. In 1990, Mission Viejo Mall had taxable retail sales of $148.5 million, compared with $150.2 million for the Laguna Hills Mall. South Coast Plaza had sales that year of $692.3 million.
The Laguna Hills and Mission Viejo shopping centers are competing for Nordstrom’s business. Last month, New York-based O’Connor Group, which owns the Laguna Hills Mall, announced plans for a major expansion of the mall and revealed that it, too, is in discussions with Nordstrom.
Peter Nordstrom, Orange County regional manager for the department store company, would not say which mall the company favors. He did say that a new store could very well be built in South County, although he described the negotiations to date as “very preliminary.”
“It’s a definite option for us down the road,” he said. “We feel pretty good about South County. We certainly do a lot of business from people in the area who come to our South Coast Plaza store.”
The winning mall will claim a large prize that will pay off for years to come, real estate agents said.
“Landing Nordstrom would loom very large,” said Joyce Gothard, a commercial sales representative for Remax South County Realtors in Mission Viejo. “Having Nordstrom is a big reason why people go to South Coast Plaza instead of Mission Viejo or anywhere else. It’s a big drawing card.”
Susan Withrow, a Mission Viejo councilwoman, said the two malls “have been wooing Nordstrom” for months. “They’re a huge draw--the best anchor store around. Whoever gets them will definitely be able to throw their weight around South County.”
City officials say that money spent on the mall expansion will come back to them in the form of increased sales tax revenue.
“I’m not saying that $6 million is a little bit of money,” Councilman Breton said, “but it is in comparison to the tens of millions that could come into our city treasury if the mall is expanded.”
Gothard characterized the expansion plan as a sound move despite the recession, which has dampened retail sales.
“It takes a certain amount of daring to invest right now, but you need to be forward-looking,” she said. “By the time they finish a project of this size, you have to believe that business will have improved.
“Sales will pick up (in South County) before other places,” she said. “This is the place to invest.”
