A string of vacant, crumbling retail buildings on Mariner’s Mile could eventually be redeveloped into an upscale day spa, jeweler and shopping center.
Two separate buyers finalized deals to buy the troubled property this week from developer Mariners Mile Gateway LLC for undisclosed sums, said Scott Hook, a vice president for Newport Beach real estate firm Marcus & Millichap.
Both buyers plan to clean up and rebuild the area, Hook said.
Real estate investor Eva Watson bought the first six lots of the property off Dover Drive and has plans to develop them into a day spa, jeweler or some other upscale retail space, said Albert Hanna, of the ALT Financial Network, which represented Watson in the sale.
“It’s going to be the most beautiful building in Newport Beach,” Hanna said. “We’ll call it the jewel of Newport once they fix it up.”
Local businessman Russell Fluter bought the remaining 11 lots that stretch along West Coast Highway, said Hook, who represented Fluter and Mariners Mile Gateway in the sale.
“The long-term plans are to develop a new shopping center, but the exact time frame or timing of the construction will depend on the retail market and interests from tenants,” Hook said.
Fluter already owns a shopping center at Bayside Drive and Pacific Coast Highway.
Hook’s firm had been trying to attract buyers to the 111,000-square-foot parcel since June — a task made challenging in a chilly credit market.
“Lenders had turned off the valves in 2009 for a property that potentially could have sold for $10 million,” Hook said. “For vacant land with dilapidated buildings on it, there really wasn’t any interest from the lenders.”
The lots were split up in hopes of attracting more potential buyers, Hook said, adding that the city sued in Orange County Superior Court in February to force the previous owner to clean up the property after hearing numerous resident complaints about graffiti and broken windows.
A settlement with the two buyers of the land calls for a cleanup and landscaping of the property within 60 days after the close of escrow. The city also will receive $10,000 to cover staff costs and attorneys fees amassed while trying to force the owners to clean up the area.
Mariners Mile Gateway had not been able to improve the property because of a legal battle over what was to be an upscale shopping center on the site, Doug Beiswenger, a partner in the firm, told the Daily Pilot earlier this year.
The developer acquired the property in 2004 with the intention of building Bel Mare, a 56,000-square-foot shopping center with a Mediterranean theme.
Rite Aid was to be the anchor tenant, but Mariners Mile Gateway was unable to secure the necessary California Department of Transportation approvals to develop the center as planned.
The drug store chain sued Mariners Mile Gateway for $30 million, alleging the developer did not have the right to terminate its lease after Caltrans would not grant the proper approvals.
Rite Aid obtained a court order that halted any development on the property, leaving the rundown buildings there to further deteriorate.
Since then, the empty storefronts have attracted graffiti artists and transients.
Rite Aid’s lawsuit was dismissed and the injunction was lifted in September 2008, when a judge ruled that Mariners Mile Gateway had the right to terminate the pharmacy’s lease.