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OC’s largest malls saw slower sales growth in 2000



Malls’ Sales Growth Slows; South Coast Plaza Hits $1B

Sluggish retail sales fueled by consumer uncertainty and a slow economy first appeared in 2000, with Orange County’s largest shopping centers seeing a 7% growth in taxable sales for the year,a two percentage point drop from 1999.

OC’s top 25 centers together counted $5.4 billion in taxable sales last year. That’s according to this week’s Business Journal list, which is compiled using city and company figures. Sales figures for No. 8 Laguna Hills Mall are estimates.

Overall, OC’s shopping centers had a good year, with 17 of the 25 on the list posting growth.

Mall operators are being cautiously optimistic moving into the third quarter, but most say sales aren’t keeping pace with last year,a statewide trend.

In California, retail sales grew by 2.5% in the first quarter, well below the 15% surge a year earlier. State economists anticipate retail sales growth to come in at an even slower pace for the second quarter and turn negative in the second half of 2001.

Last year, however, shopping centers, particularly those on the high-end and with discount retailers, held their own.

Total space available on this year’s list was about 19.9 million square feet,a 2% drop from 1999,largely attributed to Huntington Beach Mall, which will begin a massive reconstruction by year’s end. The site had about 336,000 square feet to lease in 2000,60% less than 1999.

This year’s list also turned into a horse race, with several players ousting others from last year’s spots.

South Coast Plaza, which is owned by C.J. Segerstrom & Sons, held the lead at No. 1, far outpacing the pack with $1 billion in sales, a 5% increase from 1999. The center opened 20 additional stores in 2000, with several new retail boutiques opening in 2001, including Giorgio Armani and Yves Delorme.

No. 2 Fashion Island was a distant second, with $520 million in sales in 2000, a 6% increase from 1999. The center added 10 stores during the year and has at least five more planned for 2001, including Kenneth Cole and Nike Goddess. There is also a 36,000-square-foot expansion scheduled to open in spring 2002, but tenants for that space have not been announced. In addition, Fashion Island recently announced that Neiman Marcus will expand its store there by 33,000 square feet by 2003.

The Market Place Tustin/Irvine jumped to No. 3, posting a 19% increase in sales in 2000 to $442 million, double its sales of three years before. The center added 31 stores last year, including a food court and restaurants such as Romano’s Macaroni Grill and BD’s Mongolian Barbeque. It plans to add 11 more tenants to its third phase by 2002.

General manager Karol Reedy said the Market Place saw sales decrease slightly in the first quarter, with phase one being most affected. But she said things have picked up again in the current quarter.

“We still anticipate finishing the year (2001) with greater than a 5% increase,” Reedy said. “We think we’ve seen the worst of it. We’re cautiously optimistic.”

She also said that shopping centers with discount retail stores generally tend do well when the economy slows. For instance, Reedy said Market Place tenants such as Loehmann’s, T.J. Maxx and Target are all going strong.

The Market Place bumped to No. 4 the Brea Mall, which reported about $400 million in sales,a 1% increase from 1999.

In the meantime, The Shops at Mission Viejo, which muscled its way to No. 5, showed the most impressive growth. It reported about $290 million in sales,a 72% increase from last year. The recently renovated shopping center opened a few more retail stores in 2000, but the growth was mainly fueled by a new 50,000-square-foot food court and two restaurants,P.F. Chang’s China Bistro and the California Caf & #233; Bar & Grill.

Judy Bullockas, the Shops’ director of marketing, said the center expects to see double-digit growth this year as well, despite the sluggish economy. The center also is working with South County hotels like the Ritz-Carlton and Laguna Cliffs Marriott to bring visitors to the center.

The Shops pushed MainPlace/Santa Ana to No.6. That center, which reported about $281 million in sales in 2000 vs. $284 million in 1999, has seen competition from newer centers such as the Market Place and The Block at Orange.

Last year, an independent owner, Todd Blood, took over MainPlace’s six-screen cinema after AMC Entertainment Inc. decided to pull out. The cinema has faced fierce competition from nearby megaplexes, including AMC’s 30-screen theater at the Block at Orange. However, the mall announced a few new tenants in the past year, including J. Jill-The Store, Vans, Teddy Crafters, The Children’s Place, Anchor Blue (previously Miller’s Outpost) and Anchor Blue Kids, which will open soon.

Main Place focuses a lot of attention on drawing tourists, and hopes to lure more with the opening of the new California State Welcome Center, scheduled for November.

No. 7 Westminster Mall, which reported a 3% increase in sales in 2000, has expansion plans on tap. The center will build a retail store for Macy’s, which will become the mall’s fourth anchor tenant in fall 2002, and open at least seven new stores this year. Some include Hot Topic and Spankie’s Italian Caf & #233;.

Besides Main Place and Huntington Beach Mall, there were three other shopping centers that saw decreases in taxable sales. Westminster Center’s sales were down 9% and Mission Viejo Freeway Center saw a 2% reduction. Buena Park Mall was also hit, reporting sales of $69.2 million amid renovation work, vs. $74 million for 1999.

But Buena Park Mall is expected to get a boost once its renovation is complete. Festival Management Co., which took over the mall in 1997, completed a $45 million first phase last year, and a $30 million second phase is under way. Dubbed “The District,” the project is set to encompass about 140,000 square feet of retail, entertainment and dining space around an outdoor plaza. Redondo Beach-based Krikorian Premiere Theatres LLC has signed on as the anchor and plans to build a 14- to 16-screen theater complex.

Eleven other shopping centers reported gains, including Brea Union Plaza, which had sales increase 22%, and the Irvine Spectrum Center, which saw a 15% jump. The Spectrum is neck-deep in construction of its third phase (someday there will be a fourth), which will add about 200,000 square feet to the center. The new section, which will include a carousel and Ferris wheel in addition to the stores, will start opening this summer and continue into 2001. n

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