Birtcher Plans Massive Home Furnishing Park
By MATHEW PADILLA
Laguna Niguel-based Birtcher Development LLC plans to build a 340,000-square-foot campus for home furnishings companies and their showrooms, potentially turning Costa Mesa into a big draw for home remodeling lovers.
The project is planned for 20.5 acres of land on Hyland Avenue and South Coast Drive facing the San Diego (I-405) Freeway, down the street from Ikea’s store that opened in Costa Mesa last year.
Plans call for up to 14 buildings ranging from 9,000 to 60,000 square feet, according to Shannon Hondl, vice president of development with Birtcher. The company is seeking tenants.
Birtcher is buying the land for the project from Bloomington, Ill.-based State Farm Insurance Cos., which plans to close a regional office and automobile claim center at the site by June.
State Farm said in 2002 it planned to close the Costa Mesa facility as part of a consolidation. Policyholders have driven their cars to Costa Mesa to have them assessed for repairs, State Farm spokesman Scott Smith said. The insurer also does underwriting, training and other functions in Costa Mesa, he said.
The Costa Mesa site employs about 200 people and had as many as 500 workers at its peak, according to Smith. Some workers are moving to State Farm’s Irvine office, he said. In other cases, jobs are shifting to regional operation centers in Bakersfield and Rhonert Park in Northern California.
Birtcher plans to demolish State’s Farm’s 330,000-square-foot building on the property this summer. The home furnishings campus is set for completion in fall 2005.
Brandon Birtcher, the company’s president, said escrow should close on the land by this summer after permits are obtained from the city. Birtcher officials declined to disclose the sale price.
The campus is set to be called South Coast Home Furnishings Centre.
The proximity to Ikea is a big asset, sources said. But Birtcher officials said they are targeting older buyers with deeper pockets than those who shop at Ikea.
“There is an existing base of home furnishings tenants in Santa Ana, Costa Mesa and Fountain Valley,” Bran-don Birtcher said. “Our intent is to consolidate these tenants.”
Brandon Birtcher said he has experience with home furnishings centers, having done leasing for West Hollywood’s million-square-foot Pacific Design Center during college and later managing centers in Phoenix and Dallas.
“It is a product I have a passion for,” he said.
“Those guys know what they are doing,” said Rob Socci of Voit Commercial Brokerage. “The location is irreplaceable.”
Birtcher plans to target consumers directly with the home furnishings campus, rather than just the interior designers who shop the company’s Laguna Niguel wholesale center, according to Hondl.
The home remodeling industry has boomed in the past two years as homeowners refinanced their mortgages, taking out cash and using it to upgrade everything from floors to kitchen cabinets.
But the refinancing wave came crashing down late last year after mortgage rates hit bottom in June and started moving upward. Rates dipped down last month, but many expect them to slowly rise this year.
Ken Gould is one of a team of brokers in the Newport Beach office of Lee & Associates Commercial Real Estate Services Inc. that is handling the leasing of Birtcher’s planned project. Other brokers are Jim Snyder, Andy Walburger and Mike Abel.
The cooling in refinancing surely will impact the home furnishings industry, but those stores with the best locations should do well, according to Gould.
“We are going to have a good lineup of anchors and smaller users,” Gould said. “The economy goes through cycles, but stronger names always survive.”
