Santa Ana-based Red Mountain Retail Group has bought an empty 10-acre former Kmart site in Buena Park and signed up its first tenant.
The 130,000-square-foot center is set to be fixed up and reopened in the middle of next year, said Eric Nelson, director of entitlement for Red Mountain.
Henry’s Farmers Markets, part of Boulder, Colo.-based Wild Oats Markets Inc., plans to open a specialty grocery store at the center, he said.
Red Mountain also hopes to lure an electronics store and clothing shops, Nelson said, and is seeking national restaurants and a coffeehouse.
“This is just a site poised and ready for redevelopment,” Nelson said.
Red Mountain, a retail investor and redeveloper, bought the vacant shopping center at Lincoln and Valley View avenues from a trust company for $12 million. Dan Samulski and Mark Baziak of Grubb & Ellis Co. in Newport Beach represented Red Mountain.
The center is at a busy intersection with a Home Depot store nearby. Cypress College is up the street.
On the site now is 110,000 square feet of vacant buildings including the former Kmart store, which has been empty for more than a year. A Penske Auto Center and a furniture store closed in recent months.
The building shells are in good shape, Nelson said, but “the architecture leaves a lot to be desired.”
Red Mountain plans to redesign the buildings, he said.
Buena Park has been easy to work with, Nelson said. His job is to work with the cities to secure approvals for projects.
“We have never lost a city process,” he said.
Sometimes Red Mountain has had to win on appeal, though.
“City ordinances are very hard to meet,” he said. “But we have a vision with our projects. We get the neighborhood involved. Anyone can get the mayor or councilman behind you. But if you don’t have the neighborhood, you don’t stand a chance.”
Red Mountain’s home city of Santa Ana is one of the most difficult to deal with, Nelson said. The city recently approved Red Mountain’s development of a Starbucks Coffee.
Much of Red Mountain’s California property is in the northern part of the state. Red Mountain also has buildings in several other states including Arizona, Illinois, Kansas, Montana, North Carolina and Utah. Most of its holdings are in Phoenix, where it has 25 shopping centers.
Mike Mugel founded Red Mountain about 12 years ago. He’s the chief decision maker and dealmaker, Nelson said. Red Mountain employs about 68 people and has grown in recent years, he said.
When Nelson started with the company in 1995, he said he was the fifth employee.
Red Mountain’s other OC projects include one in Fountain Valley, where it plans to tear down a vacant Kmart and replace it with a hardware store. It’s also redoing the El Toro Square shopping center in Lake Forest.
Red Mountain also is an investor in Los Angeles-based Allied Retail Partners LLC’s so-called “Mariner’s Mile” redevelopment project on Pacific Coast Highway in Newport Beach. Plans call for razing and redoing nearly three acres next to the Balboa Bay Club & Resort.
The company generally doesn’t redevelop to sell, he said. But sometimes the company will get an offer it can’t refuse, he said.
