untington Beach’s Bella Terra has spent much of this decade transforming itself in what has been Orange County’s most dramatic mall makeover: a $170 million replacement of a 1970s-era relic with a sprawling Italian-themed center.
Now comes the hard part: crafting a brand image for the mall that’s part upscale Fashion Island, part casual Surf City.
The task falls to branding expert Linda Berman, who said she’s working to develop a “story” for Bella Terra. Not a contrived story, she said, but an authentic “outside-in” tale that will shape Bella Terra’s approach to leasing and marketing.
After years of hard hats and construction, Berman’s work is nuance, the soft and mushy side of retailing.
“It’s more subtle, a bit more difficult to grasp,” she said.
Bella Terra’s owner, San Jose-based DJM Capital Partners Inc. is a believer.
“Huntington Beach is a unique community that wants to distinguish itself in Orange County,” said Lindsay Parton, partner and head of DJM’s newly formed development group.
Bella Terra needs a story as it looks to the next phase of its running makeover.
DJM is looking to add offices, homes and more neighborhood shops to the mall. Plans call for 500 homes,apartments, condominiums and townhomes,plus as many as five parking structures on a 23 acres of adjacent land.
Bella Terra, which reopened in 2006, has yearly sales of about $255 million. The mall is nearly full, compared to three years ago when it counted only about 10 stores.
It has to distinguish itself, according to Berman, who’s serving as a consultant to DJM. Bella Terra can’t be an Irvine Spectrum Center or a Fashion Island, she said.
There are plenty of shoppers to be had in the mall’s backyard, Berman said. That is, if Bella Terra can lure Huntington Beach residents,some of whom are unaware of Bella Terra,away from Fashion Island, South Coast Plaza and other rivals.
“We have to get it right,” said Berman, who’s done work for Walt Disney Co., Nike Inc. and The Grove in Los Angeles.
The second phase of Bella Terra, dubbed Bella Terra II, is the first ground-up project for DJM. The company, which also owns La Habra Marketplace, considers Bella Terra its signature property, DJM’s Parton said.
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Rendering of Bella Terra II: some 500 homes part of project |
Plans for the second phase are moving ahead despite a slow housing market and a pullback in projects by other developers.
The city, which encouraged the mall’s makeover, has been working with DJM to get Bella Terra II under way. Paul Da Veiga, a project manager for Huntington Beach, said the city would like to see more mixed uses like DJM is proposing.
“The city has been responsive and attentive to us,” Parton said.
Design and the environmental review are happening simultaneously.
Bella Terra II, expected to be finished in two to three years, calls for a large grocery store,Whole Foods, Gelson’s or something similar,as well as a consumer electronics store, a home furnishings store, a wine bar, cheese shop and bakery, Berman said.
Selling consumers and businesses on a mall that mixes upscale shops, homes and stores geared toward residents could
be a challenge. All the
while, Berman is looking to capture the flavor of Huntington Beach.
The city’s known for its laid-back, surfing and skateboarding culture. It’s also a city that wants to keep its charm.
If the story of Bella Terra is crafted to fit what already exists in Huntington Beach, it can help in the leasing and marketing of Bella Terra, according to Berman.
The Grove, by Caruso Affiliated, headed by Rick Caruso, is a prime example of a branded mall, she said. It has a dedicated budget for holiday events and year-round entertainment as well as a mix of upscale stores and classic Los Angeles brands.
“For Caruso, brand was terribly important,” Berman said.
Closer to Bella Terra, South Coast Plaza arguably is the best branded shopping center. The Costa Mesa center has crafted an image of exclusivity by hosting events, shuttling guests from upscale hotels, putting out its own catalog and landing stores that can’t be found elsewhere in Orange County or, in some cases, anywhere else on the West Coast.
Branding doesn’t replace a mall’s marketing department, Berman said. It arms marketing people with information on how best to promote the mall, she said.
“Most real estate developers don’t see a person like me as part of the process,” she said.
Malls,no matter where they are,tend to inherit their owners’ identity, such as those owned by Indianapolis-based Simon Property Group Inc. and Australia’s Westfield Group.
Bella Terra wants to distinguish itself.
“It’s about keeping it real, keeping it local,capturing the spirit,” Berman said. “That’s a taller order.”
In 2005, DJM bought the mall from J.H. Snyder Co. for $224 million. Last year, it bought the land for phase two, where a boarded up Montgomery Wards building now sits.
Phase two is aiming to be a richer extension of phase one,a casual, outdoor California lifestyle in a resort-like setting.
It will be more natural in terms of landscaping and feature a 1-acre park. Plans call for a concierge service that helps residents with things such as booking travel, Berman said.
DJM also bought the nearby One Pacific Plaza, a 9-acre property that has been renamed the Towers at Bella Terra. There is a 193,000-square-foot, 12-story office tower, two mid-rise towers totaling 189,000 square feet, a Buca di Peppo restaurant and a 24 Hour Fitness gym.
The developer is in it for the long haul, according to Parton.
“We’re really not sellers,” he said.
DJM saw the underachieving Bella Terra as an opportunity, despite frustrations previous owners had in trying to rejuvenate the mall.
Bella Terra, which started out in 1967 as an indoor mall named the Huntington Beach Shopping Center, was a has-been by the 1990s. It sat largely ignored.
In 1996, Santa Monica-based Macerich Co. bought the mall, took off the roof and planned to spend $60 million to renovate it, using Metro Pointe in Costa Mesa as a model. The 1998 reopening never happened.
Macerich sold the mall to Ezralow Retail Properties LLC in 1999 for $48 million. Ezralow brought on J.H. Snyder, which made more headway, attracting Kohl’s, renaming it Bella Terra and going with the Tuscan village theme.
Ezralow and J.H. Snyder had difficulties buying Montgomery Ward’s site, which Sears Roebuck & Co. owned. After DJM bought the mall, it had better leverage to buy out the site,since it held a significant stake in Huntington Beach. It owns and runs 800,000 square feet in the city.
DJM has been able to attract key retailers, such as the Cheesecake Factory and Huntington Surf & Sport.
The Cheesecake Factory was a coup,the prior owners weren’t successful in getting the restaurant to come to Bella Terra, Parton said.
DJM pitched its branding concept to Cheesecake Factory.
“They really got it,” he said. “It’s storytelling. We’re really good at being passionate.”
Huntington Surf & Sport also got the idea of being Huntington Beach-centric. Its connection to local shoppers is what pushed DJM to court the store.
DJM opted for Huntington Surf & Sport instead of national surfwear king PacSun. Pacific Sunwear of California Inc., though based in Anaheim, wasn’t ideal because its stores are in just about every mall, he said.
Huntington Surf & Sport is what Surf City is about, Parton said.
Bill Sharp, Huntington Surf & Sport store manager, said business at Bella Terra has been sporadic but he has seen improvement.
Residents are now coming to Bella Terra to eat and see a movie, he said.
Some of the eateries at Bella Terra: Pinkberry, Johnny Rockets, Rocky Mountain Chocolate Factory, The Cravery, California Pizza Kitchen, Corner Bakery and Daphne’s Greek Cafe.
Bella Terra is looking for young, growing companies, similar to No Rest For Bridget, a women’s clothing boutique that opened at Bella Terra in April.
No Rest For Bridget has one other store on 17th Street in Costa Mesa. Owner Mas Hayakawa looked everywhere for a second store, from south of Los Angeles to Dana Point and Laguna Beach.
Hayakawa chose Bella Terra because many of its Costa Mesa store’s customers were from Huntington Beach, he said.
Justice, a shop for tweens (ages 7 to 14), is one of the best performing stores at the mall, said Patricia Apel, general manager of Bella Terra. And it is New Albany, Ohio-based Tween Brands Inc.’s highest performing store, according to spokesman Robert Atkinson.
Some tenants would like to see a few more anchor stores to draw in traffic, Huntington Surf & Sport’s Sharp said.
“The key to any business is to get the right tenant mix,” he said.
