After five years of countless community meetings, frequent political maneuvering and a few legal disputes, Shaheen Sadeghi can breathe a sigh of relief—and go back to being a developer.
The LAB Holding LLC founder and CEO spent a good chunk of the past few years working to entitle a number of projects both in and out of Orange County, and is now ready to turn dirt.
“Now we get to do the fun part, as opposed to the political part,” said the retail-focused developer—whose last big area project, the Anaheim Packing House, helped reinvigorate that city’s downtown.
LAB projects now moving ahead range from retail, restaurant and hotel redevelopments in Garden Grove to mixed-use sites in Corona, San Marcos and Long Beach to nearly 70,000 square feet of retail and food options at Costa Mesa’s massive mixed-use development, The Press.
A multiyear entitlement process for many of these sites, coming amid a rapid rate of industry change and cultural shifts, often threatens to age projects before they even get delivered to market, he said.
“California is not a very user-friendly place for entitlements. The challenge we quite honestly have is most of these codes were written back in the ’70s and ’80s—and here we are with iPhones, and the world has changed.
“Our entitlement process is challenging,” Sadeghi said. “We’re interested in building for the future, not what’s done in the past.”
Corona, LBC, Garden Grove
Sadeghi, who studied fashion design and merchandising at Pratt Institute in Brooklyn before becoming vice president of Gotcha Sportswear Inc. and later president at Quiksilver Inc., is juggling plenty.
He paid $1.8 million in 2018 for the 17-building Corona Mall and another $6 million for 5.6 acres of parking lots in Corona.
Work on the south side of the mall is expected to begin shortly and should be completed in about a year.
Phase one of the BEAT project in North Long Beach—in which LAB Holding is helping turn 52 lots into a mixed-use center—is expected to be completed within the next 12 months.
The first phase of the Cottage Industries project in Garden Grove—which will repurpose Craftsman-style homes into non-residential uses—is also expected to be completed within a year.
In its hometown of Costa Mesa, the developer’s portion of The Press project near the city’s Ikea was recently given the go-ahead. At 70,000 square feet, Sadeghi’s portion of The Press—likely to hold 40 or so food spots, microbreweries, bars and other tenants—is about 30,000 square feet larger than the Anaheim Packing House, OC’s best-known food hall.
“We have 34 cities in the county and every city is looking and starting to recognize how important it is to brand their city culturally and, also, building neighborhoods is back and fashionable again,” he said. We’re less and less reliant on transportation. The fact that we don’t have a really advanced public transportation system in the county puts pressure to do things in our neighborhoods.”
Digital vs IRL
But how to make the neighborhood relevant and competitive with everything happening on Instagram, Snapchat and the rest of the digital world without following a template or getting homogenized—a concept Sadeghi is allergic to—is the trick.
“Today, everybody’s cool,” Sadeghi said. “And I jokingly say if you’re not cool, you can just Google it and you can become cool.”
Of course, if it was that easy, the fortress-like malls of decades past would have remade themselves cool a few years ago. So what purpose does Sadeghi think malls serve, and is there even a place for them anymore? He would tell you location holds the answer.
“But the other thing is there’s not enough retailers out there to fill the malls,” he pointed out.
“The department store segment has shrunk and will continue to shrink because the concept is obsolete.”
In some cases, landlords have become retailers, something Sadeghi is also well versed in as the owner of the SEED Peoples Market multi-brand store at The Camp project in Costa Mesa.
The boutique maintains a mix of apparel and accessory lines focused on sustainability or local businesses. It took home a win earlier this year from the Outdoor Retailer Innovation Awards. The motto for the store is “products with a purpose,” Sadeghi notes.
Outdoor Retailer Senior Vice President and Show Director Marisa Nicholson said SEED helps cultivate community. That’s key, Sadeghi would say, regardless of whether the conversation is around a store or a mall.
“People today are their own brands,” Sadeghi said.
Brands have to sell a belief, community and culture and not just a logo or identity, he added.
“That’s what happened to the surf industry here,” Sadeghi said. “They forgot to make good products and invest in innovation. Every brand looked exactly the same and eventually lost their identity.”
“Through Instagram and technology, everybody’s their own brand so you don’t necessarily have to have somebody else’s brand on your shirt. The malls never figured out the fact that people are looking for small hand crafters and makers,” he said.
“People today are less about consumption and more about connection.”
Blueprints
The Lab, structured around the concept of being the “anti-mall” is now 27 years old. The Camp, the first green retail concept in the country and on the other side of Bristol Street, is now 18.
Sadeghi said both centers did well during the past holiday selling season and continue to see growth. The merchant mix remains of the specialty nature. The exception is Urban Outfitters, though Sadeghi pointed out was a $55 million company when he brought them to The Lab. Parent Urban Outfitters Inc. of Philadelphia reported last month its namesake division ended the 12 months through Jan. 31 with $1.5 billion in net sales.
Dayna Mance, owner of specialty retailer Prism Boutique, worked at The Lab’s Urban Outfitters as its women’s manager in 2004 and 2005.
“I spent a lot of time in the center and have come back many times over the years to eat, drink, shop,” she said. “When I was looking for a location for Prism to expand into OC, I was drawn to the unique indoor/outdoor experience and the curated group of restaurants, shops and places to sit and relax.
“There is nothing like The Lab and The Camp in OC,” Mance said. “They feel unique and special. You’d have to drive to L.A. for a similar experience. It was the perfect fit for Prism.”
Mance started her retail concept in Long Beach, expanding to Costa Mesa in 2018. Like The Lab, Prism offers a highly edited experience: hand-crafted fixtures by Lorem outfitting the store, lots of natural light and an assortment that includes apparel, accessories and home.
“In the past, you drove to a McDonald’s and they chucked the hamburger at you,” Sadeghi said. “Today, [people ask] ‘Is the bun gluten free? Is your beef grass fed? Is the tomato organic?’ And then it’s, ‘OK, I’d like to meet the chef’ and then, by the way, they take a picture. Then they will pay $16 for it as opposed to the $1 McDonald’s burger.”
“We’re trying to build all of that into our business model and financial model. How do you build culture onto your balance sheet?”
Retail is now scrambling to keep pace with a changed consumer that, in the past, often found comfort with the homogeneity of big brands across the restaurant and fashion landscape.
“Today, I think this is probably the biggest cultural shift I’m going to see in my lifetime,” Sadeghi said.
“Every CEO of every national food chain is behind closed doors trying to figure out what’s the next thing because no one’s excited about an Applebee’s opening up next to them.
“Now, if I go to Austin, Texas, I want to try some badass Texas barbecue. I don’t want to go to The Cheesecake Factory.
“Every region is starting to celebrate their own and through that process, crafting is back in America. Micro-manufacturing is going to take over mass manufacturing.
“My generation drank beer; this generation wants to know how to make the beer and have the conversation with the brew master, and then drink it.” That’s the difference.”
Sadeghi On ….
Whether the Olympics could be a boon for OC’s action sports industry?
“I don’t see it. Look, every one of those sports [skateboarding, surfing] are growing. I don’t [think] people [will] stop surfing, but I think what happened was the connection of the brands. I won’t mention them. I ran the two largest ones, but they basically took the culture and they just commercialized the hell out of it and so they’re at every airport and every chain of distribution. The next thing I know, they’re making cellphone covers and all of this junk with their logos on it. The reality is the only thing you need to surf is a boardshort and a board.”
Whether luxury brands have a place in LAB’s centers?
“If it’s street luxury, I think they would fit. Like let’s say Supreme. I don’t see Supreme opening in a mall. [Founder] James Jebbia does not do that. However, European luxury brands today are all what I call airport brands. Visible at every airport globally which in my mind lost their cool. I am trying to deliver products that are not too expensive but cultural cool. Style has never been about price.”
Is he having talks about bringing high-end streetwear brands to LAB projects?
“We honestly haven’t. I would probably build a separate project for those types of brands, but it doesn’t fit into The Camp and it doesn’t fit into The Lab.”
Venturing into the L.A. market.
“I love the L.A. market. We get too busy with Orange County, but I’d love to do something in L.A. I think the only thing I’m sensitive about is [that] L.A. tends to be really trendy, where people move around from one place to another, so very few places have lasted…I want to build neighborhood places that last for a long time.”
