Expect to see far more office space and apartments than stores and restaurants at the site of the Five Lagunas shopping mall, if the latest plan for the closely watched, 68-acre property moves ahead.
Don’t expect an immediate kick-off to the redevelopment project that’s now six years in the making, though.
“We’re just putting it out there to get feedback,” said Dennis Borowsky, vice president for San Diego-based Merlone Geier, which owns the property, speaking on the new plans.
Last Wednesday, the developer unveiled its latest vision for the site at the intersection of the Santa Ana (5) Freeway and El Toro Road.
The idea is to build a 2,100-unit apartment complex with 3,780 parking stalls, a total of 248,000 square feet of retail space including a movie theater, a 125-room boutique hotel and 822,000 square feet of office space across four buildings.
Five Lagunas, previously called Laguna Hills Mall, held about 850,000 square feet of retail space when Merlone Geier bought it in 2013 for a reported $110 million.
It’s now a fraction of that size, with several large portions of the mall either demolished or shuttered the past few years.
The developer’s in the early stages of seeking local feedback for its latest plan, which was announced at a community event, and then “within the next 45 to 60 days we’re going to be submitting a formal application with the city,” Borowsky told the Business Journal.
If the plans are approved following its proposal to the city in June, construction would start in about two years, according to the company.
Rental Push
The main point of tension among those in attendance at last week’s unveiling was the decision to nearly double the number of apartment units compared to a plan that never moved ahead.
While Borowsky said it hopes to have the updated plan approved, it may have to scale back on the units following the results of an environmental impact report.
“There’s going to be environmental factors—traffic being the biggest issue. The more units, the more bodies, the more cars, but we know what was approved before,” he said.
Merlone Geier’s latest plan echoes some of the redevelopment ideas being considered for other area shopping centers, such as Santa Ana’s MainPlace mall, whose owners are looking to add a bevy of apartments and office space to the exterior of that center.
Oakbrook Village, a shopping center just south of Five Lagunas, added a 289-unit apartment complex of its own—called Reata, it was built by Shea Properties of Aliso Viejo —a few years ago.
Borowsky said his company is evaluating the types of office tenants it could bring in to the mixed-use redevelopment, but hinted that it would consider medical offices, which could complement next-door Saddleback Hospital and other healthcare facilities nearby, as well as general office tenants.
There are also plans to add a nearly 3-acre park to potentially include an amphitheater, water features, fire pits and a dog park.
Existing retail tenants at the property appear poised to stay for the near term.
Nordstrom Rack will remain a tenant, but may be moved into the new project while plans for a fitness center may be in the works, as well as restaurants and shops.
BJ’s Restaurant & Brewhouse, In-N-Out Burger and Chick-fil-A will remain in their current locations, according to the developer.
Waiting Game
Merlone Geier purchased the property in 2013 from Indianapolis-based Simon Property Group Inc. (NYSE: SPG).
A year after the purchase, Merlone Geier reported $142.4 million in annual sales for the mall, down 8.7% year-over-year, but still good enough to rank 17th among OC retail centers, according to Business Journal data.
The mall no longer earns enough to crack the list, which last year included 37 shopping centers.
It’s been more than a year since Merlone Geier hinted it would re-evaluate previously disclosed plans to create a more retail-focused mixed-use development at the site.
Through mid-2017, the owner said its intent was to turn the indoor mall into a downtown-like environment featuring new retailers, a movie theater, a new parking structure and a 350-unit apartment complex.
The project never began construction. Last July, Merlone Geier said it would take a step back and reconsider the project.
Its stated reason was the 2018 closure of the Macy’s store, a decision which it inferred caught it by surprise and “rendered the original site plans obsolete.”
The center’s three main anchors at the time of the 2013 sale were Sears, JCPenney and Macy’s. The Macy’s and JCPenney stores closed last year and Sears shuttered a few years ago and was demolished to make way for the new development.
