An affiliate of San Diego-based mall owner Merlone Geier recently submitted revised development plans for the closely watched 68-acre property at the intersection of the San Diego (5) Freeway and El Toro Road, which it bought in 2013 for a reported $110 million.
The mall owner has touted forthcoming redevelopment of the site since the acquisition, but has yet to move forward on any significant ground-up construction.
The latest concept for a mixed-use development largely follows the script from a 2019 proposal that was unveiled by Merlone Geier for public comment and community feedback, but not acted on. The proposal calls for an elimination of the existing enclosed mall at the site, replaced by a much smaller retail footprint, alongside a bevy of other development including apartments, offices and a hotel.
The main difference between the latest plan and 2019’s concept is that Merlone Geier is cutting back on office space and apartment density.
Rentals, Mid-Rises
The new plans, initially submitted with the city late last year and revised in April, now include building a collection of mid-rise apartment complexes totaling 1,500 units and with almost 6,000 parking stalls; nearly 250,000 square feet of retail and dining space including a movie theater and fitness club; a 125-room boutique hotel and 465,000 square feet of mid-rise office space.
The new project is called Village at Laguna Hills, replacing the Five Lagunas name.
Though the recent proposal represents a smaller total footprint than that of the 2019 proposal, it still marks a significant increase in scope from the initial Five Lagunas plans the city approved in 2016, which was primarily retail and residential focused.
The latest iteration of the Laguna Hills project, estimated by the Business Journal to cost in excess of $600 million to build out, would be completed in phases over the course of a decade or so if it gets approvals, according to city filings.
An expected start date has not been disclosed, nor has it been disclosed if Merlone Geier would bring on other development partners for the different product types eyed for the site.
Village at Laguna
When Merlone Geier acquired the Village site in 2013, the mall had about 850,000 square feet of retail space.
It’s now a fraction of that size, with several large portions of the mall either demolished or shuttered the past few years. Several anchor department stores have left since the sale, and the interior of the mall was permanently closed a few years ago.
The new development proposal seek to demolish the remaining main mall structure, as well as free-standing buildings that previously housed the Sears auto repair center and the existing Just Tires, Firestone and Nordstrom Rack buildings; the latter store is expected to be relocated as part of the new project.
The existing restaurants at the mall that are adjacent to El Toro Road will remain, including BJ’s Restaurant and Brew House, In-N-Out, and King’s Fish House. They total about 25,000 square feet.
As part of the new proposal submitted to the city in April, the developers are looking to build 225,000 of new retail uses including stores, restaurants, services, a health club and a 50,000-square-foot, 1,200-seat movie theater.
The 1,500 proposed residential units will be built across four residential complexes and one mixed-use building; this marks a decrease from the 2,100 units proposed in 2019 but is greater than the 988 units approved by the city in 2016.
A quartet of four-story office buildings totaling 465,000 square feet are also proposed, far less than the 822,000 square feet of offices considered in 2019 but a jump from the nearly 46,000 square feet included in 2016 approvals.
The proposed boutique hotel will be upscale, with 100 to 150 rooms in a five-story building with ground-level retail space, according to city filings.
Other features of the new plan include a 2.6-acre centralized park, two parking structures, and various infrastructure upgrades.
City and county officials estimate the construction period will create 7,000 fulltime equivalent jobs, $507 million in labor income, and $1.2 billion in total Orange County economic output.
At full buildout, the project could support up to 4,000 local jobs and create $377 million in regional economic output annually.
Long Planned
A reimagined use for the mall has been in the works since 2000 as part of the city’s push to revitalize a 240-acre portion of the city into a “village-like downtown district,” though specific plans didn’t begin to take shape until 2016.
Merlone Geier purchased the property 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’s largest retail centers, according to Business Journal data.
Last year it posted about a third that amount of sales, according to city tax figures.
In 2016, Merlone Geier won approvals to turn the lightly trafficked site into a mixed-use community hub featuring new retailers, a movie theater, a new parking structure and a 350-unit apartment complex.
The project never began construction, and the owner has been reconsidering the scope of the project ever since.
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 in 2018, a few years after Sears shuttered and was demolished to make way for the new development.