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LAB PARTNERS

Iconoclastic developer’s two centers cater to California’s counterculture

BY MAURA K. AMMENHEUSER

Shaheen Sadeghi gives new meaning to the term “lifestyle center.”

The clothing-designer-turned-developer built two centers in Costa Mesa, Calif., to fit the lifestyles of two very distinct audiences. The older complex, The Lab, is for young, urban, hip locals. Its sister project, The Camp, is completely different — developed for Southern California’s outdoorsy crowd: environmentally conscious surfers, skateboarders, snowboarders, hikers and scuba divers.

The centers are small, with about 12 tenants each. They stress apparel and feature restaurants with devoted local followings. At the Lab, there are the Gypsy Den, a busy café; Habana, which offers Cuban cuisine; and a sushi bar. The Camp’s centerpiece is Native Foods, a vegan restaurant. Both centers sport innovative design; their look and feel are as crucial as their tenants.

And the Lab and the Camp were created exclusively for their very specific niches, unlike nearly any other centers industry watchers could name. Not even large malls that cluster similar kinds of tenants near each other can make this claim.

“It’s not cookie-cutter,” said Ed Fawcett, president and CEO of the Costa Mesa Chamber of Commerce. “You can’t get bored in there.”

Michael Beyard, senior fellow for retail development at the Urban Land Institute, in Washington, D.C., calls these “groundbreaking projects” and describes Sadeghi as “way ahead of his time, way ahead of trends.”

Sadeghi spent most of his career in clothing design at such sportswear companies as Catalina and Jantzen. Eventually, he became president of Quiksilver, a Huntington Beach, Calif.-based “board-riding” youth apparel company.

It was the industry’s treatment of teens that inspired him to build the Lab, Sadeghi says. Fifteen years ago shopping centers either discouraged teens or viewed them as “cotton-candy, bubble-gum-chewing, hot-dog-on-a-stick, typical mall rats,” he said. But to him, they are sophisticated, politically and environmentally aware, tech-savvy and craving “a nonhomogenized, nonvanilla product.”

Hence the Lab, which Sadeghi dubbed “the anti-mall.” It opened in 1993 for customers between 16 and 25 years old. But today the Lab is more about culture than age, he says. “You have 55-year-old hippies having health food and an 18-year-old with blue hair having health food. It’s the same culture.” Sadeghi believes that creative merchandising and design that appeals to cultural commonalities tap into people’s emotions. He wants places that “make people feel good.”

Sadeghi built the Lab’s 50,000 square feet in two former factory buildings. Shops face inward, and most lack front walls and doors. They occupy oddly shaped spaces — a tiny triangle, for example, accommodates a sunglasses merchant. The Lab looks as if Picasso had rendered the blueprints. A fountain is constructed of stacks of brightly painted metal barrels. The merchants get creative too. One displays tennis shoes in glass grocer’s cases.

“The Lab is cool because there’s nothing else like it,” said John Ward, co-owner of Standard Issue, a newsstand. “The Lab is like the indie label of shopping centers, where people go to find out what else is going on around the world.”

Jeff Green has seen a lot of centers in his time and is similarly impressed.

“I like it because it’s a hip yet sophisticated venue, and you just don’t see those,” says Green, who is president of Jeff Green Partners, a Mill Valley, Calif., research firm serving developers and retailers. “It’s a little like he’s developed a hip college atmosphere in the suburbs.”

The Lab has matured, though, in its way. Patrons now average about 15 to 35 years of age. Tenants have turned over, too, and several sources say the place is less “junky,” more “boutique-y” than before.

“This shopping area is really upgrading,” said Jeremy Morillo, who works at Blends, a shoe store that displays its wares in freezer cases. “The selection used to be so-so,” offering a lot of “cheap stuff.”

Sadeghi says changing small spaces allows him to stay current. “I think of them as departments within a department store.”

The center has grown up with its customers, in the view of one of them, Huntington Beach resident Melissa Morales.

“I used to shop here years ago,” said Morales. She returned recently to recapture her “funkiness,” she says, now that she can afford more. Boutiques elsewhere offer similar stuff, Morales says, but “there’s not really a colony like this anywhere.”

Less than a third of Buffalo Exchange’s 26 stores operate in shopping centers, says Kerstin Block, president of the Tucson, Ariz.-based clothing reseller. Last year Buffalo Exchange opened a unit in the Lab because the area offers little in the way of “alternative” or youth-oriented merchandise.

The store generates more than $60,000 a month in sales, she says, which is well above average for a unit of that size.

Ward says he and his partner opened at the Lab last year because their sophisticated newsstand, which offers such titles as Anthem, Brutus and Dwell, doesn’t seem to fit any other environment in Orange County. “There’s no other consolidated place of cool culture,” he said.

Sadeghi says he felt compelled to build his second project because of trends toward outdoor sports and a growing public appreciation for nature. The Camp opened across the street from the Lab in 2002. Among its tenants are Active Ride Shop, which caters to skateboarders, snowboarders and surfers; Adventure 16, a camping, hiking and climbing outfitter; Cycle Werks; Liburdi’s Scuba Center; a yoga studio; a bakery; and two restaurants. Sadeghi recently expanded the Camp by 9,000 square feet, including a new men’s salon, bringing the property to 60,000 square feet.

Like the Lab, the Camp is a visual jangle of metal, glass and concrete, with some green touches, such as a hammock slung between two trees. Fountains whisper in corners; a fire pit is nestled in a rock garden. Adventure 16 has a grass roof.

“We made a commitment to make the project as environmentally friendly as possible,” Sadeghi said. The grass roof, he says, adds to the authenticity. San Diego-based Adventure 16 closed a 6,000-square-foot store elsewhere in the city to open one twice as big at the Camp.

“The concept of having a number of specialty outdoor retailers and related businesses struck a chord with us,” said John Mead, the retailer’s president. In fact, in the late 1990s Mead’s communitarian instincts led him to try bringing bike, boat and scuba shop owners into the San Diego and Los Angeles neighborhoods where Adventure 16 was operating. When Sadeghi called, Mead was ready for the Camp.

Liburdi’s Scuba Center moved its Irvine, Calif., store to the Camp because of its proximity to a freeway and the South Coast Plaza, the granddaddy of Southern California malls, which lies 1 mile from the center. Founder Joe Liburdi says he was impressed with the Camp’s concept and design. Liburdi’s installed a larger scuba-training pool than the previous site had accommodated. Liburdi says this is the only such heated saltwater pool in the region, and possibly in the country. The pool’s 11-foot depth is visible to passersby through a large Plexiglas wall next to Native Foods.

The Camp posts between $300 and $450 in sales per square foot, says Sadeghi, though some say it has yet to hit its stride. “The Camp is taking awhile to catch on, but it will,” said Fawcett said. “It takes a little longer for the unusual to take off.”

Sales at the Lab are between $450 and $600 per square foot, versus a reported $800 per square foot at South Coast Plaza.

On a recent gorgeous spring Saturday, the Camp was nearly deserted, though perhaps that is not surprising for a center devoted to lovers of the outdoors. One clerk suggested that on this first rain-free weekend in a month, the clientele were voting for time in the mountains or near the ocean.

“We have done less than hoped but are seeing a steady increase in sales as the center gets better known in the region,” said Mead, who declined to give exact figures.

But Liburdi says disappointing sales and traffic cannot entirely be blamed on the center’s newness. “They promoted this as a cultural center, and it’s not,” he said. “It’s a business center.” The young people who show up in the evenings for drum circles, he says, don’t buy scuba gear. Still, he says it is a wonderful place, and he likes it. His customers travel from Las Vegas, Seattle and even New Hampshire. He says traffic will improve if tenants take care of their own advertising.

Both centers lack visibility, says Green, and the Camp has already seen some turnover, to be sure. Billabong, a seller of surf, skate and snowboard apparel, for instance, was originally in the space that Active 16 now occupies. But the Camp keeps its fans.

“There are plenty of places in Orange County to purchase like product and food, including at South Coast Plaza,” Mead said. “However, as far as I know, [the Camp’s] unique combination of products and services does not exist in Southern California.”

Green cites just one other place that has a feel similar to the Sadeghi works: Seattle’s Capitol Hill District, which has a lifestyle mall with an Urban Outfitters. But he says much of the vibe there that reminds him of the Lab and the Camp arises from the surrounding neighborhood rather than a conscious design.

Sadeghi says that in a country he believes is overstored, his centers have no peers. Consumers won’t find vintage sneakers at Footlocker, for example. And neither does he expect there to be peers in the near future. Others agree.

“There’s a very limited number of opportunities to do that kind of thing,” said the Urban Land Institute’s Beyard. Big developers don’t have the patience to nurture tenants, preferring instead to replicate successful formats to satisfy shareholders, he says, and banks shun untested tenants and concepts.

Sadeghi and his wife, Linda, own Lab Holding, which in turn owns 70 percent of the Lab. A limited partner that helped fund the project holds the rest. The Sadeghis fully funded and own the Camp.

“I think he’s just getting started,” said Mead.

Indeed. And for whom will Sadeghi build next? “The power mom,” he said.

Ladies, start your minivans.