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Mission Viejo center gets new lease on life

by Kevin Kenyon

When a 4-year old can tell your mall is a dinosaur, you know it’s time for a change.

That was the painfully obvious conclusion that Arthur Spellmeyer, senior vice president of development for Indianapolis-based Simon Property Group, came to soon after his company gained control of Mission Viejo (Calif.) Mall three years ago as part of its acquisition of The Edward J. DeBartolo Corp.

“A mother was at the mall with her 4-year old, and the little girl said ‘Mom, I always like coming to this mall because it’s the ‘pretend’ mall,’ which was a sad but accurate commentary to what was there at the time,” he said.

At first glance, the $150 million renovation and expansion of the former Mission Viejo (Calif.) Mall appears be nothing more than a typical regional mall makeover.

Simon approached Mission Viejo (Calif.) Mall as if it were a new center, and renamed it The Shops at Mission Viejo.

Ala Moana is the world’s largest open-air shopping center at 1.8 million square feet, according to General Growth, and its tenants include anchors Neiman Marcus, Liberty House, Sears and JC Penney, plus high-fashion retailers such as Tiffany & Co., Giorgio Armani, Gucci, Prada and Chanel. General Growth had managed the center for 10 years, and its acquisition brings the company’s total ownership portfolio to 81 regional malls.

The new center — renamed The Shops at Mission Viejo — was, at press time, expected to have made its debut in September.

By all accounts, the 20-year old center’s main problem was shoppers bypassing it to get to flashier upscale malls such as South Coast Plaza in Costa Mesa and Fashion Island in Newport Beach.

It was obvious that the middle-market mall no longer served the needs of the now-thriving South Orange County trade area.

But according to Spellmeyer, the situation was much more severe. So severe, in fact, that Simon officials knew a typical renovation/expansion effort would not do the job.

“Without mincing words, Mission Viejo Mall was a sleepy, ineffective shopping center that had been gradually deteriorating for years,” Spellmeyer said. “Time had clearly passed it by in every aspect, most notably in its design and merchandising mix.”

Trying to dispel that perception, officials at Simon approached the effort as if Mission Viejo were a new center, Spellmeyer said.

“We saw this as a tremendous opportunity for us to come in and do a showcase redevelopment, so it’s definitely closer to a new mall than just a renovation and expansion,” he said.

Consequently, with the exception of 36 existing retailers and two department stores — Robinsons-May and Macy’s — the new mall will bear little resemblance to its predecessor, Spellmeyer explained.

“Only a handful of tenants who were at the property when we started this last year will still be there when we re-open,” he said. “We pretty much de-leased everything that wasn’t right for the market.”

Although the center was expected to open in September, a dining veranda with additional restaurants won’t open until late next year.

Upon completion, the center’s total square footage will increase 45%, from 816,000 square feet to 1.2 million square feet.

Along with approximately 140 specialty stores (64 new), The Shops at Mission Viejo now boasts two new department stores, including a 165,000-square-foot Nordstrom, and a 100,000-square-foot Saks Fifth Avenue.

From the start, the main goal of the renovation and expansion was to reposition the shopping center as the predominant upscale shopping and dining environment in South Orange County, according to Spellmeyer, who noted that Nordstrom, Saks (also at South Coast Plaza) and a host of new tenants should aid greatly in that effort.

In the women’s fashion category, new tenants include Ann Taylor, BCBG, bebe, Chico’s, DKNY, French Connection, GapBody, Modern Romance, Privilege, Rampage, Talbots Petites & Accessories, and Vertigo.

New retailers featuring men’s and women’s fashions include Polo Jean Company, A/X Armani Exchange, Abercrombie & Fitch, Banana Republic, Brooks Brothers, Eddie Bauer, Garys Studio, J. Crew, Pacific Sunwear and The Gap.

The merchandising mix will also feature five well-known home furnishing retailers — Restoration Hardware, Crate & Barrel, Pottery Barn, Williams-Sonoma, and Z Galleria, as well as children’s fashion and toy retailers such as BabyGap, GapKids, Help Us Grow and Toys International.

The Cheesecake Factory, Ruby’s Diner, P.F Chang’s and Napa Valley Grille headline the list of new restaurants in the center.

With such a large number of new tenants, it’s rather surprising that parts of the mall remained open through the entire construction process, a development Spellmeyer attributes to good communication between mall officials and tenants.

“Believe me, it’s been a nightmare, but we’ve communicated all along and completed things when we said we were going to,” he explained. “It took a tremendous amount of coordination to be able to build a new mall where there was already an existing mall.”

While the mall that Simon inherited from DeBartolo may have been in decline, Spellmeyer said its ideal location — between I-5 (San Diego Freeway) and Crown Valley Parkway — provided the only option for developing a new mall in such a tight market.

“If you were looking for a piece of property to develop a shopping center with a Robinsons-May, Macy’s, Nordstrom and Saks, you wouldn’t be able to find it in this area, and the hurdles to get permitting would have been difficult to overcome,” he said.

Compared to the original mall, the new center should also be a much better fit for South Orange County, which Spellmeyer says is now one the highest income areas in the country, boasting an average annual household income of $83,000.

“When the mall was built in 1979, there were actually places between San Diego and Los Angeles where there weren’t any people, and the merchandising mix reflected the area at that time,” he said. “Now we feel like what we’re doing now better reflects what’s happening in the trade area.”