California Apparel News

The longtime loser in Orange County’s mall wars may finally be on its way to becoming a big winner.

The Huntington Beach Mall, which for more than a decade has hemorrhaged money and lost tenants such as JCPenney to neighboring shopping centers, is scheduled to be demolished in mid-February and reborn in 2005 as Bella Terra, a new lifestyle/entertainment center.

To ensure this rebirth will have a safe delivery, Bella Terra’s developers, Los Angeles–based JH Snyder Co. and Irvine, Calif.–based Ezralow Retail Properties LLC, have contracted a company known for turning around long-suffering properties.

Venice, Calif.–based The Jerde Partnership, renowned for breathing life into downtown San Diego by designing the highly popular Horton Plaza shopping center, will redevelop the enclosed mall into a 1-millionsquare- foot open-air lifestyle and entertainment center, which the companies hope will be reminiscent of a luxurious Italian villa with fountains and landscaped walkways.

Bella Terra is expected to cost an estimated $150 million and pay $2.6 million in annual sales tax revenues when it opens. Century Theatres, a Northern California–based luxury cinema company, has already signed on to build a 20-screen movie complex at the mall.

The movie theaters will join an existing mix of retailers and businesses that includes Barnes & Noble, Starbucks, Kohl’s, Mervyn’s and the Burlington Coat Factory. Developers expect Sears, Roebuck and Co.’s The Great Indoors store will be built on an adjacent parcel where a long-vacant Montgomery Wards building currently stands.

Challenges abound

Many Huntington Beach residents anticipate Bella Terra will catalyze a revival of the area.

Tom Livengood is one of those residents. But as one of Huntington Beach’s longestserving planning commissioners, he also realizes the mall will have a hard time distinguishing itself in a region where the worldfamous upscale South Coast Plaza is an easy seven-mile trip down Interstate 405, and the Westminster Mall—which claims tenants such as Macy’s, Robinsons-May and Sears—is a mere two miles away.

“It’s going to be hard for Bella Terra to find a niche,” said Livengood, who has spent his planning career trying to find a solution to the mall’s problems. “They got some handcuffs on. They got Kohl’s, which is not unique. Then they have Mervyn’s and Burlington Coat Factory, which do okay, but are not the strongest retailers.”

Livengood said the shopping center’s inability to break ties with long-term tenants such as Sears, which owns the long-dormant Montgomery Wards site, is one reason the mall has been in the doldrums for so long, despite its advantageous location at the intersection of I-405 and Beach Boulevard.

“Everyone who took over that property set this shopping center at a low priority because of the long-term leases and separate ownership of property,” Livengood said.

Bella Terra’s developers declined requests to comment for this story.

The Huntington Beach Mall once generated $2 million in sales tax annually, but three major blows to its anchors in the mid-1990s sent the mall’s sales tax plummeting to $900,000. The mall’s Broadway and Montgomery Wards went bankrupt, and the JCPenney store moved to the Westminster Mall. The property went through a string of different owners, including the Macerich Co. of Los Angeles, but nothing could be done to revive the mall.

In 1999, Ezralow purchased the property from Macerich, and in 2001, JH Snyder partnered with Ezralow to turn the property around.

Huntington Beach Economic Development Director David Biggs said he hopes the companies’ developing strength, along with Jerde’s design innovations, will create a big attraction in the town.

“Our residents spend a lot of money out of town,” Biggs said. “We hope to re-absorb a lot of tax dollars by keeping sales here.”

Deloitte & Touche retail expert Tony Cherbak said the place has a tough road ahead of it.

“A new property will always get interest initially, but it’s going to have to sustain its draw to be successful.” Cherbak said. “In Orange County, when you have two giants, South Coast Plaza and Fashion Island, you’re going to have some stiff competition. I’m sure it will have a strong local following. If they’re trying to pull people from more than Huntington Beach, it will have its competition.”

Livengood remained cautiously optimistic about the mall’s chances.

“If anyone goes in there, it’s a real gamble,” he said. “There’s a lot of factors you got to put together. But I think this is the best shot we got.”