Seaport Village, the ailing retail center at the Redondo Beach Pier, is being revitalized as beachfront office space.
Stockton-based American Savings & Loan Assn., which and took over ownership and management of the facility in August, has renamed it Pier Plaza and hopes that attorneys, architects and accountants will fill the space largely ignored by jewelers, clothiers and other merchants.
The savings and loan gained ownership of the Redondo facility when it foreclosed on its loan to Safren Development Co., which also owns the troubled Seaport Village in Long Beach.
In Redondo Beach, the city--owner of the three-level parking garage on which the development there stands--has concluded that the site is not suitable for retail use, said Harbor Director Sheila Schoettger. She said the city has lost thousands of dollars in potential earnings, but no specific loss figure has been determined.
Under the 1979 agreement with Safren Development, the city was to receive 3% of restaurant revenue and 2% of monthly gross retail revenue, or $5,000, whichever was higher. The city never received more than the $5,000 minimum monthly fee, Schoettger said.
The agreement with American Savings & Loan calls for the city to get $5,000 a month or 10% of the monthly rents collected for office space and 3% of the restaurants' monthly gross revenue, whichever is higher. There are two restaurants at the site. Schoettger said she does not expect the city to get much more than the $5,000 monthly minimum.
Councilwoman Kay Horrell, who is a real estate agent and who represents the King Harbor area, said she favors the change to office space.
"I would hope that it is a need that can be filled and that we can get life on the top deck," she said. "I think it probably will. You're picking up such a beautiful view, and view is becoming more and more important to people."
Since opening in January, 1981, the $7-million New England-style shopping center struggled to attract tenants and shoppers to its 12 buildings and 65,000 square feet of space. Schoettger attributed the problems to inadequate promotion and to the fact that the garage underneath was filled on weekends with the cars of beachgoers, not shoppers.
The center's design also was a problem, she said. "People looking up from the pier often mistook it for condos or private offices," she said. "People were afraid to go up there. They are not used to going to the third floor of the parking structure."
Filed for Bankruptcy
In 1982, Seaport Village-Redondo Beach, a subsidiary of Safren Development, filed for reorganization under Chapter 11 of the federal bankruptcy code. The bankruptcy court last summer determined that the company could not reorganize sufficiently to pay its creditors and it allowed American Savings & Loan to take over.
Tom Bacon, a leasing agent with the Charles Dunn Co. in Encino, said space will rent at $1.75 to $2 a square foot. He said the average rent in the South Bay is $1.82 a square foot.
Bacon said American Savings & Loan will spend about $1.5 million to upgrade the facility, including repainting and repairing electrical and plumbing fixtures.
"We're trying to freshen up the image of the project," he said.
Bacon said only six tenants remain--the restaurants, a travel agency, an office maintenance company, an aerospace firm's office and radio station KFOX--but he is negotiating with several firms that he declined to identify.
Two Other Failures
Safren Development failed in its two other attempts to market similarly designed Seaport Villages in California.
The Seaport Village in Long Beach was the first, built by Safren Development in the late 1960s, and was relatively successful until recent years. In 1978, the center grossed more than $1.2 million, but sales plummeted to about $200,000 in 1983. Last May, Safren's Long Beach subsidiary filed for bankruptcy, and last November Great Western Savings foreclosed on a loan.
Zone Change Needed
Carolyn Sutter, general manager of the Long Beach Tidelands Agency, which manages the city's beachfront property, said it was too soon to say what would be done with the property. She said a zoning change would be needed to convert the facility to office space.
She said Seaport Village eventually failed because the developers did not reinvest any money in the site and allowed it to deteriorate. "It's a nice piece of property that could have been successful under the right management. A retail center could have been successful."
No one at Safren Development could be reached for comment.
The development company's second facility, at the Port of Redwood City, was auctioned at a foreclosure sale in 1982 while still under construction. A San Francisco group bought the center and remodeled it for office space.
Paul Caringella, operations manager of the center, called Portside, said that it is 90% leased and that plans are being made to build another 60,000 square feet of office space.
"It was the right thing to do," Caringella said of changing the land use. "There wasn't any traffic to support a boutique or other upscale retail businesses. We need more office space up here."