A Newport Beach developer has taken the first step toward transforming an aging sleeper, La Habra Fashion Square, into a no-frills shopping center.
Hughes Investments has agreed to buy 14.4 acres of the 37-acre mall site. That includes everything at the 19-year-old retail center except its anchors, Bullock's and Buffums.
In its place, Hughes hopes to build a $45 million center with high-volume, discount retailers. Existing structures would be gutted and replaced with at least two large anchors, plus a supermarket, drugstore and an assortment of restaurants and home improvement shops, said John Pentz, associate partner with Hughes.
Whether the plans ever get beyond blueprints, however, will depend on whether Hughes can do better than others in negotiating with the city as well as with Bullock's and Buffums.
If it can, Buena Park-based City Freeholds USA, which owns the 14.4 acres, could unload its interest in a lackluster mall. Hughes Investments could develop the site at the corner of Imperial Highway and Beach Boulevard. And the city could get more tax revenue.
During the first year of operation, "we'd be projecting retail sales of between $75 million to $100 million annually," contrasted with $28 million now, said Lee Risner, La Habra's city manager.
That would be a remarkable turnaround for the center, which for years has been one of Orange County's worst performers--largely because of poor freeway access and stiff competition from nearby Brea Mall. Last year, La Habra Fashion Square ranked 54th of 61 Southern California shopping centers, according to 1986 sales figures released this year by the state Board of Equalization.
A no-frills center, on the other hand, would be much better suited to La Habra, where the average household income is about $37,000 annually, said Rod Apodaca, a consultant with Laventhol & Horwath in Costa Mesa.
Hughes would turn those numbers around in a few years by building the new center by June, 1989, said Jim Flora, La Habra's mayor.
Pentz is optimistic that deals to buy La Habra's two anchors--neither of which has done well for years--will be wrapped up by late 1987.
Hughes has "the makings of a deal" to buy Buffums' La Habra site, he said. A separate deal with Bullock's hinges on whether Hughes can persuade the chain to move its store out of La Habra by early 1989. That would require Bullock's to leave La Habra before it could open a new store, 10 miles away at Brea Mall, in about four years.
Bullock's has reportedly not yet reached a formal agreement with Brea Mall. Officials with the chain could not be contacted late Friday.
The biggest question mark is the city of La Habra, which must formally approve the project.
According to Pentz, the deal would not be economically feasible without some sort of support from the city. "We need assistance (from) redevelopment" dollars or an alternative source of financing, he said.
City officials said they are studying the economic viability of the project. "We think the (site) is very hot commercially," Risner said.