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Plan Would Put Outlet Mall at The City

October 22, 1994|GREG JOHNSON | TIMES STAFF WRITER

ORANGE — An East Coast developer believes that the aging and troubled The City mall should be replaced with a 1-million-square-foot mall filled with 12 anchor stores and 169 retail shops.

But it's not yet certain that Mills Corp., a privately held company based in Washington, will ever build the project described early this year in documents filed with the federal Securities and Exchange Commission.

"Mills is currently in negotiations with the site's owners and we still view it as a good, viable (project)," Kent Digby, Mills senior vice president, said Friday. "And, as far as we know, there are no other developers looking at this potential site."

According to county and city officials, negotiations over the expansion of nearby Theo Lacy Branch Jail include a possible economic stimulus package for Orange that would help the city improve traffic circulation around The City shopping center.

How the stimulus package would fit in with plans for the mall are not clear, but documents filed with the SEC showed that Mills was considering a factory outlet center similar to four centers it already operates in Fort Lauderdale, Fla., Chicago, Philadelphia and suburban Washington, D.C. Mills also is considering a similar outlet mall in Ontario. Independently, a Century City developer has unveiled plans to build two competing outlet centers in Carson and Colton.

Some retail industry observers doubt that even the heavily populated Southern California region could support more than two of the large outlet centers.

Mills' SEC filing showed that the company faces several obstacles: It lost money in each of the past four years and, like many development companies, it has a heavy debt load.

For years, developers have been building factory outlet centers in out-of-the-way locations such as Barstow and Cabazon near Palm Springs, where manufacturers can sell their wares without alienating full-price retailers clustered in regional shopping centers.

But in recent years, some developers have begun considering urban locations for the outlet centers.

Value Retail News, a trade publication, suggests that U.S. consumers are hungry for bargains like those found at outlet centers, which feature the likes of Levi Strauss, Patagonia, Bugle Boy, Nike and Izod. While conventional retailing has grown slowly, sales at outlet stores grew to $8.3 billion in 1992, according to the most recent figures available, up 12% from $7.4 billion the previous year.

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