Shoppers might not be ready for new luxury stores and pricey restaurants just yet, but the owner of ritzy Fashion Island in Newport Beach is betting they will be soon.
Over the next couple of years, developer Irvine Co. will spend more than $100 million to upgrade the shopping center. Plans call for opening a Nordstrom department store and Dean & DeLuca gourmet grocery, adding new fountains and a 24-foot-high water wall and enhancing the Mediterranean-inspired architecture and landscaping.
Construction of the lavish project begins at a time when mall traffic is down, retailers are struggling to stay afloat and few consumers are spending freely. But Fashion Island executives say recession or not, they have to keep sprucing up the property to retain longtime shoppers and attract new ones.
"It's important for all retail centers to reinvent themselves over time," Keith Eyrich, president of Irvine Co. Retail Properties, said in an interview Thursday.
"Are we affected by the current economic situation? Of course," he said. "But we don't focus on that when we take on a project of this magnitude. The economy will turn, the economy will come back. It'll be great when we come out of it to have this center at its peak."
With 1.5 million square feet of retail space and stores including Neiman Marcus, Bloomingdale's and Juicy Couture, Fashion Island is already one of Southern California's shopping powerhouses.
The open-air center is visited by more than 13 million people a year and sits on 75 acres overlooking the Pacific Ocean.
The project -- dubbed the Renaissance II -- is the center's most sweeping renovation in 25 years and is scheduled to be completed by November 2011, with some new stores opening before then.
Remodeling plans are already underway and aren't expected to affect daily mall operations.
Retail property owners often choose to remodel an existing center when opportunities to build new developments shrink, said Michael Niemira, chief economist of the International Council of Shopping Centers. But the latest recession has been so severe that overall shopping center construction spending is down, he said.
Irvine Co. executives acknowledge that few malls would be willing to take on such a massive project during the economic slump, which has slammed all sectors of the retail market.
