How the MainPlace Mall plans to tackle the e-commerce challenge – Orange County Register

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MainPlace Mall started as an open-air outlet called Fashion Square in 1958. In 1987, it got a name change and underwent its first major alteration when owners transformed it into a three-story enclosed mall, with stores, restaurants, a food court and a movie theater.

Now, MainPlace is about to undergo another major renovation to confront challenges facing brick-and-mortar retail nationwide: changing shopping habits and growing dependence on e-commerce sites like Amazon. Like malls all over Southern California and the country, MainPlace is reducing its retail footprint and adding a mix of uses, including apartments, offices and entertainment.

MainPlace had a groundbreaking on Tuesday, Jan. 25, to mark the first stage of this redevelopment: construction of a 309-unit apartment building called Paloma. But management still is tinkering with its plan. Getting the right mix of stores, homes, commercial, food and performance areas is a tricky, high-stakes business for mall owners today.

We sat down with Steven Levin, chief executive of MainPlace co-owner Centennial Real Estate Co. of Dallas. Here’s an edited version of that conversation.

Q: The estimated cost for the MainPlace redevelopment was $300 million when you first announced it in 2019. Do you still plan to spend that much?

A: It’s probably $500 million.

Q: Wow! Why so much?

A: A lot of the things that we had envisioned are still part of the project. But obviously, when COVID occurred, we looked at the plans and have adjusted.

Steven Levin

Q: What’s in your plan?

A: Paloma is under construction right now in the (mall’s) southwest corner. (Work began) back in September. COVID kinda delayed this groundbreaking ceremony.

We’re doing a live music entertainment venue. We still are planning for offices. There is another residential project with about 400 units.

And then in the middle, through the mall, from the back all the way out to the front, there is going to be an outdoor plaza, a large open-air plaza. It’s hard to describe. It’s going to be spectacular.

There’ll be areas for outdoor concerts or performances. There’ll be areas for children, both educational and entertainment. There will be areas for bringing in the local art community where you can go on art walks.

So, music, art, children. There will be places where you can get coffee and drinks. It’s gonna be just a spectacular place for people to come.

In addition, we’re creating a culinary experience. Instead of a food hall, we are creating a very, very cool culinary area with all different types of food and beverage experiences.

And so, we’re creating open-air portions, in addition to enclosed portions. Those are the things that are the next projects.

Q: When do they begin?

A: As soon as we can. We’re working on it now, and as soon as we can, get everything done.

Later this year, we’re going to start on the mall projects. They’re in the works right now. We’re just going through design and architecture and all the things you have to do before you can break ground. We’re still in the design stage.

The owners of MainPlace had a groundbreaking on Tuesday, Jan. 25, to mark the first stage of a striking redevelopment project: construction of a 309-unit, 409,000-square-foot apartment complex called Paloma. (Courtesy of Centennial Real Estate Co.)

Q: When will construction begin on the second apartment building along Main Street?

A: Well, you know, we want to get Paloma up and leasing. And then we’ll start (the second building) because the lead time is so long.

We are in full mode of creating this project. It’s going to be, as I said, spectacular.

Q: You once planned to add a grocery store, but it’s not in your latest rendering. Is that out?

A: Not necessarily. We haven’t done away with that.

It’s just that there are many things that go into that kind of planning and how the whole project is created over time.

It’s just grocery has to go on ground level (and have) street-front exposure. So, it’s dictated by the kind of projects that we can get going. So grocery is not out. It’s just not right now in these next stages.

The important thing with these projects is to create the most impact early on. So, that’s why we’re focused on creating these outdoor, activated areas of food and beverage and engagement and gathering places, with performances and music. Those are the things that really transform the entire reason that people come here.

We want this to be a place where people get up on Saturday and say, “Let’s go to MainPlace.” No particular agenda. But let’s go to MainPlace just to enjoy being there. And there are a million things that we can choose to do.

MainPlace is undergoing another major renovation as shopping habits change. Like malls all over Southern California and the country, MainPlace is reducing its retail footprint and adding a mix of uses, including apartments, offices and entertainment. (Courtesy of Centennial Real Estate Co.)

Q: Early on, you referred to the plan as a European marketplace with specialty stores, little food carts and spots to listen to music and relax. Is that still your vision?

A: Well, not exactly. It’s going to be a very engaging, culinary food area and experience. I’d say that’s the better way to describe it.

Q: Nordstrom left in 2017. Green Street data show there are 24 fewer stores than before Centennial and its partners bought the mall in 2015. Can you tell me what’s happened to taxable sales and leasing?

A: Frankly — it’s just my own opinion — people writing about what stores are closing is really not the relevant discussion. Retail is very vibrant today. What you’re doing is re-merchandising these projects.

Stores closed because we have too many stores in the nation. And consumer habits changed. Not a lot of projects were adapting quickly enough to those changes.

Now, there’ll be many, many stores opening. We have stores opening here all the time. And we will continue to have stores open. So it’s a very different landscape today.

We just brought the first NBC-sponsored American Ninja location in the United States here. It’s under construction now. Seventeen thousand square feet.

So, it’s all about re-merchandising today and transforming to meet the customers’ needs. The shopping is still a part of it. But it’s more food and beverage, its health, wellness and beauty. It’s entertainment.

(We’re not) a mall that’s not transforming. You’re hearing about a mall that is spending $500 million. To talk about stores that are closing or have closed shouldn’t be part of the story.

What we’re doing here is exciting and it’s active, and we have a ton of interest and we’re picking and choosing how we want to merchandise the project.

MainPlace highlights

Year founded: 1958

Location: Main Street, Santa Ana

Size: 1.1 million square feet

Number of stores: 165 as of June.

Principal owners: Centennial Real Estate Co. and USAA Real Estate Co.

Steven Levin

Residence: Dallas, Texas

Title: Founder and chief executive

Company: Centennial Real Estate Co.

Past experience: Executive positions at the Patriot American Corp., Hampton Real Estate Group Inc., The Levin Companies Inc., and a women’s apparel retailer

Education: Bachelor’s in business administration, University of Southern California

Q & A: How the MainPlace Mall plans to tackle the e-commerce challenge