Developer, REIT Join Forces on Shopping Center
Construction: Financing Snag Resolved as Project In Vista Gets Ready to Go
BY MANDY JACKSON
VISTA , Newport Beach-based Civic Partners has entered into a partnership with a real estate investment trust to get financing to begin construction on its shopping center in Vista.
Jacksonville, Fla.-based Regency Centers, a neighborhood shopping center REIT, and Civic Partners are joining forces with the goal of beginning construction on Vista Village by the end of August.
The $34 million, 218,000-square-foot shopping center was originally planned to be under construction early this year, as soon as the developer had its financing in place. Plans include restaurants and a 15-screen movie theater operated by Krikorian Premiere Theatres of Redondo Beach.
Regency will provide the financing and will be the co-developer for Vista Village. The 25-acre shopping center site is at South Santa Fe Avenue and Vista Village Drive.
According to Vista Redevelopment Director Dena Fuentes, lenders have been unwilling to lend money to a project that includes a movie theater, since various cinema operators have gone bankrupt in the past few years.
“Civic Partners has been looking for traditional financing, but it’s still hard with the theater,” Fuentes said.
Originally, Civic Partners planned to have the movie theater opened by Thanksgiving.
With construction beginning in August, the first phase of Vista Village should be open by the fall of 2003, according to Scott Clements, chief operating officer of Civic Partners. Site preparation for the second phase will begin before the end of this year.
Mark Harrigian, senior vice president of investments for Regency in Southern California, said, “The theater business right now is difficult to finance. We have our own internal capital.”
Harrigian added, “We don’t do a lot of theater development, but we are the largest neighborhood (shopping center) developer in the country.”
Regency got involved in Vista Village through a longstanding relationship with George Krikorian, the movie theater group’s founder.
“(Vista Village) has an entertainment component and neighborhood component. There’s no similar product in Vista. Edwards (Cinema) in San Marcos does fabulous business,” Harrigian said.
Also attracting Regency to the project was the fact that it could be under construction in just two months. A general contractor has not been selected for the project.
“Our understanding is that Regency had been watching the Vista site for a period of time that pre-dates Civic Partners’ involvement,” Clements said.
“Civic Partners agreed to partner with Regency to access their capital, realize cost savings techniques through their building expertise, gain exposure to the widest potential list of qualified tenants, and accelerate the development schedule,” he said.
So far, tenants that have signed leases in the 135,000-square-foot Phase 1 include Back Street Brewery, Panda Express, La Salsa, Coldstone Creamery, Subway and AT & T.; In Phase 2, which is 83,000 square feet, office supply store Staples and Chili’s Grill & Bar have signed leases.
Part Of A Larger Project
San Diego-based retail real estate brokerage Flocke & Avoyer is handling the leasing for Vista Village.
Signed leases total 105,000 square feet and leases that are out for signature total another 70,000 square feet, Fuentes said.
Harrigian said Civic Partners’ development agreement with the city will have to be revised to add Regency to the contract and to make room for a Vons grocery store in the shopping center’s second phase.
The shopping center is part of a 45-acre, $80 million entertainment district alongside an artificial creek and walking trails that the city completed in November. More restaurants and an office complex are also planned, but a developer has not been selected for those projects.
A 160,000-square-foot Lowe’s Home Improvement Warehouse has been under construction since May on Vista Village Drive. It is scheduled to open in late 2002 or early 2003.
Regency owns five shopping centers in San Diego, San Marcos and Escondido totaling 759,663 square feet.
Most recently, the REIT developed the 148,259-square-foot Campus Marketplace next to Cal State San Marcos. It is anchored by a Ralphs grocery store and Longs Drugs and opened in November.
Regency has Southern California offices in Los Angeles, Irvine and Solana Beach.
The company owns 272 retail properties totaling more than 29 million square feet in the United States. It has 38 development, redevelopment and renovation projects under way.