| Summary:
Laguna Hills Plaza is located on El Toro Road just
east of the I-5 Freeway in Southern Orange County, California.
The property was over 30 years old and in dire need
of a facelift. There was a major tenant vacancy and
rents were well below market. Complicating matters was
an environmental concern regarding a discharge of waste
into the sewer system by the dry cleaner tenant. The
property was in default and the bank was in foreclosure
proceedings.
Challenge:
The property was run down in all aspects including
the façade, sidewalks, loading docks and parking
lot. It was necessary to phase work in a manner to minimize
disturbance to existing tenants. Some tenants had to
be relocated to make room for a large box tenant. Additionally,
an environmental remediation plan had to be developed
and approved by the California Water Board.
Solution:
A multi-phase redevelopment plan was developed and
implemented to allow for a complete property renovation
with minimal interruption to existing tenants. One tenant
was bought out of their lease and another was relocated
to make room for a new major tenant. Petco was then
secured to fill the new box space made available.The
environmental plan was then developed and a cost was
estimated. The California Water Board approved the plan
and then the bank selling the property was asked to
guarantee the remediation plan and any cost overruns.
The bank did this and the exposure to BOSC was therefore
capped on the environmental cleanup.Results: Upon completion
of the plan the shopping center was 100% leased with
the majority of the tenants being national or regional.
The environmental cleanup did indeed run considerably
over estimates but that did not reflect on ownership
since the bank was responsible for all cost overruns.
The property is now an environmentally safe shopping
center and is an asset to its owners and the community
of Lake Forest. |
