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Irvine Co.’s Retail Centers Now Run by Outside Firms

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Times Staff Writer

The Irvine Co. said Thursday that it has transferred management of all its retail centers, including its flagship Newport Beach Fashion Island, to outside firms.

The move was made as part of the giant land company’s “executive developer” program--a bid to streamline operations and reduce general administrative costs. Under the program, the company has given up direct responsibility for property management, development and leasing.

Company officials also detailed on Thursday previously announced plans to spend more than $190 million building new shopping and neighborhood centers by the end of 1988--nearly doubling the retail space in its community developments, especially in the city of Irvine.

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Under the executive developer program, the Costa Mesa firm of Donahue Schriber, a retail development and management company, received a one-year contract to begin managing Fashion Island, five neighborhood centers in Newport Beach and the Marketplace center near UC Irvine. Donahue Schriber will also develop and manage the Irvine Co.’s 70-acre Tustin Ranch promotional center.

The Irvine Co.’s seven other community centers, all in Irvine, will be managed for the next year by SunWest Asset Management, a subsidiary of SDC Development of Newport Beach.

Two other companies, Diversified Shopping Centers of Costa Mesa and Newport Beach-based Commerce Centers of America, were selected to develop and manage at least five future retail projects in Irvine and Newport Beach, said Richard Sim, head of the Irvine Co.’s Investment Properties unit.

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By retaining outside firms to manage and develop retail, commercial and residential properties, the Irvine Co. has slashed its payroll by 53% in the past 14 months, to 635 from 1,343 in July, 1986.

Company officials, however, repeatedly have said that the outside management firms have been retaining the former Irvine Co. employees and that only about 3% of those laid off by the company did not find immediate employment elsewhere.

Although it is giving up its direct property management and development roles, the Irvine Co. will continue to be a master planner, choosing sites, deciding land uses and obtaining approvals of projects on its 68,000 acres, officials said.

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Several of those new projects will be in the Irvine, where officials have criticized the company for ignoring local retail needs, said David Mudgett, head of the company’s retail properties division.

Within about three years, the added retail space will generate $6.5 million in sales tax revenue for the city, providing 10% of the city’s total budget, Mudgett said.

Other projects that Mudgett outlined included a 750,000-square-foot center, tentatively named Tustin Market Place, at Jamboree Boulevard and the Santa Ana Freeway. The first phase of the $75-million to $100-million center, set to open in a year, will feature furniture and home-improvement stores, with the second phase adding clothing and shoe stores, restaurants, a nightclub and a theater.

Donahue Schriber will develop and manage the project.

In response to questions about the possible entry of R.H. Macy & Co. Inc. as the anchor store in the proposed Irvine Center regional mall at the junction of the Santa Ana and San Diego freeways, Sim and Mudgett said the New York retail chain should make a decision by the end of the year. Until then, the Irvine Co. is holding off on contacting other potential anchor tenants, Mudgett said.

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