Costa Mesa Developer Performs ‘Anti-Mall’ Experiment in The Lab : Retail: The center, in two old warehouses, targets consumers in their 20s. Its stores cater to the young and disenchanted.

At a time when Orange County’s recession-wracked shopping centers are scrambling for customers, one developer is taking a less-beaten path: He’s trying to build a better trap for aging mall rats.

Instead of creating another look-alike mall, Shaheen Sadeghi gutted a vacant plant that once manufactured goggles for the military and transformed it into The Lab, a shopping mecca designed specifically for people in their 20s.

The Lab, Sadeghi said, is an “anti-mall.”

“Malls are all marble and buffed out,” Sadeghi said. “This building is . . . raw, soulful and comfortable, . . . a place where you can sip coffee, play chess or read a book.”

The Lab occupies two aging warehouses on Bristol Street, with exposed wooden ceilings, massive iron roof beams and cement floors. It is anchored by Urban Outfitters, which sells hip clothing and home decoration items, and Tower Records, which operates a large alternative music store. The center also houses more than a dozen shops, including shoe and clothing leader Na Na, a coffee shop, a vintage clothing store, a children’s clothing and furniture store and space for live entertainment.

Sadeghi doesn’t expect The Lab to rival Santa Monica’s hip Third Street Promenade or Los Angeles’ funky Melrose Avenue shopping district. But the former Quiksilver sportswear executive is betting that the community of disenchanted mall-goers in Orange County is strong enough to support smaller, alternative shops.

The 18-to-29 age group targeted by The Lab represents a potential gold mine because it is “the only group of people who actually want to spend more of their discretionary time shopping,” said Watts Wacker, a futurist with Yankelovich & Partners in New York.

Unfortunately for conventional retailers, Wacker said, those consumers are also “a group of people who feel unbelievably mistreated by the mainstream.”

Many younger Southern Californians view malls as “a corporate selling retail nightmare,” said Michael Pringle, who owns alternative clothing stores in San Diego and San Francisco and a wholesale clothing business. “They don’t create the image and energy that’s going to attract people. Malls are built for one purpose, . . . and it ain’t cool for kids.”

Skeptics, however, suggest that Sadeghi is merely putting a new spin on a familiar theme.

The Lab “sounds like a mini-mall in an old building,” said Keith Fox, spokesman for the International Council of Shopping Centers in New York. Yet Fox concedes that, with Tower and Urban Outfitters, Sadeghi has landed “two of the nation’s hottest retailers for that teens-through-20s” target group.

And, unlike some similar ventures elsewhere, The Lab is in a prime location. The old factory building is near the busy Costa Mesa Freeway and within a mile of South Coast Plaza.

Urban Outfitters is the descendant of Free Peoples Store, a freewheeling head shop that opened in Philadelphia in 1972. Owner Richard Hayne, then 23, discerned that mainstream retailers weren’t meeting the needs of a sizable number of style-conscious but cash-poor young adults.

Free Peoples died a natural death in 1976, when it was no longer hip to be a hippie. But Hayne, now 46, continues to cater to the fashion and home decorating needs of younger consumers through Urban Outfitters, which sprang to life after he closed the head shop.

Urban Outfitters opened its first California location in Santa Monica’s Third Street Promenade in 1992. Its second California store opened in November in The Lab.

Tower Records, no stranger to malls, geared its Tower Alternative store to appeal to consumers in their 20s, focusing on tunes that entice that group. Consequently, it carries some jazz and mainstream pop but little in the way of classical or country.

Taxi Taxi offers vintage clothing, while Newport Beach-based Modern Amusement sells fashionable children’s wear. Gypsy Den offers a place to sit and sip coffee or read a book, and there’s also space for live performances and art.

Some retail observers say that Sadeghi has correctly targeted a segment that’s willing to spend but is too often taken for granted.

Malls can be very uncool, Hayne said, for Urban Outfitters’ core clientele: “upscale homeless people, . . . people who typically are only recently out of their parents’ houses and who haven’t really settled down and created another home.”

Urban Outfitters’ consumers aren’t alone in deserting the big regional shopping centers, futurist Wacker said.

“In 1985, malls were the third most frequented places in our lives, but since then we’ve basically cut in half the amount of time we spend in them,” he said.

One factor in that decline is competition from value-oriented discount chains and warehouse clubs. Another is that young shoppers are instead frequenting stores like those found at The Lab and at a group of trendy shops on F Street near San Diego’s downtown post office.

However, although Sadeghi harbors doubts about the future of suburban malls, he concedes that they are not likely to lose their dominance of the retail horizon soon.

And real estate observers say that the “anti-mall” is simply another facet of the ever-changing retail industry.

“People are always trying to come up with a better mousetrap,” said John Shumway, president of Market Profiles, a real estate consulting firm based in Costa Mesa.

“In the rag business it’s even more competitive, so people try to differentiate themselves from the rest of the group.”