ISSUE OF THE WEEK

Lisa Reedy

The opening of the Shops at Mission Viejo is a cause for celebration for

South County cities and their residents. Until now, the residents of

South County had to drive north to Fashion Island or South Coast Plaza in

search of first-class shopping.

For years, Newport Beach and its neighbor to the north, both of which

derive huge amounts of sales tax revenue from their respective malls,

benefited from South County’s lack of a competitive shopping center.

The new mall is very similar to South Coast Plaza both in look and feel,

as well as in the types of stores -- most notably Nordstrom. It should be

cause for concern for South Coast Plaza and Costa Mesa.

Newport Beach should also pay attention, but its situation is a little

different. Fashion Island has to work to stay relevant and exciting to

shoppers, but its huge advantage is that it is part of a larger, very

successful mixed-use center called Newport Center.

Most residents probably think of Newport Center merely as Fashion Island

with its 200 shops, 40 restaurants and four department stores.

But the center is much more than just a mall. It is home to hundreds of

businesses, cultural institutions like the Orange County Museum of Art,

the library and theaters. Newport Center has golf, tennis and health

clubs. The center’s medical complex is the largest west of the

Mississippi and a magnet for those seeking high quality health care.

Most might not realize it, but 1,000 people actually live inside Newport

Center, too. With all these amenities so close to their homes, it is easy

to understand why.

The hotels and shopping in Newport Center are big generators of cash for

the city and our local schools. Last year, the Four Seasons and the

Marriott alone generated $2.8 million in hotel tax. The sales tax

generated from shopping at Newport Center represents 25% of the total

sales tax generated in the city.

The key to Newport Center’s success is how all of these uses support the

stores, shops and restaurants at Fashion Island, as well as one another.

Office workers eat and shop here. Businesses located in the high-rise

buildings bring in clients and meetings to the hotels. Residents attend

lectures at the the library, take in movies and walk to their doctor’s

offices.

This synergy does not happen by accident. This was the way Newport Center

was planned when the historic ring road was carved out of barren

pastureland in 1965.

Critical to Newport Center’s success are the thriving companies that are

creating high-paying jobs for many residents. The Orange County Business

Journal recently dubbed Newport Center “Orange County’s Wall Street” with

its investment banks, law firms, stockbrokers and money management

companies. The center is home to such notable companies as Pacific Life,

PIMCO, Paine Webber, The Irvine Co. and Cruttenden Roth.

These companies donate to local charities and support our schools.

Pacific Life, for example, donated more than $2 million last year to

charities and the The Irvine Co. gave hundreds of thousands of dollars to

Newport’s public schools. The businesses in the office buildings are

critical to the success of Fashion Island and are a key component in the

formula that makes Newport Center thrive.

A troubling sign, however, is the recent departure of several notable

companies from Newport Center. Price Waterhouse, Quest Software, Duetche

Bank, EY Kenneth Leventhal and Latham and Watkins are examples of

companies that in recent times have all left Newport Center, in part

because of the city’s inability to accommodate their growth.

The city of Newport Beach recognizes the importance of Fashion Island and

Newport Center to its economic future. To address this problem and new

competition from Mission Viejo, the city is working on a plan that would

allow Fashion Island to grow and stay fresh by bringing in the best shops

and stores in the country. The city’s plan would allow companies like

Pacific Life, The Irvine Co. and the State Teachers’ Retirement System to

expand within Newport Center.

It’s a plan the residents of Newport Beach and anyone interested in the

long-term vitality of this city should support.

* LISA REEDY is executive director of the Newport Center Association, an

independent association that represents the interests of businesses at

Newport Center.

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