Center gets new owner

Even before Newport Beach-based commercial real estate company Burnham USA Equities Inc. bought South Coast Home Furnishings Centre in Costa Mesa on Friday, they were already paying for advertising to reinvigorate the enormous, failing retail furniture marketplace — a gesture that has some store owners optimistic.

Other owners, however, have started off in a similar fashion and then fallen flat, tenants said. Much more needs to be done if the mall is going to fulfill its original vision as a one-stop furniture outlet well-known throughout Southern California. Many business operators think the new property owner needs to cut rents, improve its marketing efforts and commit to the center in the long term to make real progress.

Burnham bought the 300,000-square-foot plaza for about $35 million a year and a half after the developer, Birtcher Development and Investments, sold it for $100 million. Since its 2007 opening, tenants have fled in droves, leaving it about 60% occupied. Last summer, the property went into receivership when the owners defaulted on their loans.

In order to convince retailers that Burnham was serious about turning the center around, the new owner paid for ads in local newspapers, paid sign twirlers to stand on Harbor Boulevard and put on a promotion Sunday where In-N-Out Burger gave out free hamburgers.

“The biggest problem we have here is that there are a lot of people in Orange County that don’t even know we are here,” said Chris Mulhall, owner of modern home furniture and decor shop Visions in Contemporary Living.

But many retailers think Burnham needs to extend its advertising beyond the local area into neighboring counties like Los Angeles, Riverside and San Diego.

“If our job is to just furnish Costa Mesa, then we’re done, and we might as well pack up and go home. I want Long Beach, I want Laguna Beach, I want Palm Springs,” said Raymond Croteau, manager of high-end furniture store White Orchid.

Croteau, like many other business operators, has already asked Burnham for a rent break. If the commercial real estate company got the property for a 65% discount, then it should pass those savings along, tenants have said.

Burnham has committed to filling up the vacant space in short order, which retailers say is a step in the right direction, but after having three owners in a two-year period, some are wary.

“I’m a realist. The owners are going to flip this place,” said one furniture store owner who didn’t want to be identified.

Because Burnham got the mall on the cheap, the company can afford to rent out all of the vacant space for cheap, which would allow them to resell the space for a big profit a couple of years down the line when it’s more desirable, the source said. That would again leave the plaza in the middle of a sale where nobody is keeping up the advertising that the businesses need to survive.

Still, if the vacancies are filled with furniture outlets and offices for architects, designers and builders, as Burnham has proposed, it can only be good for business, Croteau said.

After a weekend with what some considered record foot traffic in the mall because of the In-N-Out promotion and other advertising, most of the shops had few if any customers during the rainy Monday. Tenants continue to lay off workers and debate whether to keep their businesses in the plaza.

“The people next door are going to be gone within a couple weeks, and a lot of stores are teetering on the fence,” Mulhall said.

All eyes are on Burnham to see if the company continues to lead the charge of advertising and fills the store fronts. It’s a virtual consensus among retailers that Burnham couldn’t possibly be worse than the owners it’s replacing.

REPORTER ALAN BLANK may be reached at (714) 966-4623 or at alan.blank@latimes.com.