Hubs of Commerce Point to Solid Future

Imagine flying in a helicopter over Orange County. Looking down, homes and freeways spread from ocean to mountains, a meadow of mushrooming growth that starts to thin only as you gaze to the south.

Mixed in, like stands of pines in an otherwise barren landscape, are patches of high-rise buildings and landmarks: a cluster near Fashion Island along the central coast, a thicket farther inland near the Orange County Performing Arts Center and John Wayne Airport, a grouping in Anaheim next to Edison International Field and the Arrowhead Pond.

These are Orange County’s hubs of commerce, the building blocks that define the county and direct its growth. To see where Orange County is headed beyond 2000, look to the hubs.

“As Orange County grows in population, we will see a buildup of urban nodes,” said Scott Bollens, chairman of the Urban and Regional Planning department at UC Irvine. Although Orange County will continue to exist without a central business district, “we’re going to see buildings with increasing density. It’s [more of] what Orange County really is.”

This year saw major changes to many of the county’s hubs. The opening of the Block in Orange put a key retail center in the sports and entertainment hub. The Segerstrom family’s donation of land in Costa Mesa for an expansion of the Orange County Performing Arts Center strengthens the South Coast area as the cultural center. And a second phase of building at the Irvine Spectrum helps make it more of a destination for technology workers.

New hubs are starting to emerge in South County as the population grows in that direction. But perhaps the most interesting hub to evolve has been one that tries to redefine an older downtown core.

The Discovery Science Center, which opened this month, joins the nearby Bowers Museum of Cultural Art and downtown Santa Ana as a cultural hub. Instead of being planned and built from scratch by developers, it evolved on its own in a traditional, ethnically diverse city. Instead of reflecting only commercial prowess, it reveals a county’s soul.

“We wanted to preserve the historical heart, but at the same time allow for new development,” said David N. Ream, Santa Ana’s city manager, who hopes several new projects will raise the city’s image. “Although people will still shop in suburban shopping malls, they are interested in a different experience, by walking around an older place, with open air and more ethnic restaurants and food. There’s a little rebellion against the sterile environments found in the suburbs.”

These urban centers that combine office buildings, retailers, entertainment or cultural attractions into self-contained destinations are more plentiful in Southern California than anywhere else. They have become the template for development throughout the country.

“The future came to Orange County first,” said author Joel Garreau, who coined the term “edge cities” for regions like Orange County that grew outside traditional cities. “Every urban area worldwide that is growing is growing like Orange County.”

San Jose and surrounding counties, once dependent on San Francisco, have blossomed into the Silicon Valley. Northern Virginia, once sustained by Washington, D.C., has been altered by numerous high-tech firms opening there. And Schaumburg, Ill., once hinged on Chicago, has turned the area west of O’Hare International Airport has been changed into an economic driver.

Like Orange County, these places largely grew up over the past 30 years and were designed around the automobile. As freeway expansion extended the distance from businesses to traditional downtown cores, making commutes from once-distant places possible, people were lured in droves to newer, cheaper homes in pristine suburbs.

Orange County’s multiple “downtowns” have been translated into results few would have dreamed possible only decades ago. Consider that the South Coast Plaza-John Wayne Airport area provides nearly as many jobs and as much commercial space as downtown Seattle. Or, that Fashion Island-Newport Center contains a larger employment base than downtown Memphis, according to Garreau.

In the decades ahead, as Orange County’s population pushes farther south, new “nodes” certainly will emerge as ribbons of freeways allow growth to be spread farther around the region.

“Hubs were instrumental in changing the direction of development in Orange County,” said Ken Agid, a longtime Orange County housing consultant. “They’ve been, in essence, the heartbeat of Orange County’s development.”

Walt Disney’s Dream Proved a Catalyst

In the mid-1950s, as a flood of families looked beyond Los Angeles for housing, Walt Disney cleared a swath of orange groves to build his family playground.

Viewing Anaheim as the Southland’s geographical middle, his visionary plan, costing $17 million and nearly bankrupting him, was an immediate success. After seven weeks, the park is said to have recorded its one millionth customer, putting Anaheim and Orange County on the map.

Today, Disneyland still ranks among the most visited parks in North America, attracting nearly 14 million people a year, according to industry estimates. As a result, Disney’s dream continues to be a catalyst in Orange County’s $5.6-billion tourism industry and in economic development plans.

A second Disney theme park, California Adventure, is being built next to the original. A huge retail, dining and entertainment area will connect the theme parks to the Disneyland Hotel, which also is being renovated, and the Disneyland Pacific Hotel.

In turn, the area surrounding the theme parks, zoned for up to 16,000 new hotel rooms, is being redeveloped into a resort-like destination. Anaheim’s convention center, across the street, is being expanded by 40%. The Santa Ana Freeway and roads leading to the park also are being rebuilt. Next to Edison International Field, where the Angels--owned by Disney--play, the city is developing Anaheim Sportstown, an entertainment area that could cost more than $100 million.

“There’s no question that billions of dollars of additional investments will be made as a result of Disney’s expansion,” said Anaheim Mayor Tom Daly, whose own city accounts for the bulk of the $4.5 billion in construction projects underway in the area.

The ripple effects will extend beyond Anaheim into surrounding cities, which hope to cash in on the changes.

Last month in Orange, for instance, developers opened the Block, the largest entertainment venue ever created in the county. In Garden Grove, a major building boom has been launched, and the largest retail and entertainment project ever proposed there, Riverwalk, would cost at least $350 million.

“The Anaheim-Orange-Garden Grove area is going to experience more change than any other place in Orange County,” said Michael Meyer, who recently launched a real estate investment advisory firm in Newport Beach.

Irvine Co. Took Lead in Campus Hub Concept

In 1960, the Irvine Co., in south Orange County, was known mainly for cattle grazing and avocado trees. But as growth spread, there was enormous demand to pave over pastures with housing.

Then, much of South County was owned as family ranches such as the Irvine Co., which held roughly 20% of the county’s land. It donated a vast tract for what became UCI. Instead of building traditional homes around the university such as those common in North County, it developed the ranch into the nation’s largest planned community.

In the dawn of the Information Age, technology was the buzzword. Rather than heading for congested downtown cores, high-tech start-up firms were locating in suburbs where people could live closer to home.

As the population expanded, the company opened Fashion Island at Newport Center in 1967, only to be upstaged the same year by the Segerstrom family’s unveiling of South Coast Plaza, an even larger shopping mall.

The rivalry continued after billionaire developer Donald Bren took over the Irvine Co. In the mid-1990s, when upscale retailer Bloomingdale’s decided to expand into Southern California, both Bren and Segerstrom competed for the firm for nearly two years in hopes of gaining bragging rights, which Bren finally won. But South Coast remains the larger mall.

Meanwhile, Irvine Spectrum, housing more than 2,000 high-tech firms, became one of the nation’s largest high-tech business communities. Construction of the final phase of its shopping and entertainment complex may be launched next year, expanding the center’s size to nearly 1 million square feet.

From Lima Beans to a Top Shopping Address

A century ago, the Segerstrom family arrived in Orange County, becoming dairy farmers and lima bean growers. Eventually, they were the nation’s largest independent growers of the legumes. But by the 1960s, when the land became too valuable for farming, the family developed South Coast Plaza and a number of other ventures in Costa Mesa and Santa Ana.

Although South Coast began as a modest mall, Henry Segerstrom, grandson of the family patriarch C.J., dreamed of turning Bristol Street into one of the nation’s top shopping addresses, rivaling Fifth Avenue in New York or Rodeo Drive in Beverly Hills. Through persistence, he persuaded many retail icons such as Hugo Boss, Chanel and Tiffany & Co. to open boutiques at South Coast.

But Segerstrom’s vision evolved into more than a designers row. The intensely private Segerstrom, who declined to be interviewed for this story, turned the shopping district into premier business and cultural locations.

Across the street from South Coast stand several office towers, the Westin South Coast Plaza, South Coast Repertory and the Orange County Performing Arts Center. Segerstrom, the driving force behind the arts center, recently donated land for a $100-million expansion of the center.

Moreover, the family firm said it plans to build a people mover that links South Coast to Crystal Court, another large shopping mall the Segerstroms operate but which has struggled.

The area around John Wayne Airport, containing more than half the office space in Orange County, also is improving. As vacancy rates have plunged to their lowest levels since the mid-1980s, rents have soared and the first new office towers of the decade are under construction.

A Downtown Struggles Against the Giant Malls

In Santa Ana, officials have been trying to rebuild the downtown area for decades. It has been an uphill battle to lure customers for 20 years.

“Downtown was caught between Fashion Island and South Coast Plaza,” said Ream, the city manager, who remembers that his window once looked out over an auto-towing business with crushed cars all around. But there has been a resurgence. The Ronald Reagan Federal Building is due to open next month. And perhaps most important, the Discovery Science Center, a $24-million fusion of children’s education and entertainment, opened this month.

In all, there are 15 projects underway or near completion, adding up to more than $300 million. An 18-acre parcel, the last one remaining in the area, will be developed into a new office, hotel and retail project, Ream said.

City officials hope people will be drawn to a host of attractions extending north to MainPlace/Santa Ana, one of the region’s largest malls. Just off Interstate 5, starting at the Discovery Science Center, city officials hope to proceed to what’s planned as a cultural enclave, moving south to the Bowers Museum of Cultural Art and stopping at the new home of the St. Joseph Ballet, the Artists Village in the historic downtown area, in between rows of cafes, galleries and boutiques.

The new development will change perceptions, Ream said. “It breaks down the stereotype of the old Santa Ana you wouldn’t want to visit,” he said.

New Hubs Emerging as Growth Moves South

As the population moves farther south in the county, drawn by newly spun suburbs, other hubs are emerging as freeways are built.

South County has undergone an unprecedented housing and business boom, largely resulting from a network of toll roads that have recently opened or are being built. With more undeveloped space than anywhere else in the county--but constrained by natural boundaries--it has long been considered ripe for growth.

“The same thing that drove people out of L.A. County is encouraging folks to move into South County,” said Bollens of UCI. “It’s newer and it’s perceived as less crowded with a higher quality of life. It re-creates suburbia.”

In the Rancho Santa Margarita/Foothill Ranch area, change has come quickly. In less than 12 years of existence, both places have turned large tracts of land into homes and businesses. Combined, they have developed more than 10 million square feet of retail and commercial space--with more underway.

Sunglass maker Oakley Inc. built its headquarters in Foothill Ranch, and Cox Communications has recently committed to a large office in Rancho Santa Margarita. But the magnetic pull of undeveloped space continues to lure others as well.

Not far away, Ladera Ranch plans to build about 8,100 homes, and growth in Mission Viejo will create greater population density. “The transportation system has changed to energize the whole South County area,” said John Kelterer, president of RSM Management Co., which manages the community.

Aliso Viejo and San Clemente also are benefiting from the freeways. With the area planned for homes being nearly built out, Aliso Viejo is attracting more businesses.

About 2 million square feet of office space has been developed, with 1.5 million square feet more under construction or soon to be, officials said. United Parcel Service has opened a large facility, and Fluor Corp., another one of Orange County’s Fortune 500 companies, is relocating its headquarters there along the San Joaquin Hills Toll Road.

“Now commercial is the big boom in Aliso Viejo,” said Russ Parker of Parker Properties. He added some big retailers, such as Barnes and Noble, Pier One Imports and a 20-screen movie theater have opened in the Town Center, which has grown to nearly 1 million square feet.

San Clemente also is enjoying a resurgence. Sunstone Hotel Investors Inc. and Metagenics Inc. have moved into new headquarters, and the U.S. Food and Drug Administration has built a regional office there. Moreover, the 400-acre Rancho San Clemente Business Park has less than 25% of its space left, said David Lund, who heads the city’s economic development department.

Next year, developers are expected to open the first phase of the Talega community, a mammoth project of 5,000 homes, a golf course, retail shops and an 80-acre business park. In addition, another developer is securing the final permits to build 1,000 more new homes, Lund said.

Along the northern coast, in Huntington Beach, the city’s downtown area is in the midst of several renovation projects that officials hope lead to a rebirth.

Launching one of its biggest redevelopment plans ever, the city reworked its pier area, where restaurants were built along with a 300-seat amphitheater. On Main Street, a new batch of stores, offices and townhomes is planned. And next year, Hilton Hotels will start constructing a 517-room hotel and conference center next door to a 300-room resort the company already operates.

Away from the waterfront, Huntington Beach Mall announced it would convert into an open-air shopping center and get new tenants, including a 22-screen movie theater. The city is exploring shuttles or other means of linking the two areas.

“We’re going to broaden the appeal of downtown,” said David Biggs, the city’s economic development director. “There are not many active downtown areas where you get a strong flavor of a beach community.”

While the Fullerton area has large industrial sites that can be redeveloped into homes, and a downtown that’s increasingly gaining notice, Brea, on the northern border, has been attracting more corporations. The Perrier Group and Avery Dennison Worldwide Office Products moved there, while Ericsson Inc. also is moving into a sizable project.

It has become popular for insurance and finance firms because they can draw from a labor pool spanning three counties. Largely as a result of its location, a recent survey showed Brea Mall trailed only South Coast Plaza and Fashion Island in sales among Orange County malls.

In addition to these emerging hubs, there’s one more large land tract that will become a major development. It’s El Toro, the Marine base being vacated next summer in South County.

Even if it isn’t used for an international airport as proposed, scarce land in Orange County assures that another hub will be created, those who study urban development say. When that happens, the cluster of offices, shops and entertainment may develop a new twist. But it will probably bear a strong resemblance to the ones seen today in Orange County, they said.

Even then, in Southern California’s car culture, hubs will continue defining the county and directing its growth. “Californians are wedded to their cars,” said G. Christopher Davis, director of the real estate program at UCI’s Graduate School of Management. “And that will continue the viability of nodes.”

* A VIEW FROM ON HIGH: A look at how Orange County hubs shape business patterns and the landscape. A12

About the Series

Beyond 2000 is a series of articles that explore how our lives will change in the next millennium. The series will continue on an occasional Monday as The Times Orange County examines what’s in store for the county in such areas as transportation, education, growth and technology.

On the Internet

The Beyond 2000 series and an interactive discussion are available on the Times Orange County Edition’s Web site at https://www.timesoc.com/HOME/NEWS/ORANGE/beyond.htm

LAUNCHPOINT 2000

More information on today’s topic can be found on several Web sites.

City of Anaheim Official Web Site: Peek at Orange County’s future through this site that posts important Anaheim news and developments as well as community resources.

https://www.anaheim.net

The City of Santa Ana: Get acquainted with Santa Ana, which was named the seat of county government in 1889 and which continues to play a central role in Orange County’s government and finance.

https://www.ci.santa-ana.ca.us

Cities & Government--Orange County InfoPages: Explore county communities through this handy guide that includes city government and current demographic information.

https://www.ocsearch.com/cities/occities.htm

Emerging Hubs

Where’s the beating heart of Orange County? Unlike most metropolitan areas which expand from a central city, Orange County has many downtowns, or “urban nodes,” which enable it to grow in a number of directions. Joining some of the original hubs--those around Disneyland, South Coast Plaza and Fashion Island--are up-and-comers like the museum and cultural center in Santa Ana and future sites in South County. These are the building blocks of growth that will determine how the county expands beyond 2000.

Existing hubs:

South Coast Plaza/John Wayne Airport

This hub is considered by many to be the “downtown” area of Orange County. Two office towers are under construction in the airport area, the first in eight years, as the market emerges from a prolonged slump. Henry Segerstrom, who heads the family-owned firm that developed the region’s dominant shopping district, South Coast Plaza, is donating land for a major expansion of the Orange County Performing Arts Center.

Fashion Island-Newport Center

The Newport Beach complex, developed by the Irvine Co., contains a Mediterranean style, open-air shopping center, one of the region’s largest. Ringed by office buildings containing about 800 firms, Fashion Island-Newport Center rivals employment centers such as downtown Memphis.

Irvine Spectrum

Irvine has one of the largest high-tech communities in the nation, and more than 2,000 firms are based in the Spectrum. The final phase of the Spectrum’s entertainment and shopping complex may be launched late next year, expanding the complex’s size to nearly 1 million square feet.

Disneyland/The Pond/Edison Field

This hub is expected to change dramatically in coming years as Disneyland’s investment in a second theme park creates an enormous ripple effect. The new park, costing about $1.4 billion, has become a catalyst for new development not only around Disneyland and nearby stadium areas, but also in Orange and Garden Grove. Disney will remain the key driver of Orange County’s $5.6-billion tourism industry.

Downtown Arts Village/Science Center/MainPlace

Santa Ana officials have had mixed success in turning the downtown area into a draw. But now there is renewed hope that a series of developments, capped by the newly opened Discovery Science Center, a $24-million fusion of learning and entertainment, will lure more people to the city.

Emerging hubs:

Foothill Ranch/Rancho Santa Margarita

In less than 12 years of existence, these fast-growing, master-planned communities already have developed more than 10 million square feet of office and retail space. A business and housing boom is taking place here, as well as in all of South County, driven in large part by new highway development.

Aliso Viejo

Orange County’s youngest community is booming in commercial projects. About 2 million square feet already has been developed for offices and industry, and another 1.5 million square feet is under construction or will be soon. United Parcel Service has built a large regional building, Fluor Corp. opens its headquarters next year and the Summit, a suburban campus of 14 buildings, continues to grow.

San Clemente

Five thousand new homes, plus an 80-acre business park and stores, are expected to be launched next year as the Talega project. Another developer is securing the final permits to build more than 1,000 new homes, city officials said. A shopping center breaks ground next year, several new businesses have relocated their headquarters here and a regional office of the federal Food and Drug Administration is planned.

Huntington Beach

The downtown area has upgraded its pier, adding restaurants and an amphitheater. Hilton Hotels has announced it will build a 517-room hotel and conference center with construction to start early next year. Huntington Beach Mall, roughly five miles away, is expected to be renovated into an open-air shopping center, with a 22-screen Edwards movie theater.

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Information compiled by DARYL STRICKLAND / Los Angeles Times