Zombie mall set for new life with housing in South OC

$130M project at Laguna Hills Mall envisions largest mixed-use development in South OC in years

Renderings of the Village at Laguna Hills at 24155 Laguna Hills Mall with Peter Merlone of Merlone Geier Partners (Merlone Geier Partners)
Renderings of the Village at Laguna Hills at 24155 Laguna Hills Mall with Peter Merlone of Merlone Geier Partners (Merlone Geier Partners)

The defunct Laguna Hills Mall will soon be redeveloped into 68 acres of open-air shops, restaurants, offices, apartments and a hotel.

Merlone Geier Partners, based in San Diego, has won approval from the City of Laguna Hills for a revised mixed-use plan to redevelop the shopping mall at 24155 Laguna Hills Mall, the Orange County Business Journal reported.

Hotel Laguna Renderings (Merlone Geier Partners)

The $130-million project, now called Village at Laguna Hills, calls for four towers containing a total of 465,000 square feet of offices, 250,000 square feet of shops, restaurants and a cinema, a 150-room boutique hotel, and five 1,500 apartments, including 200 offered at affordable rates.

The plan for the development along the San Diego Freeway around El Toro Road replaces a proposal known as Five Lagunas, which called for nearly four times as much retail space and far fewer offices and apartments.

Although the pandemic caused a surge in remote work, the developer is “bullish” on the potential for future offices in the latest plan.

“There are still major players that need office space in order to commit long-term,” including those in industries such as entertainment and life sciences,” said Stephen Logan, vice president of development for Merlone Geier. “Because of the proximity of this site to San Diego, Orange County and the Inland Empire, it will attract a ton of talent.”

The Village at Laguna Hills would be built in phases over the next 15 years. Construction is expected to begin within the next 12 months, Logan said.

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Merlone Geier bought the Laguna Hills Mall from Indianapolis-based Simon Property Group in 2013 for $110 million. The mall, built in 1973, closed in 2018 when Macy’s and JCPenny shut down their anchor stores.

The mall’s exterior retailers – including King’s Fish House, In-N-Out, BJ’s Restaurants & Brew House and Nordstrom Rack – will remain open during construction, according to Logan.

The first phase, expected to take from five to seven years, includes demolishing the mall and building the hotel, two apartment complexes and 140,000 square feet of retail space surrounding a 2.5-acre park.

The second phase would build the remaining apartments and at least 90,000 square feet of shops and restaurants.

Merlone Geier plans to retain the retail portion of the outdoor village, and to sell the land for the hotel and apartments to other developers.

Plans for the mid-rise office buildings are undetermined. Logan said Merlone Geier is open to either leasing to a tenant that wants to develop the space, entering a joint venture with an office developer, or selling the site altogether.

[Orange County Business Journal] – Dana Bartholomew

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