Arbor Day

Orange County Business Journal, May 5-May 11, 2008 by Cruz, Sherri

El Toro Road Fix Gave Way to Stores, Eateries at Lake Forest's The Arbor

To revive Lake Forest's commercial hub, the city first had to fix El Toro Road.

The stretch of road, from the San Diego (1-5) Freeway in Muirlands Boulevard to the east, long had been an eyesore, and a congested one at that.

It was home to a Kmart building that sat empty for years. Shopping center Saddleback Valley Plaza was half full at best.

In the late 1990s, the city of Lake Forest set about taking control of the road from the county. Then, with $33 million from sevenil sources, it made El Toro wider, added turn lanes, crosswalks and sidewalks and landscaped the median. The makeover was finished in 2006.

Sprucing up the stretch and easing traffic spurred developer interest in the area, now called The Arbor on El Toro.

Since, two major retail developments-Home Depot Center and The Orchard-are open and full of stores.

Getting to this point hasn't been easy. And there's still more to be dune. Several smaller retail plazas within The Arbor could use some mention. Luring back shoppers who long ago bailed for Irvine and Mission Viejo has been slow.

"It's taken a little bit more time than expected," said Gary Wright, owner of Dana Point-based Killer Dana Surf Shop, which has a store at The Ochard.

In the past three months, Wright said he's seen a marked improvement in business: "It's started to take off."

That's no thanks to the economy, in which retail has been among the wounded.

"The economy is hurting all the way down," said Greg McClelland of GDM LLC, partner in Home Depot Center, which is anchored by the home improvement chain with nearby smaller mom-and-pop stores and restaurants, among others.

Until the price of gas is under control and the presidential election is sorted out, people will continue to be anxious, according to McClelland.

Some businesses are doing well, such as health clubs and restaurants, he said.

Boneheads, a fish and chicken restaurant at The Orchard, is full to the gills at lunch, serving the area businesses. It's defied a dining slowdown by filling a gap in the area by serving the nearby El Toro Medical Complex and the Muirlands Medical Group. Most of the meals at Boneheads are less than $10.

"We've been doing really, really well," Boneheads manager Cesar Arambula said.

The Orchard's owner, Westrust Ventures LLC, based in San Francisco and Calabasas Hills, recently sponsored an "exploration day" at The Arbor, along with the city and Kroger Co.'s Ralphs.

The event drew several thousand people, said David Belmer, assistant city manager.

City Wants More

The city is hoping newer developments inspire renovation at some older properties, he said. As the newer centers draw shoppers, it could force others to renovate.

New projects will have to meet the city's agrarian theme for the area, which reflects Lake Forest's farming history. Much of the land in the commercial corridor is owned by family trusts going back 100 years, when the county's industry was citrus farming.

"The area has really defined itself and made redevelopment possible," said Charles Smith, co-managing partner of Westrust Ventures.

The Orchard, a 275,000-square-foot shopping center across from Home Depot Center, cost $80 million to build and is the largest within the Arbor, covering 25 acres.

The Orchard has a mix of national and local retailers-clothing stores, service businesses and plenty of restaurants. Men's Warehouse, Blink hair salon, Cold Stone Creamery, Johnny Rockets, Corner Bakery and WineStyles are some of the retailers. Anchors include HomeGoods, Ralphs, Pier 1 Imports and Staples.

The Orchard has Craftsman-style buildings and plenty of trees, bushes, flowers and a garden.

When the city solicited input on the project, residents said they wanted a gathering place that reflected the city's agricultural history, Belmer said.

The Orchard took the place of Saddleback Valley Plaza. Part of the challenge of redeveloping, according to Westrust's Smith, was acquiring the land, which was owned by different family members.

"In the past, that has been a real obstacle to redevelopment in that area," he said.

Westrust had to negotiate with different owners, one parcel at a time. That led to building the center in chunks. The first phase, which included PetSmart, HomeGoods and Shoe Pavilion, opened in summer 2006. The rest opened in 2007 and this year.

Smith said he was happy not to build another Mediterranean-style project, like those found throughout South County.

A smaller parcel next to The Orchard near Muirlands is another future retail site. It's owned by the Prothero family.

Prothero Enterprises President Jim Potter-his grandfather was a citrus farmer on the land-is building an 8,400-square-foot, five-tenant building, which will have a Panda Express, Wahoo's Fish Taco, a dental office and Golden Spoon Frozen Yogurt. One spaced is yet to be leased.

Potter said he expects it to open later this year. Architecturally, it will blend with The Orchard, he said.

"It will look almost like one project," he said.