Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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J U N E 2 0 1 7 / S C T 25 chic, rustic project that would cater to the community, to the neighbors of Lido, Balboa Island, Newport Beach and Orange County, and deliver some- thing really unique," said Miller. Real- izing that vision, though, took longer than Miller had anticipated. "These are really hard properties to get right," he said. "You have to be patient, and they are really expensive, so you have to have patient capital. You have to have a very committed vision to the plan." There were other challenges as well. "You have to understand one thing about these buildings: You never know what you're going to find," Miller said. "We had massive infrastructure issues, electrical issues, drain issues, the sea wall had been undermined. It's not for the faint of heart when it comes to these old venerable buildings." One simple solution for many an old building is to tear it down and start anew, but that was not an option in this instance. "It's a heritage property, so we were prohibited by the Coastal Com- mission and by the city of Newport Beach from doing any sort of signifi- cant physical renovation," said Miller. "We just brought it back to its former glory. We created a new color palette, added a lot more wood, lighting, land- scaping and walkways." Infusing the SoCal vibe into the re- development was essential, Miller says. "It's the water and sunshine, a casual- ness attributed to the Southern Califor- nia lifestyle," said Miller. "It's a genuine lifestyle, so if you can incorporate that aesthetic into an on-site experience with landscaping, good architecture, great finishes, layered with views and the sounds and just the essence of the ocean, it's powerful." Selling potential luxury retailers on the finished product took some effort. "To gain leasing traction, we had to prove to the market that we were defi- nitely going to radically change and improve the property," said Miller. "But it's really hard to lease space when the space hasn't been touched for 30 years. It's really hard for a lot of these tenants catalyst for the project's leasing success, Miller says. "They had the vision, and they got it immediately," he said. "The driver today in these centers is food — food is definitely the new fashion. As a consequence of the Nobu deal, that probably accelerated our whole leasing program." Including Nobu's 12,000-square- foot site, the project consists of about 30,000 square feet of food-related space, or roughly 25 percent of the total gross leasable area. "When you see how you can take a dilapidated old building and be standing on the sec- ond floor of Nobu and looking at the atmosphere and the energy that Nobu created, it's extraordinarily exciting to be a part of bringing something back to life in such a glorious way," said Miller. The project's second phase will see the rebuilding of the marina over the next two years. For now Miller is ex- cited to see the Lido back in business. "It took us two years longer than we thought, and we spent many, many millions more than we anticipated, but we've delivered an extraordinary asset," said Miller. "You only have one shot at a first impression, and we figured we better be patient to get it right, and so we spent probably a year more than most developers to get it right. You've got these prized assets and you just don't want to compromise." n TIMELINE 1971 Lido Marina Village opens 2009 Vornado Realty Trust buys the property 2013 DJM Capital Partners buys the property November 2016 The renovated property's "soft" opening, with five stores April 2017 The grand opening of the Nobu restaurant at the property, along with 25 co-tenants, plus an additional half dozen stores scheduled to open this summer to get the vision, but we slowly over time showed them the potential for this beautiful, rustic and authentic space." In the end, the pitch did resonate with an impressive group of luxury retailers. Today the center is about 90 percent occupied, with mostly local tenants, including home decor and housewares store Serena & Lily, eyewear seller Warby Parker and French fare bistro Zinqué. "Most of our tenants are privately owned, one or two stores in the Southern California marketplace, for the most part, and that's their pas- sion, that's their focus, that's where they have their capital, and that's where their success is," said Miller. "Sales at the property are just off the charts." The addition of Japanese restaurant chain Nobu, a concept of star chef Nobuyuki Matsuhisa, proved to be the