Out of Money, Out of Ladera
Once home to Game-On, the leasing space in Mercantile East is now closed and hasn’t had any new stores open there in years.
February 21, 2019
Ladera Ranch has seen more than sixty businesses open and more than sixty businesses close, that’s almost three businesses closing a year since Ladera Ranch’s founding in 1999, according to Irene Vecchione.
Local stores in Ladera are now struggling to obtain customers and pay the high rent.
Many local residents accuse Westar Associates, the company that owns all of the retail space, for causing these businesses to go bankrupt because of the high rent.
“[Westar Associates] doesn’t care about Ladera Ranch, they don’t care about small business,” said local resident, Teri Walters.
Ex-Business owners Irene and Joshua Vecchione knows the struggle of local business. From 2006 to 2009 the Vecchione owned a business called “Toy Town.” After The 2008 Financial Crisis, Westar refused to lower the rent. They, along with many store-owners, were forced to close their doors.
“Westar was very unpleasant to work with,” says Irene Vecchione.
“Ladera used to be a great place for business, but when the economy tanked and the rent stayed the same, many mom and pop stores closed,” said Vecchione.
Even today, the leasings of retail space are higher than the retail space of Corona Del Mar or Irvine. Of the 83 retail spaces owned by Westar Associates in Mercantile East and West, 19 are empty, 22% of all retail space in Mercantile East and West.
Some say that Westar’s insurance policy either completely or partially covers Westar for any empty retail space meaning, even if no one is renting or leasing the space Westar is still making money off of the empty space. “[Westar] either has hedge insurance or they get write offs” said Vecchione.
“I have been made aware of this rumor in the past as have others within our organization. It is unclear to me the foundation of the rumor, however I can tell you unequivocally that there is no such insurance policy in place” said Kam Walton, Vice President of Westar Associates.
“I think a lot of businesses went out because [Westar] wasn’t very flexible. If they had been a little bit more flexible, I think some of those businesses would have made it through the rough months and stayed,” said one current anonymous business owner.
“Depending on the type of business, the highest operating expenses are typically costs of goods and labor, not rent. In any case, the success of any retail business is directly related to sales, not rent and sales are generated first and foremost by the quality of product, service or experience being offered, support of the local community, and competitive marketplace” said Walton.
Some local residents believe that Westar relies on their anchor businesses, Dick’s Sporting Goods, CVS Pharmacy, and Staples, to encourage new companies to go to Ladera. Then, when those new companies can’t afford rent, they move out, and a new company moves in and eventually they move out, continuing the cycle.
“I think [Westar] is not very accommodating. If you can’t afford it, their attitude is get out,” said an anonymous business owner.
Not every store owner agrees that Westar is causing the problems. “We have had a good experience [with Westar], but we have only been here a couple months,” said another current business owner.
Some people may say that Mercantile East and West are an anomaly. Westar Associates also owns Bridgepark Plaza and Terrace Shops where there are very few places that have closed.
“Westar Associates has its own Marketing Department dedicated to help increase sales for its tenants. The department manages the “Shop & Dine Ladera Ranch” website, social media handles, hosts giveaways, organizes community events, creates additional signing opportunities, conducts direct mail campaigns, oversees website listings, promotes the local shopping center in local advertising, and more” said Walton.
Whether it is Westars’ fault for businesses moving out or it is just that these businesses can’t find enough customers, it’s important to know that if you want to support local businesses in Ladera, the best thing to do is shop in Ladera.
