Builder ponders store site

J.H. Synder offers proposals for the old Montgomery Ward site near Bella Terra mall; some on City Council want Costco.Should it be a Costco? Or maybe a used car dealership? How about another mixed-use development, like Plaza Almeria in downtown Huntington Beach?

Developer J.H. Synder is trying to determine what to do with the recently purchased Montgomery Ward building near Bella Terra, the soon-to-be-completed mall.

Like the rest of the mall, the Montgomery Ward building had been an eyesore for more than a decade. When crews started work reconstructing the mall, the old department store sat empty, taking up space on a key chunk of real estate within eyeshot of the 405 Freeway.

The renovation of Bella Terra will be completed by the end of the year, and city leaders are now considering what do with the giant department store next door. J.H. Synder officials recently purchased the property from the parent company, Sears, Roebuck and Co., after years of prodding by the city to do something with the dormant store.

J.H. Synder principal partner Milton Swimmer is currently floating four separate proposals for the space, Councilman Keith Bohr said. Those proposals include:

* A Costco discount store, similar to the one in Fountain Valley.

* A continuation of the mall, with more boutique stores.

* A Carmax used-car dealership.

* A mixed-use development with some retail businesses and 200 or so condominium units.

Among the council members, the mixed-use plan has been the least popular. Because of the way property taxes are configured, the city would gain the least amount of revenue if condominiums were built. Because of the high value of Orange County residential real estate, the developer would make the largest profit from selling condominiums.

Any plan to put condos on the site would need a green light from the City Council. The property is currently zoned for commercial use, not housing.

Bohr said he would prefer another application for the site.

“My preference is a Costco, as long as we don’t have to give away the store to do it,” he said.

Often Costco asks for subsidies from local government to build in town -- either reduced fees or a return of some sales tax revenue. J.H. Synder struck up a similar deal with the city when it first took on the Huntington Beach mall project -- the company gets a portion of the sales tax the shopping center generates in a deal worth nearly $15 million over the next two decades.

“I’m not open to having to subsidize that project,” Councilman Don Hansen said. “Especially now with the project being developed, I don’t see the need to keep throwing cash in there.”

Right now the city is losing money by not having a Costco, Bohr said. A recent analysis of the Fountain Valley store found it generated about $115 million per year; $80 million of that comes from Huntington Beach residents.

“I just want to stop that leakage,” he said. “It will probably take something to get them in, but we still don’t want to get nothing.”