By Eric Engelbert
The End of a 50-Year Landmark
If you drove past the corner of El Toro Road and Laguna Hills Mall Road in the last couple of years, you watched a piece of South Orange County history disappear. The Laguna Hills Mall, which opened in 1973 and operated for 45 years, has been completely demolished. The 867,000-square-foot enclosed mall that once held 120 stores is gone.
What is going up in its place is Village at Laguna Hills, a mixed-use neighborhood being developed by Merlone Geier Partners that will bring housing, hotels, retail, a specialty grocer, green space, and a new community gathering spot to a site that has sat empty since the mall closed at the end of 2018.
Here is the full story: where the mall came from, how it ended, and what Laguna Hills looks like when this project is finished.
Built in 1973 for a Different Era
The Laguna Hills Mall was developed by The Hahn Company and Rossmoor Corporation and designed by Edward Killingsworth, a respected modernist architect based in Long Beach known for Palm Springs residential work and several Southern California projects. The mall cost an estimated $50 million to build and opened in phases starting in the spring of 1973.
It was built in two phases. Phase I delivered 393,000 square feet of retail with 55 stores. Phase II expanded it to 832,000 square feet with 83 stores. At its peak the mall had 120 tenants and four anchor department stores serving a rapidly growing suburban South OC population that had few other shopping options at the time.
For decades it was a true regional center. It was where South County families shopped, where teenagers spent weekends, and where generations of Orange County residents have clear memories. That era is over.
The Anchor Stores: How They Each Left
The Laguna Hills Mall had four anchor tenants over its history. None of them relocated to another local mall. All four exits were driven by corporate-level decisions or chain liquidations.
Buffums was the first casualty. A Southern California department store chain that opened its Laguna Hills location on September 5, 1973 in a two-level, 50,000-square-foot space, Buffums closed in May 1991 when the entire chain was liquidated. The space sat partially repurposed for years, with the second floor eventually converted into a food court that operated from 1994 to 2011.
Sears was the original anchor, opening with the mall in the spring of 1973 in a massive 214,000-square-foot store. Merlone Geier Partners separately purchased the Sears building after acquiring the mall in 2013. Sears closed its Laguna Hills location in July 2014. The national Sears chain went bankrupt in 2018 and has largely ceased to exist.
The Broadway opened in August 1975. Like many mid-century department store chains, The Broadway was eventually absorbed into the Macy’s system, and the Laguna Hills location was rebranded as Macy’s in May 1996. That Macy’s closed in March 2018 as part of a national round of 11 store closures. When Macy’s announced it was leaving, active construction on the mall redevelopment came to a halt, since the plan had counted on Macy’s staying as an anchor.
J.C. Penney opened in 1976 and was the last anchor standing. It closed in October 2018, leaving the mall with no anchor tenants at all. The mall itself closed for good on December 31, 2018. Exterior pad stores remained open after the interior enclosed mall shut down.
Simon Property Group: From Laguna Hills to Brea
Before Merlone Geier Partners took over, the Laguna Hills Mall was owned by Simon Property Group, one of the largest mall operators in the country. Simon sold the property to Merlone Geier in May 2013 for $110 million as it became clear the enclosed mall model was no longer sustainable at this location.
What makes that transaction interesting to watch now is what Simon is doing with Brea Mall just up the 5 freeway. Rather than selling, Simon is leading the redevelopment of Brea Mall itself, transforming another aging Orange County enclosed mall into a mixed-use project with housing and updated retail. It is the same story playing out with a different cast: a major mall owner navigating the end of the enclosed mall era by either selling or redeveloping to a new use.
We have written about the Brea Mall redevelopment in a separate post. The two projects, Laguna Hills and Brea, are happening roughly in parallel and represent the same broader shift: the conversion of Southern California’s suburban mall inventory into housing and mixed-use neighborhoods.
The Demolition: Fall 2022 Through 2023
After years of planning, revised plans, market disruptions, and the pandemic, demolition of the enclosed mall finally began in the fall of 2022. The majority of the structure was down by February 2023. The Macy’s building, which had been one of the last major structures standing, was fully razed by April 2023.
The site is now cleared. A mall that took years to build and 45 years to operate was gone in a matter of months. For longtime Laguna Hills and South County residents, watching the towers and roof lines come down was a notable moment. The site at 24155 Laguna Hills Mall, once home to department stores and a food court and hundreds of shops, is now a flat development parcel waiting for what comes next.
Village at Laguna Hills: The Developer and the Plan
Merlone Geier Partners, the San Diego-based developer that purchased the property in 2013, has spent the years since working through several different visions for the site. An early concept was called “Five Lagunas.” A 2019 update added more housing. A 2022 plan was approved by the city. And a 2025/2026 modified plan reflects how much market conditions have changed since then.
The executive architect for the project is AO (formerly known as Architecture Orange), an Irvine-based firm that handles the multifamily and mixed-use components of the development. The architectural theme chosen for the entire project is Spanish Colonial Revival, a deliberate nod to Laguna Hills City Hall directly across El Toro Road. The intention is for the new neighborhood to feel connected to the civic identity of the city rather than looking like a generic commercial development.
The project is planned across five distinct neighborhoods within the site, each with its own character but all connected by a central park, walking paths, and internal streets designed for low speeds and pedestrian comfort.
The Housing: A Dramatic Shift From the Original Plan
This is where the project has changed the most. When the City of Laguna Hills approved the Village at Laguna Hills in 2022, the entire housing component was rental apartments only. All 1,500 units were planned as multi-family rentals. There were no for-sale homes in the original approved plan.
The 2026 modified plan looks dramatically different. The total unit count comes in at approximately 1,456 units, slightly below the 1,500 approved in 2022, but the product mix has been completely rethought. Instead of a rental-only development, the new plan includes:
- Rental apartments in multiple complexes with dedicated parking structures
- For-sale townhomes with individual garages
- For-sale single-family detached homes
Going from a rental-only project to one that includes for-sale townhomes and detached single-family homes is a meaningful change for South OC buyers. The shift was driven by direct requests from the community and City Council, and it reflects a straightforward market reality: there is strong ownership demand in this part of Orange County that a rentals-only development would have left completely unmet.
The project also includes 200 units of affordable housing targeted specifically at seniors and veterans. Rather than scattering affordable units throughout the project over many years, the revised plan consolidates all 200 units into a single dedicated building constructed in one phase, so all units become available at once. The affordable building will be financed with low-income housing tax credits and tax-exempt bonds, with no additional subsidy required from the City of Laguna Hills. Rents will average 60% AMI with no fewer than 100 units at the low-income level. A non-profit operator will provide onsite services for residents.
If you are interested in homes for sale in Laguna Hills, this development will eventually add meaningful for-sale inventory to a city that has had relatively little new construction.
Retail, Hotels, and What It Means for the City’s Budget
The retail component has been trimmed and refocused compared to earlier plans. The current version calls for approximately 165,000 square feet of retail, down from earlier proposals that reached 880,000 square feet. The focus has shifted from traditional retail square footage to experiential retail: restaurants, shops organized around a central park, and a specialty grocer that was added to the revised plan to give residents a walkable daily errand option.
The cinema that was in the 2022 plan has been removed. Theater chains nationwide have struggled with the rise of streaming services, and Merlone Geier made the call to pull it rather than build a tenant that may not be viable long-term.
Instead, the entertainment energy is being redirected to outdoor space. The Village Park will serve as the community gathering point with a performance stage, a children’s play area, a dog park, holiday events including tree lightings, and a Festival Street designed for food truck events, art shows, and music. The park has been relocated in the revised plan to be visible from El Toro Road and adjacent to the nearby medical center, giving it better street presence.
On the hotel side, the project now includes two hotels totaling approximately 240 rooms, up from the single 100- to 150-room hotel in the original plan. Two hotel brands have already committed to the locations. One of the hotels is specifically targeting a 2028 opening to capture visitors coming to Southern California for the Los Angeles Olympics. The city stands to collect approximately $2.3 million per year in Transient Occupancy Tax from the two hotels, about $900,000 more annually than the one-hotel plan would have generated. For a city that lost significant sales tax revenue when the mall closed, that TOT revenue is an important part of the financial equation.
The revised traffic plan is also notably improved. The new configuration generates about 25% fewer daily traffic trips than the 2022 approved plan, driven largely by removing the office component and the cinema, both of which were high-traffic generators.
A Question Worth Asking: What About the Existing Hotels?
The city’s enthusiasm for two new hotels is easy to understand when you look at the TOT numbers. But it raises a legitimate question that has not received much public attention: what does adding 240 rooms do to the hotels already operating in this corridor?
Laguna Hills currently has four hotels within city limits: The Hills Hotel, the Laguna Hills Lodge (121 rooms on Paseo de Valencia), a Comfort Inn, and a Courtyard. Just up El Toro Road, the Ayres Hotel Laguna Woods adds another 139 rooms. The total existing supply in this immediate market is roughly 500 to 600 rooms. Adding 240 rooms from the Village at Laguna Hills means the local supply increases by approximately 40 percent in one move.
That would be a significant addition in any market. In a market like this one, it is worth examining more carefully. The El Toro Road corridor is not a leisure destination. It does not draw tourists the way Laguna Beach or Newport Beach does. Demand here is driven primarily by business travelers visiting nearby office parks, medical center visitors and families of Saddleback Memorial patients, and sports tournament overflow from Irvine venues. That is a narrower and less elastic demand base than a coastal resort market.
The developer has pointed to the 2028 Los Angeles Olympics as a demand driver for the hotels, targeting a 2028 opening for one property specifically. That may capture some business during the games, but the Olympic venues are concentrated in Los Angeles and Inglewood, not South Orange County, and that demand is temporary. The question is how the hotels perform in the years before and after the games on ordinary weeknights.
It is telling that when the original 2022 plan included just a single hotel with 100 to 150 rooms, residents submitted public comments opposing even that. A petition specifically asked the city to reject the hotel entirely, arguing the area did not have the demand to support it. The city approved it anyway, and then the revised plan doubled down with a second hotel. The motivation is clear: TOT is one of the few revenue streams a city can count on from a hospitality tenant, and Laguna Hills has been looking to replace the sales tax revenue it lost when the mall closed.
The cost of that decision is likely to fall on the operators who have been running hotels in this area for years. The Laguna Hills Lodge sold in a recent transaction at roughly $140,000 per room. Hotel asset values are directly tied to occupancy and revenue per available room. A meaningful drop in occupancy across the corridor would put downward pressure on those valuations and squeeze the margins of every existing operator in the market. Whether the two new Village hotels generate enough new demand or simply redistribute existing demand among more properties is the central question, and it is one the city’s fiscal analysis did not need to answer to justify its own revenue projections.
What Comes Next and When
As of mid-2026, the project is in the final stages of city review. City Council approval of the modified plan was anticipated in June or July of 2026. After approval, the project will need another 6 to 12 months for site development plans and building permits before construction of the first phases can begin.
That puts a realistic groundbreaking timeline somewhere in late 2026 to mid-2027 for the first construction phases. Given the scale of the project, it will be built out over many years. The developer has been clear that the full buildout could take more than a decade.
The affordable senior housing building is planned to be delivered as a complete, consolidated phase rather than phased in over time. One of the two hotels is targeting a 2028 opening ahead of the Olympics. For-sale townhomes and detached homes will likely follow in later phases as earlier rental phases and infrastructure are completed.
This is a long-term transformation, not a quick flip. The site that once anchored South County retail for 45 years is now being rebuilt as something completely different. The city is betting that a walkable, mixed-use neighborhood with housing, hospitality, green space, and neighborhood retail will serve Laguna Hills better for the next 50 years than any version of an enclosed mall ever could.
Thinking About Buying in Laguna Hills or South OC?
As the Village at Laguna Hills comes to market in phases, it will add new for-sale housing options to a city that has not seen significant new construction in years. If you want to be updated when for-sale units become available, or if you are looking at existing homes in the surrounding South OC communities right now, our team can help.
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