How to Give a Retail Center an Authentic Feel: An Interview with Shaheen Sadeghi of LAB Holdings

August 19th, 2016 |

This is the second in a series of extended interviews Sean Slater conducted when he was writing about “Crafting Authenticity for Retail Destinations” for Urban Land. Here, he shares more of his conversation with Shaheen Sadeghi, president and founder of LAB Holding in Costa Mesa, California. Sadeghi talks about the thinking behind his company’s “anti-malls”: unique, local-feeling urban alternatives to homogenous shopping malls. They include the LAB (a former military night goggle factory repurposed as a retail center), the CAMP (billed as the first “green” shopping center of its kind), the mixed-use SoBeCa Arts District, and the Anaheim Packing District (a citrus packing facility turned into an artisan food hall and event venue).

ELS: Why do you think so many people are looking for a sense of authenticity in the places where they shop and dine?

Shaheen Sadeghi: We’ve gone through a cultural shift in the United States. After World War II, Japan was destroyed, Russia was destroyed, Europe was destroyed. So the United States became the mass-production manufacturing base for the entire globe. You took one thing, and you just rolled it out. This was our mentality for automobiles, washing machines, fast food—everything. That’s how we built our middle class.

And then, after 50 or 60 years of this, mass production lost its appeal for consumers. Most recently, the economic downturn made us a lot more conscious about what we consume and how we consume it. We’re becoming more like the Europeans, who would rather buy one high-quality item than 10 cheap ones. We’re also realizing that, although mass production made us one of the wealthiest nations, we also have paid a price for it—culturally, environmentally, and in terms of our health.

Another factor is transportation. People today don’t want to get in a car and drive from Orange County to Los Angeles to eat. It’s not worth the gas, the time, the commotion. They want nicer restaurants right there in Orange County.

This is the moment for every city in every suburb to think about their own brand. Newport has a different brand from Laguna’s, which is different from San Juan’s. Localization is the way to create that uniqueness. The country as a whole is starting to do this. If I go to Portland, I’m not going to go to a restaurant and order a Budweiser. I want local, hand-crafted beer. If I go to Chicago, I want a real Chicago steak. I’m not going to Denny’s. Every major national fast food chain in this country should be at the drawing board trying to figure out what they’re going to do next. There might be a few exceptions, like Chipotle, but the others are all going to have to retool. Now it’s all about localization, personalization, customization.

ELS: How does LAB go about creating retail environments that feel hand-crafted?

Sadeghi: My in-house rule is that I don’t buy anything out of the catalog. When you’re buying things out of a catalog, your center looks the same as the others. So many of our projects involve local artisans.

Think of the iPhone. The telephone is a very small function of what it does. This little instrument offers so many layers of experiences: emailing, texting, taking photos. I can use it to turn the lights in my home on and off, and I can pay for an Uber ride. Consumers today expect this kind of layering of experiences wherever they go. It used to be that we’d go to McDonald’s, order something, they’d throw it in a bag, we’d eat it. Today, it’s not just about satisfying hunger. People expect the food to be good, they expect the atmosphere to be unique, they expect great service, and they also want to know what’s in the food. Was this tomato brought up from South America, through New Jersey, and shipped across to California, or was it grown locally? How many hormones are in my meat, and does it come from a local, grass-fed cow? And by the way, I want to meet the chef and hear their story. That’s what makes a place special.

Restaurateurs are realizing they can charge more by meeting these needs, because the valuation is not just based on the taste of a burger. The valuation has to do with the story of that burger and everything that comes with—the service and the quality and the environmental or organic aspects.

ELS: Do you think that larger retail development companies could create more authentic-feeling environments?

Sadeghi: Many of the big retail projects are driven by operating income and financing. They’re really not about creating culture or creating community. But in the future, I don’t think developers are going to be able to just buy some land, round up a bunch of national tenants, and move on to the next project. There’s something sad about that, because at the end of the day, local communities end up with poor-quality product.

We do what I call “reverse engineering.” We first look at what we want the product to be.  What does this community need? What does this neighborhood need? What can this building become? And then we follow through with the design. Otherwise, you might as well just build storage units. The old way of doing business is obsolete, when retail is changing so much and so rapidly.

So I think developers are going to realize that they have to create their own retail products in order to be authentic and local. Seven years ago, as a company, we started creating our own retail. We created a vegan restaurant, a wine bar, a coffee shop. We even made our own barbershop. I didn’t wake up in the morning and decide I wanted to run a barbershop—I know nothing about cutting hair. But I knew this project that we were working on needed a barbershop, because barbershops are the new dude spa.

Even if they have the money, my friends don’t get $100 haircuts. They don’t go to salons. They want the classic, old-school barber—25 bucks, you’re out of there, plus it’s a great experience, and you get a shave. There’s conversation, and you can watch the game. It’s a whole different experience. So we wanted to recreate this in downtown Anaheim. We built our own barbershop, because I wasn’t going to wait around to find the right salon chain at the International Council of Shopping Centers conference. It’s easier for us to do it on our own.

Posted In: Blog, Retail & Mixed Use

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