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Sunday, May 12, 2024

Rivian Debuts Downtown Laguna Beach Showroom

Rivian Automotive Inc. is one of Orange County’s fastest-growing real estate players, with a local portfolio now topping 700,000 square feet through a series of deals struck by the $22 billion-valued electric vehicle maker (Nasdaq: RIVN) in recent years.

That expansion now includes a high-profile push into the retail sector, with the firm last month taking the wraps off a flagship showroom in Laguna Beach following a multiyear renovation of the historic South Coast Cinemas along Coast Highway.

It’s a flashy variation for Rivian’s real estate portfolio—which largely includes industrial, R&D and office space throughout Irvine and Tustin—but plays into a new strategy for Orange County’s largest electric vehicle company as it looks to capitalize on new buyer demand in experiential ways.

“We’ve been looking for less traditional expressions of retail, and this is one of the crown jewels of that expressionism,” said Tony Caravano, Rivian’s senior director of customer engagement, who was brought on last fall to oversee the experiential side of the retail pipeline.

These stores mark the start of a direct-to-consumer approach for Rivian, which started rolling out its innovative vehicles to customers in late 2021, and can now be seen throughout California from freeways to driveways to small screens.

Rivian is now showing off its vehicles alongside the big screen at its new Laguna Beach showroom, dubbed the Rivian South Coast Theater.

Historic Flagship

The showroom is No. 11 in Rivian’s retail portfolio—it counts other locations throughout the U.S.—and it’s the largest at 11,000 square feet.

Rivian spent the last two years converting the historic theater into its flagship retail space while restoring the single-screen theater and placing it on the National Register of Historical Places.

The original 129-seat theater area, ticket booth, lobby, balcony and marquee remain, along with the original theater owners’ apartment, which will be used by Rivian employees.

Chief Executive RJ Scaringe “was really excited about what adaptive reuse could mean for a space like this,” Caravano said.

The theater will showcase films through a partnership with Laguna Beach nonprofit Coast Film Foundation, and will showcase its two vehicles, the R1T pickup and R1S SUV, for customers to view, test drive and purchase.

The showroom also includes an Equator Coffees shop, a merchandise store featuring a collaboration with locally based Almond Surfboards and a second-floor meeting space.

EV Hubs

The Laguna Beach outpost sits about 15 miles from Rivian’s Irvine headquarters.
The proximity to Rivian’s core team—and to one of its largest markets—played a large role in establishing the flagship retail outpost in OC, Carvano notes.

He added Rivian scouts retail locations in popular EV hubs—and where EVs are on the rise—as well as cities that are home to existing Rivian owners, such as Laguna Beach.

The Orange County Automobile Dealers Association reported 1,229 Rivian vehicles were registered year-to-date in the region as of October, more than twice the amount from the same period in 2022.

Rivian last month raised its 2023 production forecast by 2,000 to 54,000 vehicles, with officials citing progress on the production lines and its current outlook on the supply chain.

At the Barclays Global Automotive and Mobility Tech Conference last month, Rivian Chief Financial Officer Claire McDonough said the company expects to become gross-margin-positive in 2024 and plans to lower production costs.

McDonough also noted that Rivian plans to manufacture a new, simpler battery pack that could help cut costs and make vehicles more affordable. The R1 vehicles should be updated with the new battery packs in 2024.

The upcoming R2 models, set to start production in 2026, will benefit from the newer R1 upgrades as well.

The R2 vehicle is expected to be revealed later in 2024. The EV manufacturer is currently Orange County’s third-most valuable public company by market cap. Its shares are up about 33% from year-ago levels, though its valuation is well below where it stood after its record-making IPO in 2021.

Retail Ramp Up

Rivian opened its first retail space in Venice in 2021 and didn’t open its second center—a 5,000-square-foot storefront in New York City’s meatpacking district—until last June.

Growth has been in overdrive since then, with nine outposts opening in the months since in Nashville, Tenn.; Chicago, Denver, Seattle, Vancouver, Atlanta, Pasadena and a second in New York City.

It wants to ramp up growth even further, with plans to double the number of brick-and-mortar locations in 2024 with “unique” in-store formats similar to the Rivian South Coast Theater.

The stores will also feature local programming and events to generate traffic.

“We want to think creatively about the space and where people are gathering,” Caravano said.

Local nonprofits will be able to use the Laguna Beach retail center as a venue, and the Laguna College of Art and Design will host family art workshops, among other scheduling in the works.

“We’ve peeled away the formality that can be associated with automotive retail,” Senior Director of Facilities Design and Retail Development Denise Cherry said. Cherry leads the design and architect team for Rivian’s facilities.

“We’re looking forward to using the space for not just Rivian, but for the community,” Rivian’s new Chief Commercial Officer Kjell Gruner, who joined the company in September, said at the theater’s opening event.

“Laguna Beach will be the lighthouse for the brand to the rest of the world,” Caravano added.

Screening New Uses for OC’s Theaters M­iramar in San Clemente

A long-planned redevelopment of the 450-seat Miramar Theater on El Camino Real in the North Beach district in San Clemente is moving ahead.

The 13,000-square-foot theater, and its adjacent bowling alley, was purchased in 2019 by Fortuitous Partners LLC. Miramar Food Hall Real Estate LLC is turning the site into an events venue with a food hall of up to seven restaurants and a 3,400-square-foot outdoor courtyard.

The plans that were originally proposed in 2017 remain unchanged, according to MWC Constructors.

The Miramar Theater originally closed in 1992; construction started last September and is scheduled to be completed in late May.

Back to 1939

Another single-screen theater has been given another chance after closing its doors in 2019.

The Lido Theater in Newport Beach first opened in 1939 and its current owners, the family firm Fritz Duda Co., is working to restore the venue to its original condition.

Plans include reviving the Bette Davis lounge, restoring the art murals, stripping paint from the original wooden frames and matching the original tiles, seats and other features of the theater.

Construction began in June.

Project Manager John Loper said a full restoration for this kind of property is not typically the first choice when approaching a theater space.

With the film industry releasing less products, operations for single-screen theaters like Lido might fare better with a roster of live events and fundraisers to fill in the remaining calendar and appeal to a greater mix of demographics in OC.

“The firm decided that the amount to update the theater into a modern space would cost the same as restoring it back,” Loper told the Business Journal.

Gregg Schwenk, CEO of the Newport Beach Film Festival, is looking to add the theater to the event’s venue lineup once again in 2024.

Improvements in theaters like The Lido or the Newport Theater in Corona del Mar open up opportunities for events like the film festival to draw in even more attendees, Schwenk said.

The festival brought in 50,000 people this year, up from 48,000 in 2022.

“Everyone is looking for a quality experience,” Schwenk told the Business Journal. “People want to feel as if they’ve spent their time and money well.”

The Lido Theater aims to wrap up construction by spring with an anticipated opening in the summer of next year.

Discounted and Demolished

A shuttered movie theater in Brea could make way for new uses.

The Brea Plaza shopping center, located on East Imperial Highway, closed its second-run theater operated by LA-based TriStone Theater Group in 2019 due to discount theaters’ loss of access to blockbuster films, according to owner BOSC Realty Advisors.

Second-run theaters, or discount theaters, are second-in-line to show films a few weeks after opening.

These locations, also known as neighborhood theaters, have a harder time surviving if not surrounded by complementary retail compared to shopping center locations who can generate a lot of traffic for neighboring tenants, according to brokers.

The movie theater was built with the retail center in 1976 and operated as an Edwards location until 2000 when the company went bankrupt and was acquired by the firm that would become Regal Cinemas.

The cinema was then overseen by TriStone until closing in 2019. BOSC first looked to redevelop the 18,450-square-foot space into residential units as part of 2.2-acre development at the shopping center, according to President Waad Nadhir.

The firm planned a complete demolition of the theater in the first phase of the proposed mixed-use project. Nadhir said plans were canceled last year due to pushback from the local community.

The theater is still set to be demolished in the next month as negotiations for a new concept continue.

Nadhir said that a luxury theater operator was considered for a time “but would be a costly proposition to deliver.”

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