Mixed-Use Masters
OliverMcMillan has concentrated on mixed-use projects throughout its 29-year history. Now, the company is busier than ever and has a new roster of projects it is developing.
Randall Shearin

(left to right) David Bouquillon, Paul Buss, Dene Oliver, SCB Publisher Jerry France, Bill Persky and Jim McMillan.

The roots of OliverMcMillan go back more than 45 years, when Dene Oliver and Jim McMillan were undergraduate students in urban planning at the University of California, Berkeley. The two classmates both went their separate ways at first — Oliver to practice law and McMillan to his family’s real estate business. Then, 29 years ago, they decided to form OliverMcMillan, a development company focused on urban opportunities. The company has concentrated on mixed-use projects, which were at first small, but have grown to include major developments over the years. The company has $2 billion under development currently and is working in San Diego, Los Angeles, Ontario, the San Francisco area, Seattle, Chicago, Denver and Houston.

Shopping Center Business recently met with executives from OliverMcMillan at the company’s headquarters in San Diego. While there, we met with Dene Oliver, CEO; Jim McMillan, chairman; Bill Persky, chief financial officer; Paul Buss, president; Jim Reynolds, senior vice president; John Shaw, managing director; David Boquillon, senior development director; Brian Cornellius, senior development director; and Charlie Hickcox, senior development director. The five principals of the company are McMillan, Oliver, Persky, Reynolds and Buss. Each principal has his own area of expertise. The backgrounds of the five principals are legal and business (Oliver), business (McMillan), accounting and finance (Persky), development (Reynolds) and architecture and development (Buss).

Mixed-use is the key to OliverMcMillan’s developments. Most of its projects involve retail on the ground floor, and office and multifamily stacked above that. The projects are either urban or create a suburban town center area.

“Virtually everything we are doing is mixed-use,” says Oliver. “We use urban planning principles with everything that we do. We’re using real streets, real sidewalks and creating a village. We don’t do ‘play’ main streets.”

In addition to development, OliverMcMillan also has asset management in-house. Legal, accounting, design, construction and most leasing is handled by third party consultants. OliverMcMillan has a long relationship with CB Richard Ellis, who handles most of the company’s project leasing. A single national coordinator at CBRE handles the relationship and builds teams in each market to work on OliverMcMillan’s projects. So, as the company gets a project in a new market, it already has a leasing team with retailer relationships assembled and ready to work on the project.

Over its history, the company has developed more than 8 million square feet of real estate. To look to the future, the company often turns to its (and others’) past projects for guidance.

“We really look to the past to see the future,” says Oliver. “We want to know how what we’ve done in the past is applicable to our new projects. We have to fall out of love with the automobile in the United States. That’s one of the things that are driving our urban developments now. We’re trying to deliver more and appeal to all the senses.”

OliverMcMillan is developing The River Oaks District, a major mixed-use development in the Uptown-Galleria district of Houston.

In Houston, OliverMcMillan recently closed on 15 acres on Westheimer where it will build The River Oaks District, a major mixed-use development in the Uptown-Galleria district that will have two high-end hotels, 225 luxury condominiums and 350,000 square feet of retail, 200,000 square feet of office and 300 apartments. OliverMcMillan is working with upscale tenants to occupy the retail space.

“It will be the Rodeo Drive of Houston,” says Oliver. “It will create a street scene that is very urbane, complete with outdoor dining. When people have the chance to go somewhere they have greater aesthetics and greater experiences, they will choose that.”

An overview rendering of The Historic Guasti District in Ontario, California.

In the Inland Empire community of Ontario, California, OliverMcMillan is developing a major mixed-use town center called The Historic Guasti District on the site of a former vineyard and winery near the Ontario airport. The area will have more than 225,000 square feet of retail/restaurants, 600,000 square feet of office, 400 residential units and at least two hotels. In all, there will be more than 2 million square feet of development, which is adjacent to Interstate 10 and the Ontario airport.

“The Ontario area is exploding,” says Oliver. “Fifty percent of the people in the Los Angeles area can now get to the Ontario airport faster than they can get to LAX. The Ontario airport is the sole solution for expansion for LAX.”

The Historic Guasti District will be a town center developed on the site of a former vineyard and winery in Ontario, California. OliverMcMillan will incorporate some of the existing buildings. The area will have more than 225,000 square feet of retail/restaurants, 500,000 square feet of office, 400 residential units and at least two hotels.

There will be 30 million travelers per year through the Ontario airport by 2020. The Guasti project will use many historic buildings that the former winery used when it was active. The buildings are built in the California Mission style, and OliverMcMillan plans to leave most of them untouched.

“This will be a district that is just woven into the fabric of the community,” says Boquillon. “The leasing strategy is to find the one-offs restaurants and entertainment venues. We want the best restaurants in L.A. and San Francisco to open their second or third locations, or their new concepts, here. We don’t want chains. We want very unique retailers and restaurants. It will expand our trade area because the tenants are so special that people will visit to have a unique experience.”            

In Everett, Washington, OliverMcMillan plans to create a large scale mixed-use project along the Everett Riverfront. Framed by the Snohomish River, Interstate 5 and a railroad, the site for the Everett Riverfront project is located in an area with strong demographics and a need for retail and housing space. The center will have 750,000 square feet of retail and about 1,200 housing units. There are also 100 acres of wetlands and exercise/nature paths throughout the project.

OliverMcMillan is one of the largest private landowners in downtown San Diego. The company owns over $500 million in real estate downtown, including an excess of 600 loft units and land for another 1,000 units. The company also owns a number of buildings downtown that house venues like Buca di Beppo restaurant, Pacific Theatres,  Ralphs Grocery and Borders Books.

One of the reasons that OliverMcMillan is able to get the kind of work it does is that it is one of the few developers who can take on large size projects in public-private partnerships. Its credibility among cities has become very high, and oftentimes it gets new projects because the mayor of a town where OliverMcMillan has just done a project calls the mayor of a town where OliverMcMillan is in the running for a project.

“If we are going to go out of town to do a project, it is going to be a major project that is going to have a significant impact on that community,” says Oliver. “We are not going to go out of town to build a one-off center or a few small buildings.”

OliverMcMillan also has a significant ownership stake in every project it develops. Its sources of debt capital include large lending institutions like Bank of America, Chase and Wachovia. Its largest equity partner is Principal Financial, but the company also relies on a network of high net worth individuals and venture firms like Baupost.

Every project is different for OliverMcMillan. While the company was developing The Glen Town Center in Glenview, Illinois, it was told over and over that the project couldn’t be done. It was the largest project OliverMcMillan had done at the time, with a cost of $250 million. Today, the redevelopment of the former naval air station is one of the most successful infill projects in the United States. The Glen Town Center is also one of OliverMcMillan’s largest centers, despite the fact that it lies within 5 miles of two of the most successful malls in the Chicago area. Because of that, it had some leasing challenges, but was able to overcome them by finding a number of successful local tenants and then backfill with strong national tenants. One coup for the center was landing Von Maur as the anchor tenant. After that, leasing fell into place. Other nationals, like Starbucks, Dick’s Sporting Goods, Bravo! Cucina, Ted’s Montana Grill, and Ann Taylor Loft, are also located at the center. The best regional tenants, like Cameron Mitchell Restaurants, Potbelly Sandwich Works, Red Star Tavern, The Book Market, and Crown Theaters took space at the center, creating an attraction.

At The River Oaks District in Houston, which will be the company’s second largest project in its history, the opposite situation is occurring. There are a number of luxury tenants who want to be in the market, in a street setting.

“We’re working with a number of tenants from Madison Avenue and Rodeo Drive,” says Oliver. “We will really have a New York emphasis, so we will be recruiting the best from the city.”

The mixed-use Lindenhurst Village Green will be comprised of 461,000 square feet of retail and 838 residential units.

OliverMcMillan is currently working on its second project in the Chicago market, Lindenhurst Village Green in Lindenhurst, Illinois. Average household income in the area is over $87,000 within a 5-mile radius and is expected to increase 14 percent over the next 5 years. The mixed-use development will be comprised of 475,000 square feet of retail and 838 residential units. A major book store, upscale grocer and department store are anticipated to anchor the retail component of the center.

Ballpark Village in Fremont, California, will have 720,000 square feet of retail surrounding the stadium, as well as restaurants and a cinema. OliverMcMillan is also developing more than 5,000 spaces of structured parking. About 340,000 square feet of residential space (300 units) will sit atop the retail space and parking structures.

In Fremont, California, OliverMcMillan is developing a unique project that will center on a new baseball stadium. Ballpark Village will have 720,000 square feet of retail surrounding the stadium, as well as restaurants and a cinema. The company is also developing more than 5,000 spaces of structured parking. About 340,000 square feet of residential space (300 units) will sit atop the retail space and parking structures.

One of the differentiating factors that makes the company’s projects different is the fact that it uses a charette process to create the design of its developments. It brings in a number of architecture firms to its office in San Diego. Each firm is asked to present, with the other firms present. Some ideas may be used from other firms by the selected firm, with collaboration credit given.

“Our projects are very custom built,” says Buss. “Between the competition in the market, the desires of the community and the land configuration, each project has its own characteristics. Each time, you are doing a different mix. Sometimes it’s more local, sometimes it’s more national.”

OliverMcMillan has primarily stuck to the Western U.S. with additional projects in Chicago, Houston and Denver. The company has no plans to expand east of Chicago in the immediate future.

“We’re living the vision we had 29 years ago,” says McMillan. “This is what we set out to do when we started the company.”


©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.