With due diligence, Henry Segerstrom hired a shrewd and politically sensitive land-planning consultant in 1962. C.J. Segerstrom & Sons, led by Henry Segerstrom and the consultant, lobbied to have the state highway planner reroute the southern section of the San Diego Freeway through Segerstrom property, the future home of the retail site they planned to develop. Although the area was still predominantly a farming community, Henry Segerstrom understood that a realignment of this major highway through his family’s property would further the family holdings into the future economy of Orange County and set the stage for considering still other uses for its properties, such as cultural and entertainment amenities.

Plans for building an enclosed retail shopping center progressed in tandem with the construction of the new freeway between Los Angeles and San Diego. The latter would enable hundreds of thousands of county residents to be within a 30-minute drive of the retail center. Once prestigious anchor stores were secured for the first phase of the center’s plan, Henry Segerstrom began to interview architects for the project, settling on Victor Gruen Associates, a firm that pioneered shopping mall design. Established in Los Angeles in 1951, the firm was the first to design and build a completely enclosed, air-conditioned shopping mall in the United States.

The first planned section of South Coast Plaza was designed with removable panels that would enable the center to be extended and expanded if needed. The design and development of South Coast Plaza was undertaken with an exceptionally large-range point of view for expansion and a long-term ambition to be the largest and most successful retail center in America. In turn, these decisions and commitments would ensure a prosperous future for the residents of Orange County.

South Coast Plaza opened to the public In March 1967 and almost immediately began to enlarge. After six years, the shopping center had approximately seventy specialty stores and then expanded further in 1973 with the construction of South Coast Plaza Village, bringing restaurants, more shops, and cinemas into the overall complex. When a hotel was built in 1975 and a park was created in front of it, the nucleus of the 77 acres was formed and a master-planned South Coast Plaza Town Center was realized.

“Rents for retailers are high at South Coast Plaza but they are “carefree rents.” Henry Segerstrom defended this position, noting that the Segerstrom firm employs its own security and maintenance teams. Each year South Coast Plaza maintained a marketing budget of $10 million or more and spread its advertising over a 100 mile radius in California and the West Coast, as well as marketing efforts internationally. Tenant stores paid for common fund expenses that included lighting, air conditioning and other facility items. The reasoning was that if business thrived, everyone one would share the bounty with the Segerstrom firm through a percentage rent system. That is, if a store’s sales went above an agreed target, a further rent was charged on the higher totals.

Although the Segerstrom family were successful farmers and developers, in the early 1960s they did not have the financial resources to build such a large shopping center. The credit limitation on the family business was approximately $850,000. The father of Brad Lundberg, a fraternity brother of Henry Segerstrom’s at Stanford University, was Louis Lundberg, then head of the California Chamber of Commerce. Louis Lundberg would become chairman of the Bank of America with offices in Southern California. Henry Segerstrom negotiated credit from the Bank of America through Lundberg and was offered a $5 million loan to proceed with the project. The terms were with a fixed interest of 5½%.

In December of 1962, Robert Clements, the architect who had designed the Segerstrom family office building in Santa Ana, informed Henry Segerstrom that Sears was looking for a new store site. Segerstrom and his land-planning consultant, Ted Adsit, met with John Wadham, the Western real estate manager for Sears and learned Sears was indeed interested. The chain store had recently completed a shopping center in Buena Park, 22 miles north and east of Costa Mesa. Sears also asked May Company to join it in the proposed Costa Mesa shopping center project.

During the early study phase, Henry Segerstrom hired Larry Smith, a land development economist from Seattle and his associate, Jerry Rogers, to analyze the economic situation in Orange County. They understood that the market in Orange was quickly growing and Henry Segerstrom decided to build and to increase the initial size of the project by an extra 100,000 feet for future expansion.