Wal-Mart, HomeBase to Anchor Mall : Power center: Foothill Ranch Towne Centre is to be second largest retail operation of its kind in Orange County, after South Coast Plaza.

FOOTHILL RANCH —  Wal-Mart and HomeBase will both open in the Foothill Ranch Towne Centre, a big retail project under construction in south Orange County, developers said Tuesday.

The project is to be the second-largest retail center in the county when completed. Its developers have already signed agreements with department stores Target and Mervyns.

Though the Wal-Mart and HomeBase deals are not finalized, developers said, Wal-Mart, the nation’s largest retailer, has signed up for 125,000 square feet of space, while HomeBase, a home-improvement warehouse chain based in Fullerton, has agreed to take more than 130,000 square feet, making it the largest tenant so far in the project.

“They are both expected to begin construction in October and be open for business in the middle of 1994,” said Dougall Agan, a spokesman for Foothill Ranch, a master-planned residential and business community. “This will have a positive impact on future home sales.”

Agan confirmed that the two retailers have signed agreements but said he could not release details.

Foothill Ranch Towne Centre is in an unincorporated area of the county less than five miles northeast of the El Toro Y interchange. With 1.3 million square feet of space, it is to be the county’s second-largest retail center behind Costa Mesa’s South Coast Plaza, which has 2.1 million square feet.

The project is part of developer Foothill Ranch Co.’s 2,743-acre Foothill Ranch Community, which is expected to include 3,900 housing units.

Foothill Ranch Co. and Pacific Development Group in Newport Beach are developing the $163-million retail project, which is being touted as Southern California’s “largest power center.”

A power center features what retail observers call “category killers”--large chain stores such as Wal-Mart that offer low prices and wide selections.

If the Wal-Mart deal is finalized, Foothill Ranch would be the third Orange County location for the discount retailer. In June, Laguna Niguel officials said the retailer is close to signing an agreement for the Marketplace, a shopping center there. And in July, the city of Anaheim announced that a Wal-Mart will open in the revamped Anaheim Plaza, scheduled to open late next year.

Wal-Mart’s ventures into Orange County are part of a larger company strategy to move into all parts of Southern California. The company is also said to be negotiating for its first Los Angeles-area stores and has had discussions with the city of Burbank.

Wal-Mart Stores Inc., based in Bentonville, Ark., has opened more than 120 stores a year nationwide during the past decade. The retailer has built its success on low prices and friendly service.

“It’s a great launch for Foothill Ranch,” said John Shumway, president of Market Profiles, a real estate consulting firm in Newport Beach. “I think there’s been an ongoing battle between them and Santa Margarita in terms of tenants--kind of like the shootout at the OK Corral.”

Santa Margarita Co. is developing commercial and residential projects in the 5,000-acre master-planned town of Rancho Santa Margarita in south Orange County.

Agan acknowledged that there is some “friendly competition” between Foothill and Santa Margarita Co. as developers try to woo retailers. Foothill has managed to lure Target and Wal-Mart to the same retail center, but it is not unusual for two discount stores to share a location, he said.

“Yes, they are both competitors, but they recognize there is enough of a population base here to support both. They know the regional draw of our location,” he said.

Foothill Ranch Co. is an affiliate of Laguna Hills-based Hon Development, one of Orange County’s largest landowners.