Entertainment Centers
Entertainment
venues coming to a
neighborhood near you in Anywhere, USA.
Billions being built - Billions being spent -
Buzzword of the millennium.
Define it - Why build it - Whose building - Where and why.
The latest buzzword to sweep the industry today is "entertainment centers." However, the definition of what makes an entertainment center an entertainment center differs as developers are building entertainment centers in a variety of locations from downtown districts of major cities to the suburbs to farther out than that. Who will be successful? Where is the best place to build? Who are the best retailers and restaurants to include? The answers vary. Looking at a handful of entertainment centers either being developed or planned to be developed, the common element they all include is a movie theater. The second most common element is restaurants.
Merely grouping some restaurants with a movie theater does not give you an entertainment center. Andy Grovemen, senior vice president of marketing and president of the factory outlet division of Belz Enterprises, explains "an entertainment center is a combination of animated retailers, who understand the entertainment aspect, and entertainment based retailers, including theme restaurants, and an architectural design with an entertainment feel." Mark Stoner, director of real estate of Edwards Cinema said "I can’t define an entertainment center because of today’s loose terminology, but a true entertainment center is defined by uses, such as theaters coupled with night time attractions like restaurants, book stores and concepts similar to GameWorks." Ron Shook, director of planning of LARC, stated "an entertainment center is defined by having attractions for every member of the family." Dennis McMullen, director of real estate of Jeepers explains " an entertainment center is not a collection of retailers with a sprinkling of entertainment concepts. It’s a family amusement anchor, an assemblage of theme restaurants, and a blend of things that families like such as a candy store, miniature golf, toy stores, party stores, etc."
What’s in store for the future?
Iwerks, a manufacturer of ride simulators, sees family entertainment centers as the fastest growing leisure entertainment niche today. The company cites neighborhood theme parks as becoming more sophisticated so adding a broader mix of entertainment is crucial. The marriage of retail and entertainment is generating new attitudes towards high-tech attractions in shopping centers.
Location Based Entertainment sites (LBEs), are changing to being technology driven attractions springing up in urban centers and suburban locales. Most business models for LBEs base their success on repeat traffic, which in turn means constantly updating the center’s attractions. Some industry experts feel the LBE boom is still five years away. Some of the pioneers of the technology-driven family entertainment centers are the Disney Company, Sony and GameWorks, a partnership between Dream Works, SKG, Sega Enterprises and Universal Studios. GameWorks has described itself as a "town hall for the MTV generation." An August 1997 story in Daily Variety reported that Disney earmarked more than $1 billion for the roll out of Disney Quest.
The Experts say...
James Purinton, president of Orix says
"developers are benign brokers in entertainment center development, it’s driven by tenants.’’ Two years ago, we made a strategic decision to develop entertainment centers. Our company has 350 million sq.ft. under development in 12 states, of which half is retail and half of our retail projects will be entertainment centers anchored by theaters. Potential problems in building entertainment centers is the overbuilding of theater chains. Non theater tenants are in these centers because its a good location, but they sign the lease because there is a theater anchor."
Steve Abraham, a partner in Price Waterhouse’s entertainment, media and communications group said in an early 1998 interview, "there are not enough location based entertainment locations out there for anyone to know if consumers have decided that these are attractive venues for their families." A major future concern for theater anchored entertainment centers is the overbuilding of theater chains.
Mark Stoner of Edwards Cinema explains "it is a time to be careful with expansion. Some chains are expanding extremely rapidly and not making the best decisions, however megaplexes are the way of the future for at least ten years." Dennis McMullen sees flexibility "in the market in the event of over building in ten years. New things will come about, but the theaters’ big boxes of today in the 80,000 sq.ft. and up range will allow them the flexibility to make any needed changes."
Frank Meogrossi, director of real estate of Silver Screen Real Estate sees
"for at least the
next ten years, entertainment concepts will show good synergy, but the tourist market is
important for these concepts to remain viable.’’