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.
Andy Grovemen sees opportunity, however
"the
trade area has to be underserved for an entertainment center to work.’’ Ed Latesse,
president of Latessa Corp., a consulting firm currently working with the Simon Group as a
leasing specialist for major entertainment attractions in shopping centers,
(617-864-2800), states "theaters are like gigolos, they will go anywhere as long as
someone is willing to write the check, that’s the danger. Theaters aren’t afraid
to compete. Look at Ontario Mills, AMC and Edwards are across the street from one another
with 57 screens total. The megaplexes are going to swallow smaller theaters, since
megaplexes draw from 30 miles. Movie theaters are not respecting each other’s zones,
eventually they can’t get first run movies and then the center no longer has an
advantage." Ray Talarico, cofounder of Cafe Sci Fi said, "REITs have billions of
dollars set aside for redevelopment of old time malls to bring them into the new
millennium.
Is making entertainment and theme restaurants the fix to these malls for the next ten
years? I don’t know, but it is the fix today. Eighty percent of the proposed or
redevelopment of malls being redone include mega plexes and theme restaurants. Evidently
there is no saturation point for 30 screen theaters."
Critical Aspects of Developing Entertainment Projects:
Entertainment projects typically combine entertainment, dining and specialty retail. Quite often the anchor is a super megaplex cinema, generally with 16 or more screens, drawing from three times the area of a traditional theater of 10 or less screens. Most customers stay a few hours per trip and the key to a successful suburban project is repeat business, where as major SMSAs and urban settings draw from both the office and tourist markets. All of these projects rely heavily on evening and weekend traffic. Family entertainment centers and urban entertainment centers require a higher level of reinvestment dollars to maintain excitement and marketing costs will be higher than a traditional retail center.
The new wave calls for bundling unique entertainment, food concessions, recreation and specialty retail to create a leisure experience for all economic levels and all age groups. Many owners of existing traditional retail settings are looking to the entertainment aspects to revitalize their project or at least continue some cash flow. Examples: recently, Wal*Mart partnered with Regal Cinemas to help with the liability of sitting on dark discountt stores and during 1995 Horton Plaza in downtown San Diego filled its vacant Robinson-May department store with Planet Hollywood and Sam Goody, along with an expansion for a 14-screen United Artist Theater.
A problem with family entertainment centers and urban entertainment centers is that three different components vie for the customer’s disposable income: Experiential consumption - the act of buying an experience; literal consumption through dining, and acquisition consumption where shoppers leave the center carrying an item. Developers of family entertainment centers and urban entertainment centers must offer ambient entertainment in the form of architecture and marketing events and impulse entertainment like carousels, both of which help compel the customer to stay longer.
Another hazard, in offering, in essence, an indoor theme park, is security. One developer curbed teenage mischief by piping in classical music throughout his project. A shopping center developer/operator of family entertainment centers explains, "I have been approached by some developers in Empowerment Zones and I don’t see how these markets can work. You need a high disposable income and inner city locations are impossible to draw this type of customer. I don’t want to worry about what colors the kids are wearing or which way their hats are turned or if they are in a different gang from the kid who’s washing my windows. Most family entertainment centers cater to narrow groups and you can’t mix liquor with true family entertainment centers and you can’t run an arcade like a casino. Another problem in the business is that you have to keep it affordable and a true family entertainment center must survive off the local community."
Another obstacle is the high failure rate of under capitalized entertainment tenants or entertainment concepts that quickly become passe and the retrofitting of space formerly occupied by an entertainment tenant, such as a movie theater. Today, there are alternatives for installing stadium seating. One method is to pour concrete which requires excavating in the event the space needs to be reused by a non-theater tenant. The stacking of concrete blocks or installation of light weight metal frames to create the stadium staging, which can be removed at less expense than excavation, are also alternatives. Other potential problems with urban entertainment centers and family entertainment developments are the massive parking requirements of entertainment tenants.
A major aspect to the success or failure to entertainment projects is the fact that the first half of the 90’s saw tremendous growth in the family entertainment industry with an emphasis on using theme concepts. Americans are often labeled the "throw away society" and have proven this theory to be true in numerous aspects of our culture. Remember the pirate’s theme and think about the image it evokes when you think of theme parks, golf courses, etc. The image does not stimulate most of us to spend hard earned cash. In essence, the newness easily wears off and the thrill is gone. Industry experts use a rule of thumb that every two to three years any entertainment concept needs to be refreshed, sometimes at considerable expense.