Designed to attract spending dollars from local residents and tourists, a well-conceived center can provide a much-needed economic stimulus to a declining downtown. Church Street Station, Bayside and the Jacksonville Landing have contributed for more than a decade to downtowns in Orlando, Miami and Jacksonville, respectively.
More recently, Mizner Park has become a major catalyst for downtown Boca Raton, Las Olas Riverfront is bringing residents and tourists to downtown Fort Lauderdale, and West Palm Beach city planners are counting on the long-awaited CityPlace development to have a similar positive impact. On the Gulf Coast, Channelside at Garrison Seaport is now under way in Tampa and construction soon will begin on Baywalk in downtown St. Petersburg.
But all the action isn't downtown -- massive new suburban centers such as Pointe Orlando in Orlando and Shops at Sunset Place in South Miami are flexing retail muscle. Older regional malls and outlet centers are competing by adding new movieplexes, theme restaurants, amusement parlors and other entertainment attractions. Even the mammoth Sawgrass Mills outlet mall in western Broward County, which draws more visitors than any Florida attraction except Disney World, is adding a new entertainment component.
At the same time, local entertainment districts like South Beach in Miami Beach, Clematis Street in West Palm and Harrison Street in Hollywood showcase local merchants, restaurants and clubs, and offer an appealing alternative to mega-centers with look-alike national tenants. In fact, many of these local entertainment districts are being bolstered by new centers; Beach Place and Las Olas Riverfront now anchor both ends of Las Olas Boulevard, for instance. Others, like South Beach, are adding movie theaters to compete with new projects, further blurring the boundaries.
The bottom line: As competition stiffens and the marketplace becomes more crowded, some of today's successful projects may find their markets eroding. And communities hoping an ambitious new entertainment-oriented center will spark a major downtown revival may be sadly disappointed.
A popular trend
Retail entertainment centers are the commercial real estate rage of the 1990s, as developers attempt to lure consumers who shop at home. "Retail developers are trying to capture the attention of the consumer," says Beth Azor, president and CEO of Terranova, a Miami real estate advisory firm. "They have to create some type of entertainment to make people come to the stores."
Retail-entertainment centers also try to capitalize on the limited leisure time available to most Floridians today. "People tend to shop more when they're on vacation or have a little leisure time," Azor says. In one four-hour evening, for instance, a couple could enjoy dinner, listen to live music, pick up a few items for the house and see the latest movie.
In the past, retail entertainment centers have also been successful in attracting free-spending tourists -- one reason south and central Florida have so many of these projects. Domestic and international tourists, as well as out-of-the-area Floridians taking a daytime shopping trip or social night out, have enjoyed the abundance of unique activities offered at these centers.
Another reason for the proliferation of retail entertainment centers is that they are no longer "new" -- the successful track records of a number of projects have made lenders more comfortable with the concept. A decade ago, lenders preferred shopping centers with traditional department store anchors, and pioneer developers like the French firm Constructa, which built CocoWalk in Coconut Grove, needed substantially more equity. Today, lenders are used to seeing projects built around movie theaters and theme restaurants. "There is general acceptance among the lending community that these projects are here to stay," says Ezra Katz, CEO of The Aztec Group, a Coconut Grove investment firm. "That's a big change in the past two years."
But because national lenders tend to like projects with national tenants, a strong national tenant with a successful formula tends to be duplicated in other centers. And when three different centers all have a Banana Republic, a Gap and a Cheesecake Factory, it's difficult for any one to carve out a unique identity.
Municipal governments like retail entertainment centers as well. In addition to generating more property taxes, a popular urban center can change a community's identity. Miami Beach in the early 1980s was perceived as a dreary community of elderly residents. With redevelopment and promotion of South Beach, the city is now seen as an exciting celebrity hangout.
In some cases, municipal governments have helped provide tax incentives or other financial benefits for projects intended to revitalize urban areas, such as CityPlace, which will be built on municipal property, giving the city of West Palm Beach a financial stake in the project. "Public financing is fine if it's available, but a developer won't be enticed to the area simply because of that," Azor says.
Bringing people downtown
One of the newest arrivals on the state's urban entertainment scene is Las Olas Riverfront, which opened in downtown Fort Lauderdale in June. Even before the winter tourist season and the opening of several high-end restaurants, Riverfront was drawing more than 120,000 people a weekend. "We think the numbers will be much higher during the tourist season," says Roger LeBlanc, executive vice president, the Michael Swerdlow Cos., a Hollywood developer. "We haven't begun to really market ourselves to the downtown office buildings yet either."
With a 24-screen movieplex, family and gourmet restaurants, and upscale retailers, Las Olas Riverfront would draw significant numbers of Broward and Miami-Dade County residents, as well as south Florida tourists. But the center's chances of success are greatly enhanced by its location near the Broward Performing Arts Center, the Riverwalk park along the New River and Las Olas Boulevard, a longstanding retail destination. "I think the combination of having a lot of different things to do brings people to downtown Fort Lauderdale," says LeBlanc. "The jazz festival, art shows and cultural events are already there. That's very important."
Four hundred miles north, another riverfront center, Jacksonville Landing, is celebrating its 10th anniversary with a major renovation. "We're just completing a redevelopment program converting about 32,000 square feet of retail into restaurants," says John Kiddy, vice president and general manager of Rouse-Jacksonville, which owns and manages Jacksonville Landing. "We have 70,000 office workers here five days a week, and our studies showed they wanted a destination location, but not retail shopping. We don't have a movie theater either; we've been trying to create that critical mass with restaurants that can't be found in suburbia."
A microbrewery from Charleston, a seafood restaurant from Hilton Head, S.C., and a sports bar from Atlanta are among the theme restaurants at Jacksonville Landing. "We're probably 70% local and 30% tourist," says Kiddy, "but we'll become more tourist-oriented" when the 1,000-room Adams Mark convention hotel opens this year. "These projects are always works in progress."
In downtown West Palm Beach, the Palladium at CityPlace will attempt to build on the pulling power of nearby Clematis Street to bring in shoppers from throughout the county. High-end retailers such as Armani A/X, Vertigo and Dupuis and restaurants like Mezzanote will highlight the project. "We've been moving toward this day for years," says West Palm Beach Mayor Nancy Graham, a leader in the project.
"CityPlace will be an interesting test of the retail entertainment market," says Katz. "Palm Beach has more of a seasonal demographic trend and fewer tourists than Miami-Dade. We'll have to see whether or not the region can support such a major facility. I hope so, because West Palm Beach needs a project like CityPlace."
Differing markets
In addition to adapting to its local market, downtown retail entertainment centers must compete with rival projects in the suburbs. On tourist-oriented International Drive in Orlando, Pointe Orlando offers retail attractions such as Wonderworks, a three-story, 30,000-sq.-ft. science center that looks like an upside-down house. Facing the adjacent Orlando Convention Center is a 40-foot bear in front of the F.A.O. Schwarz toy store. Inside, are an IMAX big-screen theater, a 20-screen movie complex and the NFL Players Restaurant, where football star Tony Dorsett's Heisman trophy is on display. "In Orlando, we compete with Disney, Seaworld, Universal Studios and everyone else," says Chad Martin, president of Pointe Orlando. "You have to catch shoppers here with architecture. Without a lot of 'eye candy,' it's a real challenge."
While Pointe Orlando is situated to attract a high level of tourist traffic, the center's management is taking great pains to "educate" locals about the center. "If I'm a local, I may not feel like fighting the traffic on International Drive," says Martin. "So we tell them how to come up the back way. We also provide schedules of live entertainment, which you just don't find in a traditional mall."
Another suburban project generating attention is the Shops at Sunset Place in South Miami, just five miles south of the CocoWalk/Streets of Mayfair centers. Along with stores like Virgin Records, Niketown and Stephen Spielberg's GameWorks, Shops at Sunset Place has all the eye candy a shopper could want: faux banyan trees that play bird songs, a simulated railroad bridge, artificial architectural ruins and spitting metal lizards. Other attractions include an IMAX theater, 24-screen AMC theater and theme restaurants like Wilderness Grill/Paradise Down Under. "This is a one-of-a-kind project that will appeal to both local residents and the tourist population," says Tom Schneider, Simon Property Group, Indianapolis.
Risk of overbuilding
Although each retail-entertainment center is distinct in some way, the differences between new developments are growing smaller. Many projects now offer a fairly predictable mix of tenants, with only the architecture and interior design providing a distinguishing image. As the retail entertainment concept increasingly dominates new projects, there is a real risk of overbuilding, especially in tourist-oriented south and central Florida. After all, Florida is notorious for letting new retail construction outstrip consumer support.
Miami-Dade County, for instance, already has Bayside, CocoWalk, Streets of Mayfair and Shops at Sunset Place, as well as South Beach. In addition, a new Rouse project with high-end retailing, Village of Merrick Park, is slated for Coral Gables, and a Swerdlow project, the entertainment-oriented Dolphin Mall, is planned west of Miami International Airport.
"The big question is how many centers can one market support," says Azor. "That question goes back to population, income and sales volumes. The projects that will succeed have all three."
Unless new projects expand the retail market -- bringing in new shoppers or encouraging greater spending -- the market may end up cannibalizing itself, with new centers trying to steal shoppers from each other. "There are only a finite number of disposable dollars," says Katz. "As each center opens, (the dollars) become more and more thinly spread."