MCA’s CityWalk Has ‘em Strolling in the Aisles : $100-Million Mall Appears Winning Mix of Glitzy Shops and Restaurants
In the nearly three weeks since it opened, MCA Inc.’s Universal CityWalk has proven that a large number of people will drop by a shopping mall where they can have their fortune told, sip drinks on a fake beach, eye an Andy Warhol artwork or tour a rain forest exhibit.
Now for the real test of whether the $100-million mall--a high-tech facsimile of Los Angeles city streets--can sustain crowds once the initial fanfare subsides, and entice visitors to leave lots of cash in the tills of tenants paying the mall’s higher than average rents.
Many retail specialists, who praise the mall’s glitzy, neon storefronts and mixture of offbeat retailers and popular restaurants, think it is a winner.
“For that project, I don’t see any risks,” said Deborah Simon, senior vice president at Melvin Simon & Associates, an Indianapolis shopping center developer that is a partner in two other splashy retail projects: the Forum Shops at Caesars Palace in Las Vegas and the giant Mall of America near Minneapolis.
“It’s something I would have done if I had the land,” Simon said.
Lawrence D. Spungin, president of MCA Development Co., said CityWalk--built atop a hill in Universal City--will draw many of the 4.5 million tourists who annually take the Universal Studios tour next door.
CityWalk is also expected to draw traffic from the busy Cineplex Odeon Theaters at the other end of the shopping promenade, and from the Universal Amphitheater. The two venues attract a combined 2.5 million ticket buyers a year.
But Spungin said he has been pleasantly surprised at the throngs of people who have visited just to see CityWalk. MCA originally estimated that CityWalk would attract 1 million visitors a year, apart from those stopping by while visiting other Universal City venues.
“I don’t necessarily want to alter that projection just based on a couple weeks’ experience,” Spungin said. “But it certainly does seem that if things continue, we’ll exceed that number significantly.”
MCA, a subsidiary of Japanese consumer electronics concern Matsushita Electric Industrial Co., also owns and operates six of CityWalk’s 40 shops and restaurants.
Certainly, CityWalk’s merchants need to generate significant sales to justify MCA’s rents, which at $4 to $7 per square foot a month are higher than at any other retail center in the San Fernando Valley area. Even at the upscale Glendale Galleria or Northridge Fashion Center, monthly rents average $2.50 to $5 per square foot, said Michael Lushing, vice president at commercial real estate broker CB Commercial in Sherman Oaks.
A good sign for CityWalk is the report of strong sales from retailers at Caesars Palace’s Forum Shops, which charges rents comparable to CityWalk. The Roman-themed complex, which opened a year ago, is considered by retail specialists as the most similar to CityWalk in its melding of shops and entertainment. Simon said that demand for space there continues to outstrip supply.
Some see other risks. MCA is counting on CityWalk to attract a large local crowd. The big numbers experienced so far might dwindle as the novelty wears off.
“No one is going to drive there just to buy a dress,” said Elena Butorac, Los Angeles regional director for the Hahn Co., a La Jolla, Calif.-based shopping mall developer.
Locals might also rebel against the confusing parking arrangements for CityWalk. Parking costs anywhere from nothing to $5, depending on when and where a visitor parks, merchant validations and the length of stay.
As for tourists, the danger is they might gawk more than shop. A 4-foot-tall baby bottle from the Think Big gift shop wouldn’t fit easily under a plane seat. Much of the merchandise is pricey: Current Wave has $60 women’s T-shirts; an overalls-and-shirt set for a toddler at Uniquely Kids is $64. A small yogurt with a dozen berries costs $3.10 at Yo-Gert.
But most observers consider these risks minimal, and CityWalk merchants, who have signed leases for a minimum of five years, uniformly gush over the customer response so far. “There are more people than we know how to deal with,” said Juli Erickson, director of the Martin Lawrence Museum Shop.
Ivor Sack, owner of the Upstart Crow bookstore and coffeehouse, and Kathy Monkarsh, co-owner of Jody Maroni’s Sausage Kingdom, both say their sales at CityWalk are easily doubling those at their other locations. “The response is beyond our wildest expectations,” Monkarsh said.
