Too Much Fun?
In a frenzy of optimism over the future of entertainment-based shopping, developers in North Orange County are planning an unprecedented blitz of new construction.
No fewer than six new projects, totaling about 4 million square feet--almost twice the size of South Coast Plaza--are planned, underway or complete.
By comparison, South County--which has hosted the bulk of the region’s growth the last 10 years--is cranking out entertainment centers at only half that rate.
Despite developers’ excitement over shopping/entertainment projects as a new path to consumers’ pocketbooks, some experts say that there could well be a glut of such centers and that not all of them are likely to survive.
“I would think the caution flags are definitely up,” said Paul DeMyer, a partner of Rochilis & DeMyer, a Los Angeles consulting firm that specializes in entertainment real estate.
Indeed, some of the centers now planned have “a big question mark” hanging over them, said Gregory Stoffel of Gregory Stoffel & Associates in Irvine.
“It’s very important that projects have a uniquely identifiable sense of place,” Stoffel said. “That’s going to be a real challenge in the coming years with the emergence of all these projects.”
Among the major projects planned or under construction are the Block in Orange, with its Vans Skate Park and 30-screen AMC movie complex; Sportstown Entertainment Complex in Anaheim next to Edison International Field, which will include an indoor snowboarding park; and Disney Center, a retail, dining and entertainment complex that is part of Disneyland’s larger expansion plans.
Other proposals have serious hurdles to scale before they come to fruition, such as Riverwalk in Garden Grove, which would include amusement-type attractions, a family entertainment center and a 500-room hotel.
Clearly, the concept of blending entertainment and shopping has altered the mind-set of mall developers. Construction of standard malls--those without significant entertainment components--has come to a virtual standstill in Southern California, analysts say.
“I think it’s a cultural trend right now,” said John Konarski, vice president of research at the International Council of Shopping Centers in New York. “Everything is entertainment.”
Some believe that the snazzy newcomers with their flashy game rooms and come-hither options will out-dazzle--and swipe business from--Orange County’s plain-Jane centers.
Possible losers include centers with movie complexes that have six or fewer screens, Stoffel said.
“There are more cinema screens planned than there is market support for,” he said. The smaller complexes will “experience incredible competition, and those will be the first to go.”
Even among the new entertainment-based centers, there will be a tug of war for the consumer’s attention.
“I think the competition will be fierce,” said Judi Lapin, senior vice president for marketing at Donahue Schriber, a Newport Beach shopping center owner and manager. “Regardless of the density, it’s a heck of a lot of competition they’re creating.”
The first to open in the county’s northeast was Stadium Promenade in Orange, next to the Pond. It does not have traditional retail options such as clothing stores.
Instead, the Promenade’s line-up includes a 25-screen theater, a game room, eateries and a collection of miscellaneous shops.
While the theater reportedly is doing a brisk business, the center is not yet thriving. Almost a year after opening, not all of the shops in the small courtyard are leased.
“We’ve just kind of taken our time to get the right tenant mix,” said Rajiv Parikh, vice president of development for Syufy Enterprises, the center’s developer. He is negotiating leases for the last two empty slots.
During the day, the center is fairly quiet, said Andrew Cattaneo, kitchen manager for Kings Fish House, which will soon open there. But by about 5 p.m., the courtyard perks up. And in the evening, the Garage game room is packed. “When I leave at 6 p.m., there’s no parking left,” Cattaneo said.
Soon, however, there also will be game rooms, movie screens and a plethora of other options just 2 1/2 miles away at the Block.
With its Nov. 19 opening date now set, the Block expects 12 million visitors next year, said Jerry Engen, vice president and development director for Mills Corp., which owns both the Block and the sprawling Ontario Mills.
Seventy percent entertainment and dining and 30% retail, Engen thinks the Block will stand out in the crowd.
“We like to say we’re going to have more lights than anything west of Las Vegas,” he said.
The Block’s location, near the interchange of the Santa Ana, Orange and Garden Grove freeways, is either its strong suit or drawback, depending on whom you talk to. While Engen considers the confluence of freeways a bonus to the project, Stoffel said it could spell trouble.
“They have a real headache in terms of access,” Stoffel said. “The [Garden Grove Freeway] is always crowded, and that doesn’t bode well for discretionary shopping.”
Still, if he were investing in the any of these projects, Stoffel said he would put his money on Disney Center--because it will be sandwiched between two theme parks--and the Block, in that order.
Questionable projects, according to Stoffel, are Stadium Promenade--partly because of its close proximity to the Pond and Edison Field, which means traffic congestion--and Riverwalk, because it would not be immediately off a freeway.
Analysts say Disneyland’s expansion is fueling much of the construction. And as Disneyland revs up its slick marketing machine to pitch its project, other centers could benefit.
“Once it’s open it will be very high profile and pull people into the market,” Lapin said. “But it’s not just going to serve these new guys, it’s going to serve everybody.”
Stoffel isn’t sure that Disney’s coattails will be long enough to pull along so many projects. “How many venues can it support? Probably not as many as are being built,” he said.
The Block, about five miles from Disneyland, expects to be one of the beneficiaries.
“The more people they bring in, the more people that are going to come see us,” Engen said. Further, the Block will have a full-time tourist director to reel in visitors.
“We’ll [bring] thousands of buses of tourists in here a year,” he said.
Developers are scrambling to put distinguishing marks on their projects.
The skate park at the Block is billed as the nation’s largest and most technologically advanced. And the Gotcha Glacier planned for the Sportstown project would be the nation’s first indoor snowboard park. Marvin Winkler, chief executive of Irvine-based Gotcha International, said he hopes to break ground in February.
But such innovation is not easy to come by, DeMyer said.
“Everybody’s looking for the next big anchor tenant that is going to differentiate them from the others,” he said. “Frankly, I don’t think’s it’s there.”
Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles, said developers should take a lesson from the theme park industry and install a major new attraction every couple of years so people won’t get bored.
“In a lot of these things, you have too many of the same type of stores,” Kyser said. “You have the boredom factor on your opening day.”
When experts describe a winning way to develop an entertainment-based shopping center, they point to the trailblazing Irvine Spectrum Center, which last year drew 5 million visitors. The project doubled in size in July when it opened the second of three phases.
The first phase is anchored by a 21-screen theater with its big-screen IMAX, which is now the nation’s busiest multiplex, said Rick Evans, president of the retail division of the Irvine Co., which owns the complex.
The second phase, modeled after a 13th century-style Moorish castle, includes Orange County’s first Dave & Buster’s restaurant and entertainment center. Phase 2, which is now about 90% leased, eventually will have about 45 shops, restaurants and game rooms. The third phase, scheduled for construction next year, will be primarily retail.
The center charges retailers $4 a square foot to lease small shop spaces, up 25% from last year.
But matching that sort of success is like “catching lightning in a bottle,” said Parikh, with Stadium Promenade.
“I think people are still kind of studying the Spectrum to find out how they’ve achieved what they have so quickly,” he said. He remains optimistic about Stadium Promenade, despite the lurking competition.
“It’s right about where we expected it to be,” he said. “To be an overnight success is probably wishing for far too much in this day and age.”
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Retail Bonanza
Entertainment-based shopping is coming to North Orange County in a big way. Six new projects are already operating, opening soon, or will open in the relatively near future. Together, the projects will add more than 4 million square feet and a billion dollars’ worth of additional shopping and entertainment venues.
*
The Block
Location: City Boulevard, Orange (site of former The City Shopping Center)
Square feet: 811,000
Est. cost: $165 million
Developer: The Mills Corp.
Tenants: Vans Skate Park, 30-screen AMC Theatre, Dave & Busters, Virgin Mega Store, Ron Jones Surf Shop
Opens: Nov. 19, 1998
*
Pointe Anaheim
Location: Katella Avenue and Clementine Street, Anaheim
Square feet: 620,000
Est. cost: $300 million-$500 million
Developer: Western Asset Management and others
Tenants: Retail, entertainment, hotel
Opens: Spring 2002
*
Riverwalk
Location: Between Buaro Street and Harbor Boulevard, south of Lampson Avenue, Garden Grove
Square feet: 1 million
Est. cost: $350 million
Developer: OHI Inc.
Tenants: Virtual reality amusement-style rides, family entertainment center, shopping, musical theater
Opens: Fall 2001
*
Stadium Promenade
Location: Next to the Arrowhead Pond in Anaheim
Square feet: 160,000
Est. cost: Undisclosed
Developer: Syufy Enterprises
Tenants: Century Stadium 25 Theatres, The Garage game room, restaurants
Opens: Now open
*
Sportstown
Location: Southeast corner, Katella Avenue and State College Boulevard, Anaheim
Square feet: 1.1 million
Est. cost: More than $100 million
Developer: Forest City Development
Tenants: Gotcha Glacier (indoor snowboarding park), other entertainment, retail, hotel & office space
Opens: Early 2001
*
Disney Center
Location: West Street, Anaheim, on the Disneyland grounds
Square feet: 300,000
Est. cost: Undisclosed
Developer: Walt Disney Imagineering
Tenants: Undisclosed
Opens: Early 2001
Source: Individual developers; Researched by LESLIE EARNEST/Los Angeles Times
