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Retail Traffic

A conversation with Jim Nelson of Mother Company, creator of downtown-like entertainment places

Jim Nelson is best known for his role in the creation of Universal CityWalk as director of planning and development for MCA/Universal Development Co. Nelson's experience also includes real estate development, design, construction and finance.

He and architect Richard Altuna co-founded Mother Company, whose services include strategic planning, master planning, merchandising concepts, theming, landscaping, environmental and graphic design. Nelson serves as CEO of the Hollywood, Calif.-based firm.

Mother Company's current focus is the master planning of a 1,000-acre, mixed-use entertainment complex adjacent to Six Flags Magic Mountain theme park in Valencia, Calif.

SCW: You've often mentioned Bourbon Street in New Orleans as one of the oldest entertainment districts in America. How are developers and designers learning from such authentic experiences - experiences born out of a community's needs and wants that evolve over a long period of time? Today's developers don't have the luxury of time in terms of allowing a project to grow organically, as did cities of old.

Nelson: No, but we can study the past and learn from it. When we combine an understanding of why people like to go out "on the town" with an instinct for what types of experiences people like to have, and then build the right setting for that to happen - we can create new "places." Unfortunately, this process has been made to look far too easy by inexperienced designers and fast-buck brokers. We're seeing many overeager developers who are not doing their homework or involving experts with proven track records.

SCW: Over the past several years we've seen large-scale urban projects such as Horton Plaza in San Diego and CityWalk in Hollywood that are based on attracting both tourists and local traffic. Let's talk about tourist-driven retailing vs. the local market. For example, does a regional mall in a suburban locale that does not depend on tourism really need an entertainment component to drive traffic?

Nelson: Not if store mix is tuned to the local market and the center plans a constant calendar of events and activities. If merchants are staying on the cutting edge of consumer needs and the center is alive and vital, it will be the closest thing to a community "downtown" many American cities have. In fact, many centers are starting to welcome civic offices, adult education classrooms and professional offices into the tenant mix as they recognize the value of integrating the center into people's day-to-day lives.

We've even seen a defunct mall brought back to life by a developer who converted anchor stores into office buildings and thereby created enough of a population to support a group of professional tenants like dentists and optometrists, convenience retail and the food court. In time, the local community discovered the center's unique mix of shops, and today it is flourishing. People need to understand that entertainment uses are not critical to success; relevance and good merchandising are.

SCW: What is the impact of entertainment on traditional centers?

Nelson: In all cases, entertainment uses give higher yield on infrastructure, parking costs and fixed operating costs because of the difference in time ofuse. Entertainment uses are driven mainly by cinemas, which have a peak hour of 10 p.m. and virtually no attendance during the day except for children's films. As a result, entertainment clusters dovetail well with traditional centers.

Additionally, if a tenant mix that appeals to the cinema demographic is located adjacent to the entertainment cluster and kept open till 10 or 11 p.m., cross-support between uses can be achieved. Music, youth fashion, books, food court and impulse (particularly carts and kiosks) will all flourish in the late evening. Of course, there is seasonality, but the nice thing about entertainment clusters is that they peak in the summer doldrums, and their traffic and parking impact on traditional daytime shoppers is minimal.

However, unless the center is open very late and patron traffic flow is done correctly, entertainment uses don't tend to attract a significantly larger market to typical mall tenants. In some cases, the youth orientation of some projects has created problems for the adjacent mall. We've seen this lead to sealing off the mall from the entertainment zone, curfews and even shuttering of the entertainment uses.

SCW: You've made reference to the notions of "placemaking" and "placekeeping." Can you elaborate?

Nelson: The objective of placemaking is to create a community attraction, a place where you go to see and be seen. The process of placemaking is not something that can be done by formula. In fact, the non-branded uniqueness of places like Bourbon Street or CityWalk shows how far from any existing formula you must go to be successful.

You've got to have a vision of what you're doing, not a formula. You've got to go back to the good old stuff like history and planning and common sense. For example, have you chosen materials and designs feasible to operate and maintain? Will the completed project generate a profit?

Assuming you've put the project together correctly, the next challenge is keeping it alive, attractive and profitable. That's the job of placekeeping. The project must operate as a whole, not bits and pieces. You can't afford profit centers fighting each other, tenants that don't get along or don't follow the operating rules. Make sure leases have use clauses that give you real controls over the behavior of tenants. If you don't structure and enforce the use clauses, you're going to end up with T-shirt and yogurt shops just like all the other places in the world because there is a spiral to mediocrity that's built into the market system.

You've got to keep the whole project market-driven. Tenants must be kept entertaining and fresh. A full calendar of events must be put together and managed. And, promotion of the project has to be done in the local media through advertising and public relations. Most importantly, you're not selling products, you are selling experiences. It's about operations and visitor satisfaction. How the shopkeepers dress and greet customers, the quality of food and entertainment, the type of films booked in the cinemas all impact the visitor experience. A regular mystery-shopper program and a viable merchants association play a key role in keeping things on track.

SCW: Is that part of watching out for the APES?

Nelson: Right. APES stands for access, parking, environment and security. Do a good job with those four elements and you've got an entertainment project that will work. But if you don't get all of them right, you've got trouble. If customers can't access the project easily, if they can't park comfortably, if they don't like how the environment feels and if they don't have a sense of security, they aren't going to come back and they certainly won't be telling their friends what a great place it is.

While access, parking and security are fairly self-explanatory, environment still seems to be the biggest mystery and stumbling block for developers. Simply put, a project's environment can be defined by "how's it going to feel." Put the money where it makes the project feel better. Put it where it matters - on the people interface, for example, landscaping, street furniture, finishes and amenities. Invest in shops that are unique and entertaining. Sure they might be less creditworthy or need a higher tenant allowance to move in, but they are part of the experience and what gives a project its "feeling."

As far as the issue of security is concerned, patrons must both be safe and feel safe. Masses of loitering young kids dressed in gangster clothing and making comments to passing women will instantly make middle-aged patrons feel insecure and uncomfortable. Perhaps the security forces and closed-circuit TV make the project very safe - the point is that it doesn't feel safe and that's a killer.

Here, we come back to the tenant mix. If we build a project with skateboard shops and thrill-oriented entertainment attractions, it's going to attract kids and the kids will ultimately drive away the adults. Most adults and parents with children don't like the sense of insecurity they feel in a place with a lot of teenagers hanging out.

SCW: Do you see Internet shopping having an impact on entertainment retailing?

Nelson: Entertainment retail is confusing to a lot of people. To me, shopping is entertainment - selling experiences as opposed to goods. The Internet can't deliver experiences, though it can deliver goods. The Internet will force retailers and landlords to understand the need for a richer and more satisfying shopping experience if they are to stay viable.

Only by creating experiential places will we be able to compete with an Internet world that brings shopping to the living room. Theming won't do it, branding is actually going the wrong way, and current retailing based on goods will die overnight. You've got to be entertaining. Put on a show.

We did a concept few years ago called Glow, with glow-in-the-dark merchandise putting on the show. The store's lighting system periodically changes so the glowing products stand out. That's something you just can't get over the Internet.

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