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Hoyts Northeast Growth Proves Show Must Go On

Hoyts Cinema Corp., with an expansion eye toward both regional mall and freestanding locations, projects 150 new screens by the end of this year, with approximately 175 screens on tap for both 1999 and 200.

The familiar mantra "location, location, location" rings true for Boston-based Hoyts Cinema Corp., as it continues its search for top-quality real estate throughout the Northeast. According to Paul Beck, Hoyts' vice president of real estate, the company will consider sites in varying configurations as long as the surrounding area has strong access and attractive demographics.

"We develop according to the target of opportunity," he says. "We're looking for access, for visibility, and we're looking for a population draw. And whether the opportunity is in a freestanding facility or in a regional mall, we'll look at each independently."

While Beck admits that a good amount of the company's site selection will include "freestanders," shopping centers continue to play an important role in theater operations and new openings (much of the company's existing theater portfolio is in regional malls). In fact, Hoyts recently broke ground on a 75,000 sq. ft., 16-screen theater at Potomac Yard in Alexandria, Va., which, like the rest of the company's new theaters, will feature stadium seating, high-back chairs and digital sound.

"In this new power center, [the new Hoyts theater] will sit behind the center itself," he says, adding that, in the unique case of Potomac Yard, Hoyts can still be a major shopping center destination while occupying its own building. "We get the benefit of the customer draw and the center's infrastructure, while it is still a freestanding building."

Hoyts also is enjoying the benefits of traffic at 1 million sq. ft. Brass Mill Center in Waterbury, Conn., where Somerville, Mass.-based Arrowstreet Inc. designed both the Hoyts theater and the center itself. Rob Holt, associate and Hoyts account manager for Arrowstreet, explains that spearheading both the center and theater designs made for a well-blended presentation.

"The cinema was placed in a central location on top of the mall, which provides vertical circulation and a natural draw," he says, adding that, since the theater sits up high atop the center's third floor (and facing nearby I-84), there is an extra draw to the center where there wasn't one before. "Implementing both designs was a wonderful opportunity to provide both synergy within the mall and a presence and signature feature for the cinema on the mall's exterior."

The 3,500-seat, 80,000 sq. ft. cinema is marked by dramatic lighting and a lobby ceiling set off by perforated metal tiles edged in colorful neon. "The Hoyts theater acts as an additional anchor store for Brass Mill as it runs up through the center of the mall, which is where [it best serves the center]," Holt says.

In terms of performing its expansion plan, Hoyts' show continues to go on. The company plans to open 150 new screens this year, with 175 new screens on tap for both 1999 and 2000. This month, the company will open a 14-screen theater in Linthicum, Md., and a 12-screen theater in Branford, Conn. The openings also build upon Hoyts' success in the northeastern United States.

"We operate from the metropolitan [Washington,] D.C., area, north through Pennsylvania, and then up through New York State and New England," he says, adding that Hoyts Cinemas could move its developments into new regions in the future. "We will primarily concentrate on that portion of the United States, but I think it makes sense for us to start expanding gradually into contiguous areas.

"We're doing all types of deals," he reiterates. "We're working with ground leases, build-to-suits, REITs -- we are not as committed [to only one format]. We will examine each market, try to figure out what it needs, and build according to that level."

In August 1996, Hoyts Cinema Corp.'s parent company, Sydney-based Hoyts Cinema Ltd., went public, and recently made an equity investment in Cinemex, one of the largest theater circuits in Mexico. Beck reports that international theater development accounts for roughly 40 percent of Hoyts Cinema's total development, which includes deals in Argentina, Chile, England and Austria, among others.

Contact: Hal Cleveland, senior vice president; Paul Beck, vice president of real estate; or Robert John, vice president, Hoyts Cinema Corp., One Exeter Plaza, Boston, Mass. 02116; (617) 267-2700.

If one were to add a gourmet supermarket to the traditional in-line tenant mix of a regional mall, what would be the result? Would patrons balk at the pairing or would they relish the chance to bring home groceries along with their Gap purchases?

After serving 10 years as Cambridge, Mass.' gourmet grocery store staple, Barsamian's asked just those questions when it opened at 800,000 sq. ft. CambridgeSide Galleria last September. According to Edward Barsamian, WellsPark Group chairman Stephen Karp and director Steven Fischman suggested that the store take the unusual leap to an 11,000 sq. ft. location just off CambridgeSide's food court.

"My reaction to them was, 'Where has this been done before and where can I see the concept working somewhere else?'" says Barsamian, president of the Cambridge-based gourmet market chain. "They came back and said, 'We don't think it's been done before, but we believe that Barsamian's could make [CambridgeSide Galleria] a more complete shopping experience. Something that could break new ground.'"

With a deli, salad bar, bakery and floral department -- as well as meat and seafood, beer and wine, prepared meals, and produce -- Barsamian's may well help expand the potential tenant pool for today's regional centers. The store provides a holding cooler for patrons who wish to "check" their groceries while they shop the rest of the center, and customers also can phone in their order and have their groceries delivered to their homes free of charge.

"It's interesting how the store is developing," he says. "There's a very large business and residential community around the mall, which has embraced the store beyond my wildest dreams. The mall store, in lunch business, is beating the old store."

Barsamian attributes the market's mall success in part to how customers search for ways to shop for more items under one roof. "If you look at the evolution of retail," he says, "supermarkets and superstores are basically becoming malls. [Customers patronize] these superstores because they're selling everything from food to tires to clothing.

"The direction of the regional mall is to take what they have -- which is everything but food -- and introduce food retailing at the regional mall level," he continues, adding that Barsamian's can add depth to a center's food offerings. "And this is how Barsamian's has become an interesting and viable concept [at CambridgeSide]. If customers are not up for pizza or burgers or fried food, then we offer them the alternative."

With similar store openings expected in the future, Barsamian notes that the concept is not likely to work in every regional mall.

"I would love to open another unit or two this year, but we'll have to see how things develop and what the availability of space is in the particular malls," he says. "There are certain regionals where we feel this concept would not work. Without a large surrounding business community, we wouldn't have the foundation of lunch business. That creates a larger risk; the combination of grocery and lunch is essential."

Contact: Edward Barsamian, president, Barsamian's, 1030 Massachusetts Ave., Cambridge, Mass. 02138; (617) 661-9300.

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