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Retail Under A Florida Sun

Arguably the most active retail development area, Florida took center stage at a recent conference sponsored by Shopping Center World magazine. The Florida Retail Summit presented a comprehensive look at the shopping center industry in the state as well as the industry's first look at our SADI Award winners. (See pages 335-363 for complete details about the award winners.)

The one-day conference was held Tuesday, Feb. 3 at the Omni Rosen Hotel in Orlando. Session topics included a development overview, an update on freestanding store development, legislative issues, and the new kid on the block: entertainment/retail centers.

The summit began with a presentation on the state of Florida's retail market by the Orlando office of Faison. Frank Herring Jr., managing partner/Florida Region for Faison, chaired the panel, which also included David Marks, Sighla Finazzo and John Crossman.

Faison credited the aggressive expansion by grocery stores as the clear driver of shopping center development throughout the state. In a region-by-region overview, panel members labeled Orlando, southwest Florida and southeast Florida as "hot" - markets where development is ahead of current population growth. The Panhandle, Jacksonville, Gainesville, St. Augustine/Daytona Beach, and Tampa were characterized as stable - markets where development is on track with population growth.

Faison outlined for conference attendees several national trends that likely will affect further development of neighborhood and community shopping centers. The trends identified were:

* the polarization of society

* the classification of convenience and destination retail distribution venues

* mass vs. specialty

* the arrival of non-retail tenants as category-killer anchors take over small shop uses

* the buildout costs for these non-retail tenants

* the aging of America

The summit's second session recounted the amount of retail development taking place outside the bounds of shopping centers. In a presentation by Gary Ralston, president and chief operating officer of Orlando-based Commercial Net Lease Realty Inc., attendees learned that, 10 years ago, 55 percent of all retail construction starts were malls. In 1997, Ralston said, 55 percent of all retail construction starts were freestanding stores.

He explained that the segment of freestanding stores has been largely ignored, yet it encompasses 8.3 billion sq. ft. of retail space in the United States for approximately 1,200 retailers. Joining Ralston on the panel was John Awsumb, also of Commercial Net Lease Realty.

The tide turned toward freestanding store development in 1991. Ralston attributed the change to:

* the retailer's desire to control the store and the site with regard to maintenance and hours of operation

* the possibility of more timely store openings and lower occupancy costs

* flexibility of store design

* the enduring value of land

* ease of access and convenient parking

* high visibility/distinctive identification

The third session of conference put the focus back on Florida - specifically land-use regulations and other legislative issues facing Florida retailers and developers. Sue Murphy, director of land planning in the Tampa office of Rudnick and Wolfe, a law firm specializing in real estate, was the featured speaker.

While Murphy identified several federal issues - bankruptcy, capital gains, and Internet sales tax - for shopping center owners to monitor, she warned that the state government cannot be ignored. Rules, she said, affect development more directly that federal legislation. "And rulemaking authority is shifting to the state."

Of particular interest, Murphy said, is the absence of rules specifically for rehabilitation projects in Florida's urban areas. In the case of redevelopment sites, Murphy suggested that an impact fee credit should be given for uses that existed on the site at the time the impact fee ordinance was enacted. Assumptions made about the impacts of these previously existing uses can dramatically increase or decrease the amount of credit granted against the proposed redevelopment project.

Impacts of a different sort - entertainment - was the topic of the final session. The three-member panel included Lonnie Peterson of Cuhaci & Peterson Architects, Orlando; Cindy Webb of The Michael Swerdlow Cos., Hollywood, Fla.; and Randi Emerman of Muvico Theaters, Fort Lauderdale. The session was moderated by Teresa DeFranks, editor and associate publisher of Shopping Center World.

Seeking first to define entertainment, panelists offered differing - although not necessarily conflicting - versions. Ultimately, the panel agreed that entertainment is indeed different things to different people: "They know it when they see it."

Both Webb and Emerman previewed projects on the drawing boards of their respective companies, while Peterson elaborated on Pointe Orlando - an existing entertainment and retail center down the street from the Omni Rosen Hotel. Food, theaters, pedestrian spaces and unique merchandise all contribute to an overall experience that shoppers typically label as fun and that developers label as entertainment retail.

The Florida Retail Summit concluded with a networking reception and a promise to keep an eye on the continuing retail development throughout the state.

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