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Survival of the Fittest

The entertainment center -- far from being a creation of the '90s -- has evolved from a simple organism to meet the needs of a changing society. How did we get from there to here? For the moment, the category on everybody's mind is entertainment, and the concept of an entertainment center is as hot a topic in 1999 as malls in general were in 1969. Only the advent of the power center at the tail end of the '80s has generated anywhere near as much press. But where discussion of the power center format rarely moved beyond industry publications and the local business pages, news about the entertainment center has popped up in virtually every section of the daily newspaper, even sports.

For example, in San Francisco, the locally based Catellus Development Corp. is building a 350,000 sq. ft. entertainment center adjacent to a new stadium for the Giants baseball team, with the majority of tenants expected to have a sports theme (if sometimes only tangentially). Across the city, the San Francisco '49ers have tied development of a new football stadium to construction of a 1.4 million sq. ft. entertainment/outlet/specialty mall by The Mills Corp. and Simon Property Group.

So where did this high-profile concept come from? How did we get from the plain vanilla malls of the 1960s to the flashy, brassy glass palaces of today -- those blends of Fifth Avenue, Disneyland, Las Vegas and Main Street that seem to be springing up everywhere (including, appropriately enough, in Las Vegas)?

To find out, we need to step back 50 years to a time when the shopping center did not exist.

In 1948, when you wanted to have fun shopping, you went downtown. You also went downtown to have a restaurant meal, see a movie or play, go dancing or just hang around where there were other people. You could even do your grocery shopping at the public market hall. Downtown was special. It was the place you went to have a good time.

Then came the federal highway program and GI Bill, which quickly and radically changed the American landscape. By the end of the '50s, the suburbs were becoming the center of American life. And with the suburb came a new form of shopping: the mall.

Unlike downtown, malls were just for shopping. For a variety of reasons, everything else got separated out. The biggest reason was the automobile. Another was the changing role of women. And a third was a change in daily habits.

Downtowns developed before automobiles. People needed things close together. Women especially.

In those days much more than today, shopping truly was women's work. Although by the '50s most families had cars, few had more than one -- and that one typically was used by the husband to get to work. Consequently, stores located where women could get to them, which usually meant places they could reach by bus or streetcar. And at that time, most transit went from the neighborhoods to downtown.

In the '60s, shopping was still largely a female activity, but second cars were more common and women had use of them for their daily activities.

Even with the car, shopping centers still could have replicated downtown more closely, but as it turned out they did not need to. With the advent of television and the stereo, entertainment became centered in the home. People simply did not go out as much.

Americans also changed the way they ate. The big kitchens and fancy appliances of new homes made home cooking much easier. And if you didn't want to cook some night, the Chinese restaurant and local pizza parlor delivered by car in just a few minutes. Or you could dash out and pick up hamburgers and fries.

As a result, shopping centers did not need movie theaters, restaurants, nightclubs or any other kind of entertainment. Stores were all they needed.

And that's pretty much the way things stayed right through to the '90s. Malls got larger, but the basic format remained basically static -- stores, stores and more stores there were exceptions, however. Almost from the beginning, people were developing alternative kinds of shopping centers. The first to get major attention was San Francisco's Ghirardelli Square in 1964.

Created from a former chocolate factory, the waterfront project featured a collection of small specialty shops, restaurants and cafes, most locally owned, at least in the beginning. Centered around a multi-level, open-air court replete with terraces, trees and flowers, the complex quickly gained a reputation as a charming place to shop.

There was a theater in one corner and a number of colorful restaurants and cafes. Singers, musicians, jugglers and magicians performed on an ad hoc basis and sidewalk artists drew portraits for a small sum.

Similar complexes sprang up elsewhere, usually in tourist areas or near college campuses. Few were larger than 100,000 sq. ft. Most were considerably smaller.

In 1968, San Antonio built the approximately 250,000 sq. ft. Riverwalk as part of the Texas HemisFair, but it wasn't until the late '70s that developers really started to experiment with larger projects.

John Ecklein, publisher of Entertainment Real Estate Report in Ignacio, Calif., considers a dozen projects milestones in the evolution of the entertainment center. Each broke from the mold and introduced at least one element that became a central component of entertainment retail. The 12 are:

* Riverwalk, San Antonio, San Antonio Paseo de Rio Assoc., 1968

* Faneuil Hall, Boston, The Rouse Co., 1976

* Pier 39, San Francisco, Moor & South, 1978

* West Edmonton Mall, Edmonton, Alberta, Triple Five Corp., 1984

* Horton Plaza, San Diego, The Hahn Co. (now TrizecHahn), 1985

* CocoWalk, Miami, Constructa Co., 1990

* Mall of America, Minneapolis, Triple Five Corp. & Melvin Simon Associates (now Simon Property Group), 1992

* The Forum Shops at Caesar's Palace, Las Vegas, The Gordon Co., 1992

* CityWalk, Universal City, Calif., Universal Studios, 1993

* Navy Pier, Chicago, Metropolitan Pier and Exposition Authority, 1994

* Irvine Spectrum, Irvine, Calif., The Irvine Co., 1995

* Ontario Mills, Ontario, Calif., The Mills Corp., 1997

Although each of these projects has unique features, most share certain common elements -- the first of which is their very uniqueness. By and large, these projects are not generic but designed for a specific location.

Riverwalk stretches along the San Antonio River. Faneuil Hall, for which the term "festival marketplace" was coined, consists of three historic structures on Boston's "Freedom Trail," a marked walking tour of sites that played a role in American history. Horton Plaza has a colorful, eye-popping design intended to make downtown San Diego seem like a festive place to be.

CocoWalk takes advantage of Miami's warm climate to open large parts of the project to the air, while West Edmonton Mall and Mall of America respond to the upper Midwest's long, harsh winters by creating a climate-controlled indoor world.

By today's standards, the first projects on the list had few specific entertainment elements when they opened, though some were added later. Pier 39, for example, added a Cinemax theater and an Underwater World aquarium.nonetheless, these projects paved the way for today's entertainment centers by proving that, under the right conditions, a shopping center could become successful by violating the rules.

To begin with, none of them had anchors or more than a few national retailers. Nor did they have conventional layouts. All had a large proportion of food tenants, including stands, carts and sit-down restaurants. They were also all or substantially open-air, even Faneuil Hall, which had to face Boston's bone-chilling winter winds and body-wilting summer heat.

Perhaps most notably, all had colorful designs and a quality of celebration that in itself became a major attraction. People came as much to be part of the experience as to shop. They were places you, and the whole family, could go to have fun, even if the fun was nothing more than wandering around and eating. The experience was similar to going to a carnival, but without the rides and games.

West Edmonton Mall, which opened in 1982, marked a separate stage of evolution. Very much a suburban mall, complete with shopping center anchors, conventional design and total enclosure, it introduced the parts of the carnival absent from the previous projects -- the rides and midway attractions. The center includes an entire amusement park that effectively serves as one anchor. But rather than being integrated into the overall property, it has its own discrete section.

1992 proved a pivotal year with the opening of Mall of America and the Forum Shops. According to Ecklein, the success of the two projects made it clear that entertainment was both a viable focus for retail and a money-maker in its own right.

In essence, West Edmonton had already demonstrated this, but many people in the industry insisted it was an anomaly, a concept that could work once and only once. The Minnesota project proved them wrong. Mall of America has become one of the most successful retail projects ever built, drawing 40 million visitors a year.

"All of Las Vegas gets only 32 million," Ecklein notes. "People come by the busload to shop there. They come from Europe and Japan. They come from the whole world."

As for the Forum Shops, Ecklein calls it the entertainment project that really captured the industry's attention. "Not only was it highly themed and eclectic, but it was also profitable," he says. "It had sales of $1,200 per sq. ft., while malls were lucky to get $300 per sq. ft."

The success of CityWalk the next year confirmed the concept's viability. "People saw it could work in very different places, very different settings, with very different components," Ecklein says.

Chicago's Navy Pier took another step by having a much higher quotient of entertainment features. According to Bruce Kaplan, president of Chicago-based Northern Realty Group Ltd., which served as a consultant on the project, many experts predicted the Pier would not succeed. With only about 250,000 sq. ft. of retail and restaurant space, a sizable portion of which is the Chicago Children's Museum, and a roster of mostly local retailers, it was predicted to lose money.

As a municipal project owned and managed by a quasi-governmental entity, the pier does not need to make a profit, but it does need to pay its way, and that it is doing, Kaplan reports.

"We will do about 8.2 million people this year, triple the projections," he says.

Irvine Spectrum upped the ante on the entertainment concept by leaping to a larger square footage, yet still doing without a conventional anchor.

More significantly, it is also not in a major tourist location. All the projects that preceded it -- except Mall of America and West Edmonton Mall - are located among other extremely popular tourist attractions, and the two exceptions are large enough (5.2 million sq. ft. and 3.1 million sq. ft., respectively) to have become tourist attractions in themselves.

Irvine Spectrum at least has nearby beaches and marinas, but Ontario Mills, which opened the following year, is far from a major city in a location with virtually no tourist appeal. Like the Triple Five projects, it depends upon drawing from a very wide radius.

But unlike them, it has no amusement park, no department store anchor -- and no frigid winter. It has a mix of power retailers, standard retailers and factory outlet stores. But it does have a lot of entertainment. And it works, drawing more than 10 million visitors in 1997.

What is most remarkable about the entertainment center concept is its breadth. There is not one category of entertainment, one group of retailers, one type of restaurant that works. The possibilities appear endless.

For example, Navy Pier's attractions are decidedly old-fashioned: Ferris wheel, carousel, fountains with dancing water, two parks, a reflecting pool/ice rink, and docks for tour boats. There is also a 1,500-seat tented concert pavilion, a small convention center and, by this summer, the Shakespeare Repertory Theater.

By contrast, the upcoming Sony Metreon in San Francisco, scheduled to open this spring, will rely heavily on untested high-tech attractions. It will have a multiplex theater and an IMAX, but the focus will be three interactive environments based on popular books: Maurice Sendak's Where the Wild Things Are for young children; David Macaulay's How Things Work series for older children through adults; and French graphic artist Moebius' The Airtight Garage for older teens and adults.

There will be a minimal amount of retail -- items related to the books, a Sony products showroom, the world's only Microsoft store, one or two other shops and several restaurants.

Will it work? If the theories of architects Jon Jerde and Tom Green are correct, it certainly will. In their view, the appeal of entertainment is not the entertainment per se but the opportunity to be among other people having a good time.

Jerde's firm, the Jerde Partnership of Venice, Calif., designed Horton Plaza and CityWalk and contributed to the design of Mall of America. Green is a partner in Cambridge, Mass.-based BTA Architects, which designed Faneuil Hall Marketplace, Baltimore's Harbor Place and New York's South Street Seaport.

"What you're really talking about is building successful communal places, places where everybody goes and mixes," says Jerde. "It's an enriching life experience to be amongst people, and shopping, dining and entertainment are three activities that bring people together." the architect regards conventional shopping centers as byproducts of a misguided attempt by an earlier generation of planners to apply a scientific approach to building communities.

Says Jerde, "They were trying to be rational, by separating everything into component parts. This went here, that went there, and they never mixed. It was very boring."

In Jerde's opinion, the popularity of the entertainment center goes part and parcel with the revival of the nation's downtowns. Indeed, all but three projects on Ecklein's list are urban. Riverwalk, Faneuil Hall and Horton Plaza were in fact part of a strategy to lure people back to the city center.

According to Green, Faneuil originally was not targeted to tourists but to local residents. "We assumed some tourists would come, but we didn't see them as a major factor," he says.

In fact, they came in droves, a sign, he believes, of the lingering desire for aspects of city living not available in the suburbs -- or for that matter in most of the nation's cities.

"There's a sense of connectedness that people respond to, even if they don't always know it's been missing from their lives," Green remarks. He notes that Faneuil Hall is within walking distance of many different worlds: from the Italian shops and restaurants of Boston's North End to the modern high-rises of the city's financial industry, from the department stores of Washington Street to the quaint shops and cobbled streets of Beacon Hill, from the Charles River Park and Boston Harbor to the Massachusetts State House.

Even today, the architects point out, suburban centers tend to segregate entertainment elements in one corner of the mall, in the pattern of Mall of America and West Edmonton Mall.

What this does, says Helen Bulwick, a retail analyst with San Francisco-based Andersen Consultants, is allow the entertainment area to remain open later than the stores without retailers having to worry about vandalism or break-ins.

While there is probably more risk of these kinds of activities in an urban setting, streetfront stores have always faced the problem because there is no way to lock up city streets. Furthermore, the presence of late-evening entertainment actually becomes a deterrent to downtown property crimes because of the number of potential witnesses.

Another factor that contributes to the rise of the entertainment center, says Bulwick, is the harried pace of modern life. People, including women, no longer have leisure time for shopping.

"In the early '80s, the average time spent in a mall was three hours," she says. "Now it's about half an hour. People want to take advantage of every spare minute they can find, and shopping is not high on the list of pastimes, especially if you want to spend time with your family. But once you put in cafes, bookstores, a movie theater, games and so on, people start to see that they can have fun and shop at the same time."

Entertainment centers also provide activities for teenagers. "These centers provide places to congregate in a really cool environment," Bulwick says. "And parents don't have to worry so much because the kids are fairly well monitored."

Ecklein sees other factors at work as well. "The real crux is that the consumer has entered the experience economy," he says. "Consumers are looking for more than just the goods."

With the inevitable growth of Internet sales, shopping, especially for essentials, will take even less time and leave people more time for fun. As Ecklein puts it, "It's going to create more time for people to go out and participate in their community."

Bulwick argues that the entertainment market is nowhere near saturation, mostly because people's desire for fun and involvement is never-ending and the possible ways to have fun are infinite.

Jerde predicts that the integration of sports and retail might be the next big wave. "My firm is very involved with taking facilities complexes and wrapping them with entertainment complexes," he says.

However the entertainment-retail concept evolves, Jerde regards it as much more than a purely economic development.

"The story of retail development for the past 20 years has been people trying to weave things back together into a coherent whole and revive the sense of community," he says. "I'm absolutely confident we can transform everything we've got in America into successful human enclaves. Retail is in the forefront of that."

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