LAS VEGAS — With the nation’s suburban landscape pockmarked by malls, developers are searching for the next strategy to grow revenues. Regional centers are losing traffic; entertainment centers never worked; strip centers, representing 95...
LAS VEGAS — With the nation’s suburban landscape pockmarked by malls, developers are searching for the next strategy to grow revenues. Regional centers are losing traffic; entertainment centers never worked; strip centers, representing 95 percent of the nation’s 45,721 shopping centers, need major makeovers, and urban markets are woefully under-retailed and ignored. Yet African-American and Latino communities have some $500 billion in spending power, according to Earvin “Magic” Johnson, the former basketball great who is becoming well known for bringing Starbucks [he’s the only Starbucks franchisee], TGI Fridays and movie theaters to inner-city areas under Magic Johnson Enterprises, a developer. “We’re not there for charity, we’re there to make money,” he said, during his keynote speech at the ICSC last week. “All we’re trying to do in the urban community is make their life easier and uplift their community, too.” He said he’s looking for deals around the country, and the key to profitability in inner cities is getting some public funding.Mayors from San Antonio, Tex.; Little Rock, Ark.; Louisville, Ky., and Baltimore, Md., promised millions of dollars in funds from the public sector to help projects along. “Retail sales are essential to the lifeblood of my city,” noted Mayor Patrick Henry Hayes of Little Rock. “Sales tax helps fill my pot holes.”“We can’t have strong neighborhoods without strong retail,” Mayor Martin O’Malley of Baltimore added. “There’s a remigration back to cities. It’s a better investment. The infrastructure is there. The city of Baltimore is open for business.”However, developers seem most drawn to the so-called “lifestyle” center. Exactly what they are, or how many exist, was up for debate. Estimates ranged from about two dozen to more than 100. The official ICSC definition: centers near affluent residential neighborhoods with an open-air configuration, at least 50,000 square feet and upscale national specialty stores.Others said lifestyle centers require a “a sense of place,” and still others said lifestyle centers must have a combination of retail, restaurants and entertainment. Some gave a short definition — they’re just modern versions of strip centers. The bottom line: “Where the developer does not have vision, that center will perish,” said Patti Bender, vice president of leasing for Weingarten Realty. “You can’t plop down a store or a center without vision. You need to create a sense of place,” and you do that by building walkways, fountains, murals, lighting and hallways that reflect the community culture and architecture. “Retailers are not going to do it for you,” Bender said.Brett Hutchens, a developer with Don M. Casto, broke it down quite simply: “It’s where you can go to relax and be amused,” he said, adding it must appeal to the whole family.“Lifestyle centers are neighborhood community centers,” said Keith C. Eyrich, president of the Irvine Co. in Newport Beach, Calif., owner of several lifestyle centers in Southern California, including The Irvine Spectrum and a new project called Crystal Cove, to bow in October. “They’re the most stable and investment-grade type of retail product there is.”“I wouldn’t try to label it,” saidR. Webber Hudson, president of leasing and marketing company Urban Retail Properties Co. “It’s just a well-focused retail project that clearly addresses a need for consumers — commando shopping. Getting in and getting out quick.”
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