The COVID-19 pandemic devastated the movie theater industry with nationwide business dropping 35 percent in 2022 over recent pre-pandemic numbers.
With movie watchers staying home to stream films, Macerich, owner of the upscale Santa Monica Place shopping center, has decided to replace its ArcLight Cinemas tenant, which closed its 12-screen complex in 2020, with a different entertainment option.
The new tenant will be an immersive experience called Arte Museum, which will occupy the 48,000 square feet the movie theater left vacant.
Macerich expects the museum to attract 1 million visitors a year when it opens at the end of 2023 on the third floor of the shopping location, which sits just blocks from the Pacific Ocean in Santa Monica, California.
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“We were looking for something that would be unique and really bring something special to Santa Monica Place,” said Cory Scott, executive vice president, asset management, at Macerich, a publicly traded real estate investment trust with 44 properties.
This will be the second location in the United States for Arte Museum, which was created by D’strict, a digital design company in South Korea. D’strict is opening its first U.S. location, occupying 25,000 square feet, in the coming months in Las Vegas.
Santa Monica Place, which opened in 1980 and later was purchased by Macerich in 1999, has had a lot of vacant space to fill recently. During the pandemic, ArcLight Cinemas closed its doors there and later announced it would not be reopening its venues due to financial problems caused by the spread of the COVID-19 virus.
Bloomingdale’s, another major anchor tenant that used to occupy 100,000 square feet over two floors, left in 2021, after being at the shopping hub for 10 years.
The pandemic has been hard for shopping centers. For the first nine months ending Sept. 4, 2022, Macerich had a net loss of $67 million on revenues of nearly $631 million.
Macerich executives in charge of Santa Monica Place were introduced to D’strict and its digital art museum last spring and immediately were amazed by the kind of immersive artwork the digital design company produced. Not wanting to rely on just videos, Scott and two other Macerich executives flew to South Korea to get a first-hand view of the immersive digital art museum the company had opened in Seoul, the country’s capital.
Inside the museum, Scott and his colleagues entered and stood inside a tall room where a video of a towering waterfall was projected on the walls and the scent of fresh water permeated the air. Each room inside the exhibit had a different digital display with different smells to go with it.
“We were in the museum for about five minutes, and we were blown away. We just looked at each other and said, ‘This is better than our best expectations,’ ” Scott said.
One of the museum’s interactive features is the table where images of animals pre-drawn on paper are colored in by visitors and then scanned into a device. The device projects the images, which come to life on the museum’s walls. “You’re in a big round room and your animal parades around and does different things,” Scott said. “It’s just a really interactive, fun experience.”
D’strict is no stranger to the United States. In the summer of 2021, the company had two digital art projects shown in New York’s Times Square. In July, it converted a 30,000-square-foot electronic display board on the side of a building into a realistic 3D space showing waves crashing around a majestic blue whale. It was if the whale had suddenly popped up in the middle of the city.
In August, D’strict used the digital screens on the side of One Times Square to replicate a waterfall cascading down thousands of feet.
It is that kind of interactive entertainment that is helping businesses attract attention. In recent years, retail malls have had to change their structures due to shifting shopping habits and the pandemic.
“It used to be your shopping center was dominated mostly by apparel categories,” Scott said. “Now we think of shopping centers as town centers. We now have entertainment. We have food and beverages. We’ve got offices in some locations, and we’re adding residential and hotels.”
Recently, Santa Monica Place, whose main tenants include Nordstrom, Louis Vuitton, Nike and Tory Burch, has been investing more in interactive entertainment concepts to complement the stores.
In September, former Victoria Secret’s model and TV personality Tyra Banks opened ModelLand in 10,000 square feet on the ground floor of the retail venue. It gives consumers a few hours to discover their inner model.
Macerich said it will soon be announcing other projects to fill the empty Bloomingdale’s space.