Entertainment has become a main component of retail projects, and developers are providing attractions ranging from movie theaters to skate parks. Heartland Real Estate Business recently spoke with several retail developers across the Midwest to learn about some of the entertainment/retail projects currently at different stages of development.

Some of the projects covered include Legacy Village in Lyndhurst, Ohio, and The Streets of West Chester in West Chester, Ohio.

Besides offering plenty of retail and entertainment options, these projects also feature good places to eat and residential components. Today, the trend is to move beyond retail and into mixed-use projects.

As these projects show, the Midwest has been receptive to open-air, entertainment-oriented retail. And, despite the financial crisis that struck theaters a few years ago, the Midwest is still a place that theater companies love, reports Ralph Cram, principal with Chicago-based Theater Investment Group, in a special sidebar (on page 56). As the retail real estate industry prepares for the ICSC Spring Convention in Las Vegas next month, Heartland Real Estate Business takes a look at a few of the projects that will represent the Midwest there.

LEGACY VILLAGE Lyndhurst, Ohio Beachwood, Ohio-based First Interstate Properties is developing Legacy Village in Lyndhurst, Ohio, on the coveted, former TRW Headquarters site. Scheduled to open in October, the $145 million, 615,000-square-foot lifestyle center is expected to redefine the retail landscape among greater Cleveland’s most prosperous east suburbs such as Shaker Heights, University Heights, Beachwood and Pepper Pike. Located at Cedar and Richmond roads, the center sits diagonally from The Rouse Company’s Beachwood Place –– the most successful regional mall in the Cleveland area, which features Nordstrom, Saks Fifth Avenue and Dillard’s as anchors. “The location of Legacy Village is unique because it is across from Northeastern Ohio’s only true fashion mall. We view the trade area as being all the way from Erie, Pennsylvania, to Youngstown, Ohio, and west to Toledo, Ohio,” says Mitchell Schneider, president of First Interstate Properties. “More than 50 percent of the square footage at Legacy Village will be occupied by tenants with their only Northeast Ohio locations at the center. We will have a unique project site and unique retailers that retain and enhance the trade area for Legacy Village and Beachwood Place.” Legacy Village will be home to several merchants new to the area, including a two-story Crate & Barrel Home Store, the second largest collection of Talbots stores in the country, Expo Design Center, Galyan’s Trading Company, Viking Culinary Arts Center, Joseph Beth Booksellers, Arhaus, Norwalk Design Studio, Anthropologie and Z Gallerie. The village also has a number of high profile restaurants –– such as The Cheesecake Factory, California Pizza Kitchen, Brio Tuscan Grille and Stir Crazy –– positioned along carefully designed retail streetscapes. Supporting these development goals, Legacy Village will feature groups, or clusters, of retail units that will invite, rather than overwhelm, shoppers by encouraging them to move from one store to another through an established village or downtown setting. Additionally, architectural detailing, green spaces, buffers, internal roads and environmental improvements to the property will help to further establish this village-type setting in the Cleveland area.

ZONA ROSA Kansas City, Missouri Steiner + Associates brings its new urban retail planning to a 93-acre site, fronting Interstate 29 and Barry Road, in Kansas City, Missouri’s Northland area. The project, called Zona Rosa, is a 500,000-square-foot specialty retail, residential and office town center that will open in April 2004. An additional 80,000 square feet of outlots, including office space, retail/restaurant space, a four-screen Majestic Premier Theater, a 300-room full-service hotel and a 150-room extended stay hotel, are also planned. Retail, dining and service tenants that have committed to Zona Rosa include Dick’s Sporting Goods, Barnes & Noble, Express/Express Men, Bath & Body Works, Abercrombie & Fitch, Hollister Company, Limited Too, Buckle, American Eagle Outfitters, Flat Wok, Tomfooleries, Forever 21 and Avalon Salon. Property owner La Vonne Poteet, who named the center after an early 20th century mixed-use development in Mexico City, recruited Columbus, Ohio-based Steiner + Associates because of its unique work in Central Ybor in Florida and Easton Town Center in Columbus, Ohio. “Master-planned retail environments like this are now sought after by diverse interest groups, developers, tenants, property owners, civic officials and consumers,” says Yaromir Steiner, president of Steiner + Associates. “Zona Rosa is surrounded by the Northland’s fastest-growing communities, but the retail community is dispersed. Zona Rosa will bring a much needed focus and character to this area, while speaking to its heritage and way of life.” Zona Rosa is located in Platte County, the second wealthiest county in Missouri. In 2001, the county experienced the highest average new home sales price ($274,831) among all eight counties in greater Kansas City. “This is a site with unparalleled highway access and located in a part of the country where people are accustomed to driving long distances,” Steiner adds. “So we expect our appeal to extend far to the north. Like at Easton, we will see people traveling from the entire region to visit Zona Rosa.”

FOUNTAIN WALK Novi, Michigan Fountain Walk, located in Novi, Michigan, proves the development wisdom of offering consumers something new, while also fitting in an established marketplace. As Michigan’s first lifestyle and entertainment-oriented mall, the 737,000-square-foot center has become a destination attraction in one of Michigan’s most prosperous markets, which already had 2 million square feet of retail and related services. The $115 million development, occupying 74 acres on the bustling 12 Mile Corridor of northwest metro Detroit, is anchored by a 50,000-square-foot Vans Skatepark; an 18-screen, 3,800-seat Emagine Theater Novi; an 84,000-square-foot Galyan’s Trading Company; and a 156,000-square-foot Sears Great Indoors. Early customer reaction has been excellent, says Robert Schostak, president of Southfield, Michigan-based Schostak Brothers & Company, the firm responsible for leasing, tenant coordination services and asset management consultation at Fountain Walk for owner PLC Commercial. Based on current traffic, Vans Skatepark and Sears Great Indoors will see 2 million visitors and 1.5 million visitors per year pass through its doors, respectively. Both the Chuck E. Cheese and Buffalo Wild Wings restaurants located at Fountain Walk are the Number 1 stores in their respective national chains. Galyan’s — the sporting goods store’s only location in southeastern Michigan — is also experiencing strong sales growth, according to David Zoba, Galyan’s executive vice president. Restaurants at the center include the Bamboo Club, Shima Japanese Restaurant, New York Deli and EB Bistro and Grill. Fountain Walk’s dining and entertainment component is rounded out by a 60,000-square-foot entertainment and dining club. The center’s main pedestrian space, named Orchard Drive, also has space for a significant anchor.

THE VILLAGE OF ROCHESTER HILLS Rochester Hills, Michigan The Village of Rochester Hills — a development by Robert B. Aikens & Associates — opened in September 2002 at Adams Road and Walton Boulevard, the site of the former Meadowbrook Village Mall in Rochester Hills, Michigan. The mall has been transformed into an $80 million, 375,000-square-foot shopping center featuring the downtown streetscape concept. According to Bruce Aikens, executive vice chairman, the center is located in the nation’s second wealthiest county with a population greater than 1 million. “The Village of Rochester Hills has created a community-based downtown anchor for Rochester Hills,” he says. The center is pedestrian oriented, with artistic landscaping, park benches and fountains that combine to create a park-like atmosphere. The project is accessible by a main street, which is lined by architecturally distinctive stores that share common building materials, including stone, brick, wood and stucco. The Village is anchored by a 120,000-square-foot Parisian and a 55,000-square-foot Food Emporium. Other merchants include Williams-Sonoma, Pottery Barn, Coldwater Creek, Victoria’s Secret, White House/Black Market, Ann Taylor, Talbots, J. Crew, Eddie Bauer, Banana Republic, The Bombay Company, abercrombie, Abercrombie & Fitch, Hollister Company, Gap, Yankee Candle, See Optical, Baja Fresh and Bravo, as well as former Meadowbrook tenants Haig Shoes, Max & Erma’s, Kruse & Muer, Gourmet Garden, Heslops and The Casual Corner Group.

The Streets of West Chester West Chester, Ohio In May, Columbus, Ohio-based Continental Retail Development will open the first phase of its $100 million lifestyle center, The Streets of West Chester, in West Chester, Ohio. The mixed-use project will feature 500,000 square feet of retail and entertainment space, 400 upscale apartment homes and 150,000 square feet of Class A office space. Located 18 miles north of downtown Cincinnati and 30 miles south of Dayton, the project is near the Interstate 75/Interstate 275 interchange. “Recognized as the heart of Cincinnati’s growth corridor, West Chester is growing as fast or faster than any other city in Ohio,” says David Kass, president of Continental Retail Development. “The demographics, visibility and traffic patterns are all outstanding.” Continental has already received signed leases from Rave Theaters, Champps and Bravo, which will all open in July, as well as Barnes & Noble, P.F. Chang’s China Bistro and Mitchell’s Fish Market, which will open in late 2003. A 75,000-square-foot Dick’s Sporting Goods, as well as some residential units and office space, will come on line in spring 2004. Kass says that additional specialty retailers and restaurants will be announced this spring. “This is a true mixed-use project,” Kass says. “We are pulling it all together and emphasizing the link between the different uses to create a 24-hour district.” David Meleca of Columbus-based David Meleca Architecture, the project’s designer, says The Streets of West Chester has been designed with an open and pedestrian-friendly Main Street feel. The buildings will be constructed with all natural materials, mostly brick, and surrounded by green space, plazas and fountain areas.

Muskegon and Ludington Michigan The Westwood Group, based in Muskegon, Michigan, has partnered with Kimco Developers, a subsidiary of Kimco Realty, to develop Lakes Crossing shopping center in Muskegon. The 281,000-square-foot retail center is located on Harvey Street, south of the busy Sternberg Road/U.S. 31 interchange. Kohl’s will anchor the three-phase, $234 million development. The center will also feature six outlots, which can be either purchased or leased. Confirmed tenants Fairfield Inn, Johnny Carino’s Country Italian restaurant and Logan’s Roadhouse will occupy three outlots. “The strength of the Sternberg Road corridor is the ease of access, strong highway visibility and the opportunity to enhance existing projects with complementary business development,” says Michael Bowen, president of The Westwood Group. The company is developing this center in a booming retail submarket; a 600,000-square-foot regional mall, seven restaurants and multiple free standing retail outlets opened near the Sternberg exit during the last 2 years. Construction on Lakes Crossing began in March and is scheduled for completion in April 2004. Westwood is also developing Ludington Crossing, a 110,000-square-foot retail center, with three outlots, located in Ludington, Michigan. “The Ludington area is a hugely underdeveloped retail market,” Bowen says. The $7 million development will contain an eight-screen, 28,000-square-foot GKC Theater and some sporting goods, electronics and apparel retailers. The center will be built in two phases, with construction starting in June and scheduled for completion in spring 2004.

MOVIE MONITOR The motion picture exhibition industry enjoyed another record breaking year in 2002 and Midwest exhibitors were no exception. Nationwide, box office revenues in 2002 totaled $9.37 billion, up an impressive 13.2 percent ($1.25 billion) from the 2001 record tally of $8.12 billion, according to Nielsen EDI data. Over 1.64 billion tickets were sold last year, a 10.2 percent increase from 2001. Last year, more people attended movies than any year since 1957, when television became widespread. With high-margin concession revenues, it was a profitable year for exhibitors, as opposed to 2001, when many of the largest exhibitors were in bankruptcy. In the Midwest, Regal Cinema and Wehrenberg Theaters raced out of bankruptcy to score record revenues in 2002. Regal merged with two other top 10 exhibitors –– United Artists and Edwards Theatres –– to become the largest exhibitor in the industry. AMC avoided bankruptcy and took advantage of the prosperous environment to buy General Cinema out of bankruptcy. Consolidation will continue in 2003 as several smaller chains are up for sale. A large Midwest movie theater opening in 2002 was the AMC River East 21 theater in downtown Chicago. Chicago was the last major metropolitan city without a stadium-style theater in its downtown area. New theaters to be built in 2003 include Century Theater’s 16-screen complex at Deer Park Town Center in Deer Park, Illinois, and Regal Cinemas’ theater at the new St. Louis Mills in suburban St. Louis. In the coming years, movie theaters will become harder to find. In the past 2 years, three movie theaters have closed for every new theater that has opened. Not only are the exhibitors consolidating on a national basis, but local market share is also consolidating. A main priority of the Midwest exhibitors during the next 5 years is to replace older theaters in secondary markets with one new megaplex theater. As a result, smaller markets that might have had three neighborhood theaters will have one megaplex theater serving the whole market, giving the shopping center that has the new movie theater a unique anchor tenant. Ralph Cram is a principal with Chicago-based Theater Investment Group.

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