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Sunshine State Promises Bright Future for Retail

Just when you thought it couldn't get any hotter, the retail market in Florida continues to explode. The Sunshine State's tremendous growth was the topic of discussion at the Florida Retail Summit, sponsored by Shopping Center World, held Feb. 2 at the Omni Rosen Hotel in Orlando. Leading shopping center developers, architects and store designers exchanged ideas and swapped stories about the state of the retail industry in Florida and throughout the country.

Leading off the one-day conference, four industry experts from Dallas-based Trammell Crow Co. presented an overview of the Florida marketplace. Panelists included: William D. Chalmers, vice president of retail properties for the Boca Raton, Fla., office; John M. Crossman, senior vice president and director of retail services for north Florida, Frank W. Herring Jr., managing director for north Florida, and David W. Marks, vice president of retail, all from the Orlando, Fla., office.

"We think Florida is one of the best places in the world to be in this business," Herring said. "Our clients are either in the market and saturated, or they are trying desperately to get into the market."

While development continues all over the state, Orlando, Tampa and South Florida were on the tips of everyone's tongues.

For instance, Herring said, this year Orlando will surpass Atlanta in convention attendance, thereby bringing more visitor dollars into the state.

The construction of Dolphin Mall in Miami and Citrus Park in Tampa may indicate a demand for more malls in the future, Herring said. Other trends in Florida include the slowed growth of power centers, the increased number of neighborhood retail centers and the rapid expansion of food stores and supercenters, such as Wal-Mart's new grocery concept.

Retail categories such as building materials, home furnishings, books and office supplies are also growing, according to Marks. Categories that are weakening, he added, include mass merchandisers, specialty retailers and discount department stores.

Trammell Crow's Crossman and Chalmers also discussed the abundance of entertainment lifestyle concepts, especially in the south Florida counties of Dade, Broward and Palm Beach. The Shops at Sunset Place in Dade County, the Las Olas Riverfront in Broward County and City Place in Palm Beach County are designed with movie theaters and restaurants to extend customer stays.

Following the Florida overview, industry experts spoke at two concurrent sessions: "That's Entertainment! - Trends in Entertainment Centers" and "New Trends in Retail Design."

In the entertainment session, Lawrence Beame, president of Coral Gables, Fla.-based Beame Architectural Partnership; Phillips S. Engelke, vice president of Baltimore-based RTKL Associates Inc.; and Lonnie Peterson, president of Orlando-based Cuhachi & Peterson, discussed how the idea of entertainment is shaping the retail industry.

Shopping centers have gone from space providers to content providers, Engelke said. In addition to shopping, customers are visiting centers in search of an experience. The trick, of course, is adding entertainment elements that augment, not overwhelm, the center's primary offering, i.e., retail.

Not all entertainment elements are like Dave & Buster's, Beame added. Water features, outdoor cafes and prime people-watching spots are all entertaining elements. The idea of outside - centers that open to the streets and communities - is also a main ingredient in entertainment centers today.

The goal behind entertainment enhancements is to attract people to the centers and get them to stay longer and spend more money, Peterson said. Centers and tenants have to keep people interested, and that reality is reflected in the shelf-life of retail stores. Peterson said he once believed that retailers lasted seven years before a retrofit. These days, the retrofit time span is closer to 18 months. Flexibility is key.

In the retail design session, Michael Crosson, CEO of Southfield, Mich.-based JGA Inc., and Dale E. Scott, vice president of marketing for Maitland, Fla.-based Keene Construction Co., discussed how lifestyle positioning, branding and inflation affect store design.

For instance, stores such as Portland, Ore.-based Nature's Northwest are creating lifestyle atmospheres to give consumers a mini-vacation from their hectic lives, Crosson said. The store is an example of how big boxes are getting simpler, as fixtures and visual merchandising take over the design.

Also, the rising costs of design and construction are making it difficult to complete projects on time, Scott added. "The good news is that the business has never been better," he said. "The negative is, I'm not sure there's enough people out there to build the projects that need to be built."

The highlight of the Florida Retail Summit was the 10th Annual SA-DI Awards Presentation/Luncheon. At the luncheon, Shopping Center World presented 15 SA-DI awards and four honorable mentions to design firms from across the country (see SA-DI section for details on the winning projects).

Afternoon sessions included "Meet the Lenders" and "Retail Theming." In the former, experts in the field discussed the types of financing available and the kinds of deals that pique their interest. Panelists included: Robin Carr, regional sales manager in the Orlando office of Charlotte, N.C.-based First Union Capital Markets; Matthew Landau, associate director for New York-based Bear Stearns; Steve Malloy, senior vice president for New York-based Capital Lease Funding; and David E. Schofield, senior vice president in the Orlando office of Baltimore-based Legg Mason Real Estate Services.

Though the roller coaster that was last fall's financial market hurt some lenders, the panelists agreed that there is still a lot of money available to shopping center owners and developers. The biggest change for customers is that lenders have edged toward the conservative side of the desk.

Shorter center lifecycles, the competition among lenders and some overbuilding have caused lenders to stick their necks out a bit less often. This may lead to some less-than-traditional lending types, but, again, the money's still there.

Just a few miles away from some of the most themed spots in the world, speakers at the "Retail Theming" session included: Walter E. Geiger, principal at Orlando-based Morris Architects; John R. Oldham Jr., president and CEO of Jacksonville, Fla.-based Creative Environs Inc.; Daniel West, vice president of business development for Orlando-based ITEC Productions; G. Kirk Kennedy, senior vice president of Orlando-based The Nassal Co.; and Charles J. Yex III, art director for The Nassal Co.

The speakers explained what their companies do - everything from lighting to in-store entertainment - and why theming is important in retail. The goal of theming, they said, is to take people to another place and time that they otherwise wouldn't be able to go.

Retail theming, West said, includes three elements: building a brand, captivating and entertaining, and merchandising. "We are not an architectural firm," he said. "What we do is design the show, the guest experience and all the things that drive the brand."

The Nassal Co., Yex said, designs signature characters such as a giant Raggedy Ann in front of Orlando's FAO Schwarz as well as themed and interactive enviro nments. "People are looking for entertainment in everything they do."

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