Retail Traffic: What trends are you seeing in the development and redevelopment of shopping centers internationally and which of them is likely to be adopted in the United States?
Darrell Pattison: Many U.S. developers are trying to export Western ideas about what a shopping center should look like. It's not easy because our format is dependent on the presence of large department stores, which don't always exist overseas. Many foreign shopping centers are anchored by hypermarkets. We are actually seeing some patterning in the United States following that. Wal-Mart is looking at available department store boxes where they'll meet less resistance. We've already seen Target doing that — it's just a matter of time before it could be a trend.
Another thing that we see is foreign markets have an entirely different budget structure for retail projects than in the United States. They create more spectacular spaces, using stainless steel and high-tech glass and very good quality materials. Longer duration is more prevalent. Their thought is not to build things to recondition them in 20 years and tear them down in 30.
RT: Do you think that developers in United States might eventually adopt the same mindset?
Pattison: If you go back to the mid-1960s and early 1970s, a lot of the centers were built as though they would last forever. In the late 1980s, our firm did work on the Lloyd Center in Portland, Ore., which opened about 30 years earlier. What's coming out of the ground nowadays are projects that have the ability to change; 15 years from now who knows what's going to be the right formula? Today, if you offered a developer the option to build something that will last 50 years at a price that's 10 percent more, they will ask, “Who's going to pay me for it?”
RT: How prevalent is the drive toward greenin retail projects?
Pattison: When green design first launched five or six years ago, it seemed like a fad. But, the more people looked into it, the more they realized it makes sense. Developers have to pay attention to their operating costs, so anything that uses less energy makes financial sense. A major expense for the move toward green is getting Leadership in Energy and Environmental Design certification. It requires exhaustive documentation to source and track materials . . . therefore many who are interested and look at the cost don't seek certification. This is what a lot of people have resisted, not green design itself.
RT: What trends are you noticing in the redevelopment of power centers?
Pattison: Malls have gone hybrid, where they are part enclosed mall and part lifestyle center — the same thing is happening with power centers. They are trying to bridge the gap. Now, they incorporate some lifestyle, some restaurants and some open air. Traditional power centers are huge and dependent on parking, so we have seen pushback on the part of many planning agencies resisting applications for a straightforward power center.
RT: Do you think the cooling housing market has diminished enthusiasm for mixed-use?
Pattison: It depends on the market. What has happened is there was an oversupply of condos in Florida and Nevada. These were luxury, higher-priced units for the most part. There still is a demand for housing in a lot of markets, just not $1 million condos. This is an opportunity to develop moderately priced units. Interest rates are a detriment and now there is actually a shortage of apartments. It's a question of whether the rents in that market can justify the cost of development.
Director of Design and Chief Strategic Officer with ka.