Construction is under way on Bowie Town Center, a 700,000 sq. ft. "Main Street" shopping village in Bowie, Md., a suburb between Washington, D.C., and Annapolis, Md. Originally designed to accommodate a mall only, principals at Chicago-based Simon Property Group and architect RTKL proposed that a village venue would be more attractive and popular for the area's population and future development. Construction is scheduled for completion in the fall of 2001.
Bowie Town Center has already lined up feature anchors such as Sears, Hecht's, and a Safeway grocery store. The food pavilion will be designed after a 19th century train station. The center will also have links to regional hiker/biker trails that run through the city of Bowie. At the heart of the center will be a traditionally themed retail street that will feature architecture, environmental graphics and landscaping that reflect the area's history.
Coming to a theater near you: war of attrition Movie houses pose a challenge for developers. Years of overbuilding, escalating costs and the expected cannibalization of business by new theaters has pushed many of the biggest movie theater chains to the brink of financial collapse.
Regal Cinemas, Lowes Cineplex Entertainment Corp., Carmike Cinemas Inc., United Artists Theater Co., Edwards Cinemas and most recently General Cinemas are among the biggest theater chains in the country that have recently filed for Chapter 11 bankruptcy protection.
As a result, New York-based Prudential Securities predicts as many as 600 theaters could close their doors across the country in the next few years.
"If you go back to the 1980s, department stores got in trouble not because they weren't successful in terms of sales, but because of debt load," says John Millar, executive vice president and managing director of shopping centers for Chicago-based Jones Lang LaSalle.
"I think we have a parallel here. Cineplexes in malls are very successful for both the operator and the malls themselves because they attract a tremendous amount of people," explains Millar.
One firm that saw the problem coming and resisted the seductive powers of movie houses is Weingarten Realty Investors. Drew Alexander, president of the Houston-based company, says his company has little exposure to this problem.
"Years ago, when we were worried, a lot of people thought we were paranoid," says Alexander, who adds that this approach cost his firm some acquisition opportunities. "The theater industry went on a huge expansion plan and had people beating each other up over market share and that didn't make sense to me."
Greg Ham, senior managing director of the Retail Build-To-Suit Group in the Denver office of Dallas-based Trammell Crow Co., predicts that renovating an existing theater - flattening the sloping floor, adjusting the ceiling heights, removing the seats, etc. - to bring it to shell status costs $12 to $14 per sq. ft. After that, owners could be looking to spend another $20 per sq. ft. to get the building to a finish that the tenant can occupy.
"That's why a lot of [the already closed sites] aren't moving off the market," he says. "It's cheaper and more efficient to build a new building."
Ham notes that only a limited number of retailers, such as Marshall's or 24 Hour Fitness, will consider relocating to such spaces. Other potential users include church groups and some specialty shops.
"That's probably due to pricing," says Ham. "For a big-box retailer, it's going to have to buy the theater at a reduced price in order to afford putting in the significant investment to bring it up to the condition it needs."
Only a limited number of theaters have any real prospect of being renovated in the near term and put to productive uses. Those located in centers with strong demographics and heavy traffic will draw the attention of potential new tenants.
Ham adds that the theaters in run-down centers or neighborhoods are doomed to be closed in the immediate future with little prospect of finding a new user.