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FAMILY BUSINESS

A new generation of anchors draws out families’ visits to the mall

By Sascha Brodsky

Adults visiting Wannado City might think children are taking over the world. The 140,000-square-foot theme park, at The Mills Corp.’s Sawgrass Mills, in Fort Lauderdale, Fla., lets kids pretend to do everything from collect trash to fly airplanes. But the business of attracting children to malls is anything but a game.

While the young ones are playing, their parents are spending real money not only at Wannado City but also at the establishments of the 2.2 million-square-foot mall’s other tenants. That is why family-friendly entertainment concepts such as Wannado City are creating buzz among landlords. Even at malls with small trade areas, anchors that bring families in together can help boost traffic, length of stay and amount of money spent, observers say.

What is needed is “to make shopping centers a destination where the whole family wants to spend the day,” said Paco Underhill, managing director of Envirosell, a New York City-based retail consulting firm, who has written much on the subject of making malls more interesting.

Wannado City is a prime example of an anchor that catches and holds customers’ attention, says Gregg Goodman, Mills’ executive vice president of anchor leasing. “The great thing about Wannado City is that it brings repeat customers because there are just so many rich activities,” he said. “We’ve seen an increase in traffic since it came here.”

The theme park opened its doors in August 2004 and drew 700,000 visitors during its first year. Visits last about five hours on average, according to the company. By comparison, the average mall visit lasts only an hour and a half, according to a 2003 study by ICSC. Those extra hours can translate into a big profit boost. Shoppers who spend at least three hours per visit in a mall spend nearly $200, compared to the average ticket of $83.30 for all mall visitors, the research shows.

Getting parents and their children to visit the mall together is good for the additional reason that kids have a big influence on adults’ shopping habits, says Candace Corlett, a principal at consulting firm WSL Strategic Retail. According to a recent WSL report, 63 percent of the mothers the firm surveyed say they spend more when shopping with their teens, and 30 percent report doing so when shopping with children under 12. Most of Wannado City’s patrons are between 3 and 13.

Wannado City is just one of the attractions Mills is using to court parents and children. In 2003 the company formed a marketing alliance with the nonprofit PBS Kids to open PBS Kids Backyard “experiences” in its Cincinnati, Pittsburgh and St. Louis Mills projects. PBS Kids Backyard is not a store, but an educational environment that provides a place for families to play, learn and explore together. That year Mills also teamed with developer Burroughs & Chapin and NASCAR to open the first NASCAR Speedpark at Concord (N.C.) Mills. The concept, which simulates a stock car race on a real track, is now also operating at Vaughan Mills, outside Toronto, and at St. Louis Mills.

Mills is not the only mall owner making its properties more family-friendly. Several malls in the portfolios of CBL & Associates Properties, General Growth Properties, The Macerich Co. and Simon Property Group include such family attractions as skate parks and Imax theaters.

Now, faced with an impending glut of empty former department store spaces, even more landlords are intrigued by such concepts as Wannado City as a means of boosting their malls’ regional profiles, filling large spaces and lengthening visits.

Federated Department Stores recently announced plans to sell 68 stores in 66 malls next year, which offers landlords an opportunity to turn those properties into something more entertaining for families, says Underhill.

Mills is confident that family entertainment can succeed in more-traditional regional malls with smaller trade areas. The Arlington, Va.-based REIT, best known for its Mills megamalls, is adding more family-fun elements to the 5.3 million-square-foot portfolio of six traditional regional malls it acquired from Toronto-based Cadillac Fairview Corp. in 2003.

Mills is trying to bring more theaters, particularly Imax, into those regional properties, Goodman says. Mills’ other plans for this portfolio include adding a PBS Kids Zone to the 885,000-square-foot Galleria at White Plains (N.Y.), installing a movie theater, ice skating rink and an ESPN X Games Skatepark in the 959,000-square-foot Northpark Mall, Ridgeland, Miss., putting a Bass Pro store in The Esplanade, a 735,000-square-foot mall in Kenner, La., and bringing a Bally’s gym, an ESPN X Games Skatepark, a NASCAR Speedpark, a basketball facility and an NHL-themed ice rink to its 869,000-square-foot Dover (Del.) Mall.

Lucky Strike Lanes bowling centers is another concept that works well at regional malls, “because it draws a big lunchtime crowd,” said Goodman, though bigger, more expensive projects like Wannado City “would be more of a gamble, because they need to be more of a regional draw.”

Space is a major issue facing developers that place entertainment venues into centers. A Lucky Strikes bowling lane measures roughly 20,000 square feet, a NASCAR Speedpark runs to about 50,000 square feet, and a Wannado City would require some 140,000 square feet, says Goodman. By comparison, the average department store measures about 115,000 square feet.

“A major challenge with something like Wannado City is the amount of free height that we have available,” said Goodman. “It’s generally easier to retrofit for retail rather than entertainment.”

Building a massive project like Wannado can also be expensive, of course. “From time to time, we will give a build-out allowance to a project of this type that we are excited about,” said Goodman. “But projects like this have more risk than retail, so we look for a higher return as well. The investment has certainly paid off for Mills.”

Luis Javier Laresgoiti, the creator of Wannado, says observations of his own three children helped inspire the concept. “Unless you are going to a toy store, kids really don’t like going shopping,” he said. “It’s not fun for anyone. So we wanted to create a way that would make going to a shopping center fun for everyone.”

Wannado City is an adaptation of Mexico City’s popular La Ciudad de los Niños park. The concept had to be pumped up to translate it from the original location in Mexico.

“Kids are more sophisticated in the United States,” Laresgoiti said. “For example, in Mexico we just have a standard Microsoft flight simulator, but in this country we use a real flight simulator that is used for training professional pilots. That’s because in Mexico most children have never been on a real plane, but in the U.S. most of them have been on one several times.”

Wannado’s creators needed a high-traffic U.S. location so they could recoup their investment of $45 million in building costs. After talking with several developers, they settled on Sawgrass Mills because it draws 24 million visitors a year.

On top of the $29.95 ticket charge for children and $15.99 ticket charge for adults, Wannado City also sells merchandise in a boutique. The theme park earns extra revenue by charging a fee to such companies as CNN, Publix and Spirit Airlines, which sponsor the park’s newsroom, grocery store and airplane experiences, respectively. Laresgoiti declined to disclose revenues, but Forbes magazine reported in September 2004 that the unit was projected to post about $30 million in sales its first year.

Wannado City is owned by Fort Lauderdale, Fla.-based Wannado Entertainment, which is a division of Corporación Interamericana de Entretenimiento, of Mexico City, says it plans to open a second unit at Mills’ Meadowlands’ Xanadu mall in New Jersey in 2007, and the company is seeking sites for 10 more in major U.S. markets. Wannado Entertainment has also signed to develop similar amusement parks in Dubai, United Arab Emirates; and in Singapore, says Laresgoiti.

From the landlords’ perspective, adding such concepts is not simply a case of “wanna do,” but rather “gotta do,” quips Underhill.

“Bringing in more families is a survival issue, because landlords need to become place makers,” Underhill said. “With so many shopping venues, there is more competition, so landlords can’t just sit back and collect rent anymore.”

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