PRINT THIS STORY:

CHANGE TEXT SIZE:

WITH ‘FOOD COURT OF THE GODS’ ANCHOR, WHO NEEDS THOSE DEPARTMENT STORES?

BY MYA FRAZIER

Shoppers feeling peckish after working their way through The Shops at Columbus Circle in Manhattan’s Time Warner Center might want a bite in one of the restaurants on the fourth-floor “food court.” Then again, maybe not, given that the tabs at some of those venues easily run $400 a head.

To help anchor the center’s 2.8 million-square-foot retail portion, the developers recruited Michelin-rated three-star chefs to open restaurants in what the media dubbed a “food court of the gods.”

But despite the discrepancy between these prices and those charged on the floors below, at Borders Books, Cole Haan or J. Crew, the landlord and some observers say the fourth-floor restaurants remain an important attraction at the $1.7 billion Time Warner mixed-use development.

“The restaurants are one of the most important anchors,” said Kenneth Himmel, president of Related Urban Development, the Related Cos. division that spearheaded the project. “This is an unprecedented dining mix within a retail setting.”

But they aren’t anchors in quite the way they were originally intended. During the early planning stages, The Shops at Columbus Circle was supposed to rival Madison Avenue in critical mass of luxury retailers, says Himmel. That was all the better to mirror Time Warner Center’s other prestigious components: a Mandarin Oriental Hotel, the Jazz at Lincoln Center performance hall and 195 condominiums, one of which sold for $42.5 million. The 80-level building also includes Time Warner’s corporate headquarters and an additional 1 million square feet of offices.

Not far into the leasing process, however, there was a change of course.

“Reality set in,” Himmel said. “Success of this project rested in large part on its ability to integrate itself properly on the West Side of New York. You can never compete with Madison and Fifth avenues, where luxury couture retailers get 10 people a day and they hit their numbers.” The end result: an upscale, but not quite luxury, tenant mix that includes Coach, Eileen Fisher, Hugo Boss and Tumi. Borders and a Whole Foods store give the project mass appeal.

But the restaurants were not downscaled. “Where they really retained luxury was in the restaurants with the biggest star power,” said Faith Hope Consolo, a New York City-based real estate broker responsible for sealing several tenant deals at the Time Warner Center.

And the stars shined brightly, grabbing a lot of media attention. Himmel brought in chefs Masa Takayama and Thomas Keller to open two of New York City’s priciest new restaurants, Masa and Per Se, respectively. With Jean-Georges Vongerichten’s V Steakhouse and Randy Gerber’s Stone Rose Lounge added to the lineup, the world’s most high-end food court was born. Two more celebrity-chef-driven eateries, Charlie Trotter’s Seafood Brasserie and Gray Kunz’s Café Gray, offer their own upscale fare on the third level. Per Se’s build-out alone is estimated to have cost $12 million.

In the trade-off for foot traffic made by offering moderate and mainstream retail, the pressure to keep the Shops at Columbus Circle upscale landed squarely on its collection of culinary superstars.

Time Warner Center made its debut in February 2004 to great numbers. Despite delayed openings, a smattering of less than flattering reviews by critics (including the one-star review of V Steakhouse by The New York Times), and an electrical fire that shut Per Se for months, Himmel remains unfazed.

“We are on a roll. Café Gray is on fire. Per Se is sold out through the end of the year. The only marginal performer had been V Steakhouse, and they’ve picked up in the fall.”

And with most of his tenants reporting impressive September sales figures at press time, Himmel was anticipating that October would turn out to be the best month yet. Himmel also says he expects to post in excess of $1,200 in sales per square foot for the year. “You can count on one hand the number of developments that average over $1,000 in sales per square foot,” he said.

The un-anchors
But are the people who unload $300 for a prix fixe lunch at Masa or who order $150 nine-course tasting menus at Per Se the same as those shopping at Sephora and Benetton just below? Maybe not. The restaurants may be anchors in the sense that they enhance the image of the overall project, but they are not a destination for shoppers in the way that department store anchors are. Indeed, Himmel recently installed an elevator to whisk restaurant patrons directly to the fourth level, allowing them to bypass the retail completely.

Nevertheless, if what has happened to retail rents around the center — up 20 percent since the February opening — is any indication, the mix works, Consolo says, largely because of the uniqueness of the restaurants. And that’s unprecedented, she says. “Anchorless malls and vertical retail has never worked in Manhattan before.”

Furthermore, the diluted luxury retail mix simply reflects the times. “There is no pure luxury shopper anymore,” Consolo said. “Today she has a Chanel handbag, a Gap T-shirt and a pair of Nike sneakers on. She’s a cross-shopper. No one goes head-to-toe luxury anymore.”

The dining element of Time Warner Center will lend glitz and glamour, agrees Kurt Barnard, industry watcher and publisher of Barnard’s Retail Trends Report, a bimonthly newsletter. It might not lure local shoppers, though, he speculates. “Time Warner is probably a tourist attraction,” said Barnard. “I wouldn’t be surprised if it is more out-of-towners frequenting the center than New Yorkers, who will likely go there once or twice and then go back to their regular haunts. For a long life, it will depend on tourists.”

The Tourist factor
Fine restaurants have long played a complementary role to luxury retail in another tourist mecca: Las Vegas. Like Time Warner Center, Las Vegas is a tempest for street-level foot traffic, driven by entertainment offerings and a booming convention business.

General Growth Properties’ Grand Canal Shoppes at The Venetian resort benefits from several high-end eateries, including celebrity chef Wolfgang Puck’s Postrio. At the Bellagio resort, Le Cirque and other fine dining options are in close proximity to the retail component, Via Bellagio; tenants include Chanel and Yves St. Laurent.

Simon Property Group’s The Forum Shops at Caesars cornered the city’s luxury market early on, opening in 1992. The center, now spanning 675,000 square feet, is one of those rare projects that Himmel refers to, bringing in more than $1,000 in annual sales per square foot.

But a recent remerchandising of the mall’s tony Spago restaurant begs an important question: Can fine dining and mall culture mix even under the best of circumstances? Puck brought his Southern California eatery to the Forum Shops in the early ’90s as a pricey offering aimed at the affluent. In 2001, however, he spent $1 million remodeling the place into a bistro with more-moderate menu offerings, including sandwiches, in an appeal to mainstream consumers.

At another tourist-heavy project, Mall at Millenia, Orlando, Fla., Taubman Centers relies on two white-cloth chain restaurants, Brio Tuscan Grille and McCormick & Schmick, to provide luxury shoppers with an alternative to the food court. This 1.1 million-square-foot mall, co-developed with The Forbes Co., features such luxury tenants as Gucci and Cartier. “If you’ve got Neiman Marcus, a restaurant that appeals to a Neiman Marcus customer is in order,” said Richard Strauss, a Taubman vice president who oversees restaurant leasing for the 22-mall portfolio.

Two more-moderately priced restaurants, Cheesecake Factory and P.F. Chang’s, appeal to the mall’s Gap, Macy’s and Urban Outfitters crowds, Strauss says. Though Orlando has its share of upscale consumers, most of the mall’s luxury business is done with well-heeled tourists from abroad.

At Mall at Millenia, New York City sophisticates may sniff at the chain restaurants as upscale dining options, but at most malls, chains are the only upscale restaurants interested in leasing. High-end steakhouse Capital Grille, launched in 1996 by Atlanta’s Rare Hospitality, has opened four mall units in the past two years, bringing its tally of mall units to five, out of 21. Though Capital Grille charges nowhere near the prices at a Per Se or a Masa, its restaurants average checks of $70 per person. Capital Grille, Brio, and McCormick & Schmick are about as far upscale as most malls will be able to go. The chef-owned-and-operated model employed at Time Warner Center won’t play in smaller markets, observers say.

Take Nat Comisar. At one point, he considered relocating his tony downtown Cincinnati restaurant, Maisonette, to an outparcel at General Growth’s Kenwood Town Center, in a suburb of the city. After careful consideration, however, Comisar deep-sixed the idea. He came to think that Maisonette, Mobil Travel Guide’s longest-running five-star restaurant, could never mix with retail, not even the luxury variety. To Comisar, the two formats are antithetical.

“Fine dining can’t be perceived as part of a chain or larger organization,” he said. “The products that are offered at one store, even a luxury store at a mall, are pretty much offered at another store in another part of the country. What’s offered at a restaurant of our sort you won’t find any other place.”

A few restaurateurs at The Shops at Columbus Circle may well see things differently, though he could point out that they aren’t actually feeding shoppers and are therefore not in fact part of the mall.

But Shops at Columbus Circle customers need not go hungry in any case. Those unable to afford the prices on the fourth floor can take an escalator ride to the building’s concourse, or basement level, to the Whole Foods supermarket. There they can buy a prepared meal and enjoy it in a dining area at the entrance to the grocery store.