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The Mixed-use Frontier: Blending Hotels, Office & Retail

Successful mixed-use ventures result when there is the correct synergy within a diverse tenant group.

By J. Todd Stoutenborough

Over the course of the last several years, forward-thinking developers have implemented strategies to capitalize on the social significance of retail centers as community focal points. 

Riverview plaza in Wilmington, Delaware major inner City Entertainment, Civic, and transportation center designed by Stoutenborough, Inc. provides an exciting environment for the Delaware lifestyle.

They have successfully broadened the scope of retail projects to include elements not found in traditional settings and now these innovators are seeing their strategies become realities. Complete retail centers found in urban and suburban settings across the nation today feature such diverse elements as hotels, office buildings, upscale food service, entertainment complexes and cultural centers. From all indications, the mixed-use development concept is more than a shortlived fad. Rather, it is a genuine and economically valid trend that promises to continue expanding and diversifying. When properly conceived, designed and executed, amixed-use project can create a tremendous synergy that fuels natural growth and prosperity. This synergy comes as a benefit of the center's status as a community focal point and activity place. Emerging in an era when the mall has become the equivalent of the 19th century's town square, modern mixed-use developments are becoming magnets for entertainment, recreation, excitement and community interaction - a place worth visiting. In addition to these benefits, integrated retailhotel developments also can take advantage of the essential "critical mass" that leads to greater consumer convenience through onestop shopping, dining and entertainment. Reduced traffic congestion and greater cost-effectiveness through shared resources such as parking, landscaping and common areas provide further incentives.  Another important element of mixed-use strategies that also serves to keep the cost of the project down in . many areas is the inclusion of office , buildings. Office building populations provide a necessary midday customer base for retailers and restaurants, and they stimulate higher hotel occupancy rates. Their proximity also provides the benefit of shared parking facilities. This alone can save developers up to 50 percent of the total cost of parking construction for hotel use.

Creating a draw

The successful mixed-use project must have the proper blend of the right ingredients in the right place at the right time. Primary among these ingredients is the creation of a "draw," or the main reason for people to patronize the development. Depending on individual community profiles, this can mean many different things and often results from a combination of elements that reflects the community's interests. These range from major upscale department store anchors to off-price power centers, trendy boutiques, public meeting facilities, movie theaters or perhaps a cultural center such as a museum or a concert hall. In Orange County, Calif., the Tustin Market Place, owned by The Irvine Co., Irvine, Calif., has emerged as a retail complex developed to respond to specific community needs. Primary among these was the need for both a pedestrian-oriented entertainment and boutique complex and a high-volume retail center. While these elements may seem juxtaposed, they are integrated via a unique architectural style that creates excitement and an inviting atmosphere. Enticing tourists and business travelers to patronize the mixed-use complex is an important consideration as well. Visitors are naturally drawn to hotels that offer more than just clean lodging and room service. Hotels with pedestrian access to a broad selection of interesting shops, fine restaurants and entertainment alternatives have a distinct advantage over freestanding facilities. As a result, these mixed-use sites are very appealing to business travelers, tourists and meeting planners. Clearly, no single aspect of a mixeduse development can be designed as the draw. Rather, it is the delicate combination of diverse elements that creates the sense of synergy, excitement and vitality that perpetuates the center's success.  

Achieving balance

Media City Center, a 2.6 million sq. ft urban mixed-use development already in its second phase in Burbank. Calif.. reflects the region's unique architectural heritage. The project features a three-level regional mall, a 260,000 sq. ft. off-price retail store, entertainment complex, 300-room hotel and office towers.

Finding balance in the mix of retail, hotel and office space is a tricky proposition requiring substantial economic research and careful evaluation. And while no secret formulas exist, there are certain planning and design considerations that when properly integrated can help ensure the long-term success of a project. These include s ~ a rltan d-use planning, sound phasing strategies, incorporation of community input, and awareness of differences between urban and suburban models. Encouraging smooth, hassle-free interaction among the individual retail and hotel components through prudent land-use planning is essential. Today's developer has learned from the shortcomings of earlier projects where the importance of engineering and the intrinsic link between retail, hotel, entertainment and office components were often overlooked. For instance, one major project featured a pedestrian thoroughfare intended to connect the different elements. However, its design actually forced visitors to traverse hazardous, uninviting roadways. In this case, all the right ingredients were present in the proper proportion, but they were assembled in a way that made the whole substantially less than the individual parts. This in turn actually prevented the center from reaching its full potential for profitability and popularity among consumers and tenants. Community input gathered in the early stages of the project is also critical to achieving balance in the mix. Retail and hotel developers, along with their architects, must listen carefully and reflect community values and tastes in the final product. Increasingly, cities are becoming captains of their own ships by demanding control of their identity. As a result, they balk when a developer attempts to override their interests to impose a "formula" project on their community. Among the most tangible and visible examples of community identity are the retail and hotel establishments. Justifiably, city officials want these high-profile additions to be a reflection of their identity. Imposition of a pre-defined or formulated architectural style is a surefire recipe for disaster. What constitutes a successful style in one community could spell alienation in another. Consequently, a more "contextural" approach to mixed-use architectural design must be adopted. Indigenous themes are becoming more important and often serve as creative launching pads for perpetuating traditional architectural notions in a modern context. 

Urban vs. suburban 

Significant distinctions exist between the urban and suburban models of mixed-use complexes that integrate retail and hotel elements. In urban areas, the key is density and optimization of every available resource. In suburban regions where land is less expensive, retail and hotel integration is somewhat less common. However, the hotel element is often just a short promenade away. Media City Center in Burbank, Calif., is one example of a successful urban mixed-use development. Already in its second phase, the 2.6 million sq. ft. complex on 41acres in downtown Burbank was developed under the leadership of The Alexander Haagen Development Co., Manhattan Beach, Calif., and Homart Development Co., Chicago. It has received tremendous community acceptance and &indeed a reflection of Burbank's community pride. Architecturally, Media City Center's style ties directly into ~Gbank's roots as an industrial and film-making boom town circa World War 11. In its layout and product mix, Media City responds appropriately to the community's need for revitalization. The mix includes a 260,000 sq. ft. off-price retail store, a major three-level enclosed mall with entertainment facilities, freestanding restaurants, 1 million sq. ft. of office space and a 300- room hotel. Still in the early stage of their evolution, mixed-use development projects will become much more prevalent in the decades to come and will evolve to include an even greater diversity of elements. For example, high-density housing will likely emerge as the next major component to be included in many future urban mixed-use projects. In many key areas, this element is even likely to become a legal mandate for both traffic congestion and environmental reasons. The growing proliferation of highspeed rail and other mass transit systems also will herald another vital trend in mixed-use development. Already major retail and hotel complexes are sprouting up around train stations in San Francisco and Washington, D.C. This trend, already fully implemented in Japan and Korea, is expected to reach areas such as metropolitan Los Angeles as well. A prime example of a suburban model for mixed-use development incorporating retail and hotel elements is under way in Fontana, Calif. Called Empire Center, this 5 million sq. ft. development, owned by The Alexander Haagen Co., features a regional mall, an off-price power center, an entertainment complex, restaurants, a research and development center, housing, and hotels, all on 500 acres. Although located on separate lots, the hotels will be connected to the retail complex via pedestrian promenades. Here too. Empire Center's contex- tural "prairie-style" design, made popular by Frank Lloyd Wright, is sensitive to the community and its unique identity. 

development and communiiysensitive design, Empire Center will incorporate retail and hotel elements connected by pedestrian promenades. The 500-acre complex currently is under way in Fontana, Calif.

Tenant identity 

Hotel, office and retail tenants enjoy being a part of the synergistic atmosphere of busy mixed-use complexes. However, they still demand the separate identity found in stand-alone developments. While hoteliers want to offer guests the convenience of nearby shopping and entertainment, they are adamant about ensuring these distractions do not interfere with day-to-day operation or their overall presence and identity. As a result, hoteliers generally insist on securing high-profile locations that provide separate service accesses and distinct guest entries. In addition to ample signage, they also seek a higher degree of controlled parking to ensure that guests will not have to scramble for parking spaces. For these reasons, it is important that the selection of the hotel operator takes place early in the development's planning stages. Enjoying the central locations often associated with mixed-use projects and convenient access to the goods and services of the retail and hotel elements, office tenants also insist on maintaining controlled parking areas and preserving their own identity. Retailers all want the same thing: location, location, location. They want ample parking close by and high-visibility locations with plenty of signage. The key to crafting the retail component within the mixed-use complex is to give everybody a special place - a unique identity. This challenging task can be accomplished through a variety of techniques. In Media City Center, distinctive architecture is used to create different courts and retail groupings. Engineered traffic patterns leading people into the retail area also are integral to the design. A transparent glass exterior gives many of the mall's retailers an extra measure of visibilty from the street. Combining diverse uses, responding to the respective needs of the market and minimizing conflicts is the art of mixed-use design.  

Empire Center's 650,000 sq.ft. second phase provides a 100,000 sq. ft. Entertainment Center, Food Court and Restaurants.

Getting off the ground 

How do such complicated projects get off the ground in the first place? Frankly, it takes a developer with tremendous vision, tenacity and ability to put the many different wheels in motion. Most of today's mixed-use projects are joint ventures. For instance, Media City Center in Burbank is a joint venture of the city as the land owner; The Alexander Haagen Co., a retail developer; and Homart, a retail and commercial office developer. Partnership candidates also include developers from the hotel, entertainment and even residential segments of the industry. Here too, there are no hard and fast rules. Each situation is unique due to varying governing dynamics. With the greater demand for costefficient, environmentally sensitive and community-responsive develop- ments, the members of this industry are beginning to accept the fact that there must be a greater integration of land uses. As a result, there is a tre- mendous need to foster a brand new breed of real estate professional -the mixed-use specialist. Today's mixed-use partnerships are creating an exciting cross-pollination of talent among bright developers and architects. By the 21st century, a talented pool of specialists will have come on the scene who will be well prepared to propel the industry tonewinnovations.  

J. Todd Stoutenborough, AIA, 

Shopping Center World/April