Friedman Entertainment Advisors & Consultants - Live Entertainment Venues Anchor City Redevelopment Projects: The Rise of Entertainment Districts
Los Angeles, California, September 16, 2016 (Newswire.com) - There was a time when large entertainment venues were relegated to blighted neighborhoods and the outskirts of town. Land was more available and affordable and, unfortunately, the neighbors in these lower economic areas had less of a political voice to stop the project or complain about their impacts after they were up and running. Many of these venues went on to have long and successful runs. In some cases, surrounding neighborhoods have become re-gentrified with their success, others have remained depressed. More recently, many of these venues have been ultimately vacated and replaced with new models sprouting up closer to city centers often as a driving component of a larger mixed use development coined Entertainment Districts. Municipal agencies have been willing to use a myriad of public financing techniques to get these new projects off the ground and expedite entitlements and land transactions for developers eager to invest significant capital into what will become prime real estate with very healthy returns.
Although their design may be influenced by the architecture and specific needs of their host cities, the general concept is the same. Anchor the district with a major entertainment venue surrounded by restaurants, hotels, movie theaters, and other retail and music entertainment offerings in a safe, self-contained area that allows patrons to wander unimpeded throughout the district. The size of the district is often constrained by budget and size of the area it will replace since it’s rare that there is enough vacant land existing in the target area. Some are simple designs with a single building hosting multiple enterprises and others are elaborate complexes with private streets and multiple buildings. Although some include the development of a new anchor within its initial plans, other districts have simply popped up around existing convention centers, music venues, and sports arenas. Similar to malls, the strategy is for each of the tenants to leverage the traffic of the others and to create cross-marketing opportunities. When one of the anchors has a big event, it drives business for all of the restaurants, clubs, and bars in the district before and after.
With multiple offerings for a range of demographics, the district has something for everyone. In addition to the scheduled live events in the facilities, often there is live entertainment in the plazas to keep the atmosphere alive throughout the district. A key goal is to provide a variety of offerings so it’s not about trying to secure repeat visits to a single establishment, but rather the district as a whole. It becomes the default meeting place and patrons can figure out what to do and where to go once they are there. In effect, it’s like the top music festivals that have developed brands as powerful as any single artist performing on the bill. So now, we have brands like LA Live in Los Angeles, 4th Street Live in Louisville, Kansas City Power and Light District, and Power Plant Live in Baltimore which accomplish the same goal as the festivals: a whole bunch of entertainment offerings at a single location. In addition, although increased traffic generation is sparked by the games, concerts and conventions at the anchor venues, there doesn’t have to be an event for the district to draw. In fact, not only do the anchor venue events drive traffic to the district, event planners are often sold on bringing their events to the anchor venues knowing that the district brings a whole other set of offerings to their attendees who aren’t left trying to figure out what to do when the event lets out. The night has only just begun.
Due Diligence is Key
Certainly, there are a handful of developers who build these entertainment districts who understand both the real estate and entertainment components of the project. For those that do not, it is essential to remember that just because the entertainment component is integrated into a mixed use development (whether as an anchor or smaller piece), the entertainment venue will need to be evaluated as if it were a stand-alone project. As live entertainment consultants, we recommend a separate market and feasibility analysis that ultimately can be used when projecting financial results for the venue and the district as well. In fact, although the venue may benefit from the traffic generated from the other related uses in the district, ironically there may be substantially more competition over talent and patrons because of it. Moreover, there is simply too much on the line for one of the key tenants to fail which will blemish the project as a whole not to mention the rent line.
Source: Friedman Entertainment Advisors