For the pioneer real estate development in experiential retail, it’s time for a tenant update.
Universal CityWalk is on a campaign to adjust its tenant mix, adapt to public transit and spruce up its already popular appeal – 26 years after it opened.
“It’s the original lifestyle center prototype,” said Modesto Alcala, general manager at Universal CityWalk Hollywood and senior vice president of Food and Beverage. “I get to work with people who are collaborative, everything from street artists to people in the food business.”
On Oct. 15, CityWalk announced the addition of NBC Sports Grill & Brew, a sports-dining establishment, to open in 2020, taking the place of Tony Roma’s and joining a line-up of recently opened restaurants, including the August-opened Antojitos Cocina Mexicana, VIVO Italian Kitchen, Jimmy Buffett’s Margaritaville and Voodoo Doughnut.
Universal Parks & Resorts, the subsidiary of Comcast Corp. that runs Universal CityWalk, does not provide annual foot-traffic datas, but all indications are that the numbers are healthy and rising.
“Unfortunately, we don’t disclose attendance figures – for either CityWalk or the theme park,” said Audrey Eig. vice president of Publicity and Public Relations at Universal Studios Hollywood.
Yet the website Statista reports, “Over the last few years, the attendance at Universal Studios Hollywood has increased annually, reaching 9.15 million visitors in 2018.”
Earlier this year, Burbank-based Themed Entertainment Association ranked Universal Studios Hollywood at No. 9 on its 2019 list of most visited theme parks in America. Magic Kingdom at Disneyworld in Florida and Disneyland Park at Disneyland Resort in Anaheim, owned by Burbank-based Walt Disney Co., occupied the top two spots.
Rising attendance at the park correlates with new attractions. In 2016, The Wizarding World of Harry Potter opened to long lines. Universal also debuted a ride based on the 2015 movie “Jurassic World” and its annual Halloween Horror Nights has become a seasonal driver of attendance. As the prime entrance to the park, CityWalk benefits from all those consumers in close proximity to its tenant restaurants and retailers.
Despite its quarter-century history, CityWalk feels fresh because its business model provides a counterbalance to retail’s current woes.
As Amazon.com Inc.-driven e-commerce has carved off business from mall department stores, retail landlords have responded with “experiential retail” and property facelifts. Last summer, Taubman Centers, owners of the aging Beverly Center in Los Angeles, reopened the eight-level, 100-store retail destination after having sunk $5 billion into an overhaul which required a facelift of hipper restaurants and a return on the investment that remains to be seen.
Unibail-Rodamco-Westfield announced earlier this year the details of its plan for a $1.5-billion redevelopment of Westfield Promenade in Woodland Hills, to include retail, residential and office units, in addition to a 5,000-seat sports and entertainment stadium.
“Malls can quickly feel outdated, even the experiential ones, so they must continue updating their offering,” Professor Felipe Caro at UCLA Anderson School of Management told the Business Journal. “CityWalk might need to up its game to stay current. That said, it’s so hard to move around L.A. that each of these malls has a captive crowd in their territory.”
Westfield’s properties and Caruso – which owns the Americana at Brand, Commons at Calabasas and the Lakes in Thousand Oaks shopping centers – are leaders in experiential environs, yet they owe much to concepts explored by CityWalk.
When CityWalk first opened in 1993, it was a turning point for Universal Studios.
The movie studio released Steven Spielberg’s “Jurassic Park” that June, single-handedly ushering in the digital age, with computer graphic imagery pervasively transforming cinema. But CityWalk, which opened a month before the movie, had a similar transformative influence on retail.
On the surface, this mélange of 30 stores, shops and restaurants — with facades referencing Hollywood cinema and Universal properties — purported to be retail in-fill on the walkway visitor took between parking lots and the theme park. However, experts agree that, on a fundamental level, CityWalk turned out to be a game-changer.
“It was a pioneer in the world of experiential retail,” Caro said. “In hindsight, it was a good choice because now it’s well known that malls need a strong experiential component to compete with e-commerce.”
Sure, the particulars along CityWalk have changed — rare spin-offs of Pink’s Hot Dog, of Hollywood, and Voodoo Doughnut, of Portland, have set up shop along the busy quarter-mile stretch of walkway — yet, while the visual pizzazz and tone of over-the-top CityWalk has not changed all that dramatically across the years, the retail industry has.
CityWalk’s true influence comes in a familiar marketing concept: theming.
What essentially sets Rick Caruso’s malls apart from other outdoor shopping centers is the attention to detail — from the Disneyland Main Street U.S.A.-meets-Italia architecture to the old-fashioned Americana of clocks and trolleys and vintage music. Likewise, Westfield followed suit with The Village, abundant with homey, small-town flourishes. Even Pasadena-spawned Trader Joe’s chain has couched its successful niche on theming in the supermarket segment on everything from product branding to in-store murals at individual stores celebrating the locality of their respective markets.
That kind of theming harkens back to a stroll through CityWalk, where a giant blue-neon King Kong looms overhead, a monumental version of Eddie Van Halen’s guitar can be seen on the east end by the Hard Rock Café, and — at the other end, towards the studio tour’s entrance — the Billabong store’s inverted surfboard awning very obviously replicates the shark’s fin from the progenitor of Universal’s most important and foundational film franchise, Spielberg’s 1975 thriller “Jaws.”
“It’s unclear how much of the experiential component of the CityWalk was a deliberate choice at the time,” Caro said. “However, that’s how business works. Sometimes you just have a lucky break. Regardless, the CityWalk was able to seize the opportunity.”
Earlier this month, John Simones — lead architect on the original Universal Master Plan, including CityWalk — returned for a visit to the project designed by the architectural firm he now runs, Jerde Partnership, as its co-chief executive and design director.
Strolling through the CityWalk promenade, Simones said he is still proud — 26 years and many retail centers later — of what he and his team accomplished in Universal City.
“It attracts people from all kinds of backgrounds, from all over the world,” he said of the urban entertainment center, or “UEC,” as he calls it.
The original CityWalk had a gross floor area of 470,000 square feet, and a $1 billion expansion in 2000 added 93,000 square feet to the footprint, totaling 560,000 square feet. Overseen by firm namesake Jon Jerde (who passed away in 2015), CityWalk opened in 1993, after which the firm designed sequel CityWalk sites in Orlando, Fla. and Osaka, Japan, opened in 1999 and 2001, respectively.
“While Osaka was a street design not dissimilar from the original, Orlando was different in that it was more of a cluster or hub where people gathered, rather than a linear street,” said Jerde spokesman Greg Rodgers.
Originally, CityWalk was part of a larger master planned project at Universal City.
“At the time, Universal was under MCA and Lew Wasserman and Syd Sheinberg lead the company,” Simones recalled.
Phase I consisted of the central area occupied by dancing waters and a circle of restaurants that includes Bubba Gump Shrimp Co., Johnny Rocket’s Restaurant & Sports Lounge and Wasabi stretching westward to the mouth of the theme park.
“It was a very cool idea because Universal is a globe,” Simones said of the transparent dome-like cover to the site’s central courtyard. The food plaza, with its subdued green coloration, was designed as “a place where you can stop, cool down,” he said.
Phase II was the Hard Rock Café and food court section in back. Gone are the B.B. King’s piano bar and Gladstone’s 4 Fish, added in the final parts of the phase.
“A lot of people thought we were kind of crazy,” Simones recalled regarding the tenant mix, which, unlike other shopping centers, was bookended by the cinema and the studio and didn’t have any major retailers to anchor it. “What it created was the first UEC.”
CityWalk is one of now dozens of likeminded urban entertainment centers Jerde has designed. In California, the firm’s portfolio includes Pacific City in Huntington Beach, Del Mar Plaza, The River at Rancho Mirage, Santa Monica Place across from Santa Monica’s Third Street Promenade, and the recently shuttered Horton Plaza in San Diego.
Alcala, general manager at Universal CityWalk Hollywood, alluded to another component crucial to CityWalk’s success that is more intangible to other malls and is, ultimately, at the core of what Universal Studios is selling: Hollywood magic.
“A couple of weeks ago, we were showing ‘Joker.’ We got a call that (actor) Joaquin Phoenix wanted to stop by and drop in on a screening of the movie,” Alcala said, adding that the Academy Award winner greeted guests before two screenings of the Oct. 4 release.
Weeks earlier, “Get Out” filmmaker Jordan Peele was spotted at the Sept. 12 launch of the annual Halloween Horror Nights event, which included a maze attraction based on his film “Us.”
UCLA’s Caro said that this type of customer care and Hollywood allure has proven a magnet for visitors.
“CityWalk is the only experiential mall that can be reached by subway,” Caro said. “There are several projects to expand the subway before the (2028) Olympics and that should benefit the CityWalk.”
The designer of the venerable retail walkway offers a more succinct summation of CityWalk’s appeal.
“They don’t come to shop here,” Simones explained. “They come to have a good time.”