At the Mall, Mariachi Instead of MuzakAMY CORTESE - New York Times Real Estate
New York Times Real Estate
SQUARE FEET | SPOTLIGHT
On a sunny day in early May, more than 12,000 people descended on the Plaza Fiesta Mall in Atlanta for a Cinco de Mayo festival celebrating Mexican heritage. Fourteen bands played mariachi; reggaetón, a sort of Latino rap; and banda, which is traditional Mexican brass music. There were carnival rides, and tortillas sizzled on grills.
The celebration was one of the ways that Plaza Fiesta caters to Atlanta's fast-growing Mexican population. The shopping center is anchored by a Burlington Coat Factory store and a Marshall's, but it also features Hispanic retailers like the Discolandia music store, as well as a sprawling mercado, or market, where 287 vendors in booths sell everything from quinceañera dresses to Western wear to religious statues.
With its open-air center, reminiscent of a Mexican zócalo, or town square, the mall has become a focal point of immigrant life in the region - not only among the 500,000 Hispanics who live within 10 miles of the center, but others from the Southeast.
"It's like you've been transported to Mexico," said Julio Peñaranda, the general manager of Plaza Fiesta. "Pretty much anything you can find in Mexico you can find here."
Centers like Plaza Fiesta are cropping up across the country as developers and retailers begin to grasp the large opportunities presented by the Latino market.
According to a census report released last week, Hispanics are the country's largest and fastest-growing minority group, at 44.3 million, or nearly 15 percent of the total population.
And their purchasing power has surged. Last year, Hispanics pulled even with African-Americans in total purchasing power, or disposable income, and this year are expected to surpass them, according to the Selig Center for Economic Growth at the University of Georgia. From 1990 to 2006, Hispanics' disposable income rose by 832 percent, to $798 billion, compared with 154 percent for the rest of the population. The Hispanic total is projected to grow to almost $1.2 trillion in 2011, according to the center.
In addition, the Hispanic population is young, with 34 percent under the age of 18 in 2004, the latest year for which figures were available from the center, compared with 25 percent for the total population. That means more Hispanics will soon be entering the work force, said Jeffrey M. Humphreys, the director of the Selig Center.
A 2004 survey by the International Council of Shopping Centers of 23,600 shoppers at 52 malls found that Hispanics spent more time at the mall and more money per visit than the general population - 91.5 minutes, on average, compared with 80.6 minutes, and $96.70 a visit, versus an aggregate of $86.30.
"To survive in retailing, you have to market to Hispanics and Asians," Dr. Humphreys said. "Hispanics are now the nation's largest target market."
New Latin-themed shopping centers are being built around the country, and old shopping centers of any kind are being repositioned. The centers typically have a mix of national and Hispanic-focused retailers, and plenty of outdoor space and seating. Often the centers are situated in dense urban areas, where parks are scarce, so the mall stands in for the town square.
"Twenty years ago, no one cared whatsoever about the Latino market," said Arturo Sneider, a native of Mexico and a partner at Primestor Development, a Hispanicfocused developer based in Los Angeles. Projects in heavily Hispanic areas were hard to fund, he said, but that has changed.
In Walnut Park, an area in Los Angeles County where Hispanics make up more than 90 percent of the population, Primestor is developing La Alameda, a $70 million, 225,000-square-foot shopping center and plaza that is scheduled to open next February. Located on the site of a vacant factory, the project was funded by $15 million in economic development assistance from federal and municipal agencies, as well as by private capital. It has attracted tenants like Starbucks and Bank of America.
Mr. Sneider's company also recently completed the $12 million Los Jardines, an 80,000-square-foot center in Bell Gardens, also in Los Angeles County. It is anchored by Famsa, the Mexican electronics and home furnishings giant, and includes tenants like AT&T, Cold Stone Creamery and Taco Bell.
In Texas, Grupo Zócalo, a partnership between local real estate investors and the Legaspi Company, a developer based in Los Angeles that specializes in Hispanic markets, has converted the Fort Worth Town Center into a Latino-themed mall called La Gran Plaza de Fort Worth. Built in the 1960s, the Fort Worth Town Center once drew plenty of shoppers to its stores, which included Sears, Dillard's and J. C. Penney. But it lost business over the years to newer malls and, one by one, the anchor stores left. At the same time, an increasing number of Hispanics moved into the area.
La Gran Plaza, which opened two years ago, will capitalize on that population shift with new tenants like Fiesta Supermarket and Cinema Latino, and a rodeo arena that will hold 5,000 people will be added in the next two years. There is also a family lounge with a large-screen TV.
" ‘Mi casa es tu casa' is a cliché, but we really take that to heart," said José de Jesús Legaspi, the president of the Legaspi Company, referring to the Spanish phrase for "my house is your house."
Retailers are also following Hispanics into the Midwest and Southeast. Mr. Sneider's firm, Primestor, has two major retail development projects in Chicago, and is looking at the Southeast and other markets.
In Charlotte, N.C., the Crossroads Mall is being converted into a Hispanic shopping center by Capital City Development. Rhee Brothers, a company based in Columbia, Md., with 20 specialty supermarkets nationwide, is turning a former Wal-Mart in Duluth, Ga., into a giant Latino and Asian grocery store set to open by year-end.
Serving the Hispanic market requires more than bilingual signs and staff, and many of the needs may be subtle, real estate professionals say. For example, some Hispanic shoppers tend to bring the whole family along on an outing to the mall, so accommodations like extra seating and larger restrooms with changing areas are important. There are also significant cultural differences among Hispanic groups, depending on the region they are from. Many retailers still face a steep learning curve, especially those that cling to a one-size-fits-all format.
But successful retail developments are beginning to make a convincing case. At Plaza Fiesta in Atlanta, there is a six-month wait for spots in the mercado, and management is considering expanding the space to accommodate more vendors.
INSTITUTIONAL investors are becoming interested in this sector as well. The California State Teachers' Retirement System is a partner in Hispania Real Estate Investors, a development group that includes Legaspi and operates Plaza Fiesta.
Mr. Sneider of Primestor, meanwhile, says that he is fielding four to five phone calls a month from retailers, city officials and urban planners trying to understand the Hispanic market. "People understand now that this is a very significant market they need to get educated on," he said.