Themed Megaplexes and the Future of Commercial Development

"As shopping mall owners turn to increasingly lavish entertainment to attract the crowds once drawn by department stores, an upstart movie chain with opulent theaters that include valet parking, babysitting and restaurants is emerging as a big winner.

Muvico Theaters Inc., founded by an Iranian immigrant who fell in love with Hollywood as a boy going to his local cinema, operates 12 theaters and says it will double that number over the next few years. The company also plans to build what it expects will be the nation's biggest theater by seats -- 6,500 on 26 screens.

The Florida-based chain has found that glitz can overcome, at least so far, declining movie ticket sales that have hurt other chains. At the Muvico Egyptian 24 in Hanover, Md., outside Baltimore, moviegoers are greeted by reproduction hieroglyphs and huge statues. Specific seats can be reserved online and kids can be dropped off in a supervised playroom. At the Muvico Palace 20 in Boca Raton, Fla., valet parking is offered and mint ahi tuna is on the menu at the full-service restaurant. Customers can sink into six-foot-wide loveseats in the balcony to watch the movie with a glass of wine from the bar.

Mixing flash and service seem to work -- attendance at the Egyptian 24 last year was 2.5 million, the company says. Muvico expanded during the sharp downturn in the theater industry while other chains suffered. Now, Hamid Hashemi's theaters are in demand by mall owners who are becoming increasingly creative in finding tenants to replace department stores, which have consolidated in recent years. One solution? Developers are building "lifestyle centers," outdoor malls that try to emulate a neighborhood, complete with entertainment and restaurants in addition to shopping."

Commercial developers must respond to the changing dynamics of consumer behavior. We used to shop in a town square surrounding the courthouse. Now with these "neighborhood centers" consumers are gravitating back to the town square in a modernized approach. EF

This article was published by Ryan Chittum, a staff reporter for the Wall Street Journal. Click here to access the full article.