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C+CT

Center shares its trademarked entertainment model

October 18, 2019

Hurricane María nearly destroyed The Outlet at Route 66, in Puerto Rico. Ultimately, though, the storm only made this property in Canóvanas, a municipality on the outskirts of the Greater San Juan metro, stronger than it had been.

The center remade itself as an entertainment and retail destination after the September 2017 hurricane inflicted some $55 million in losses. The result has been so good that landlord Belz FOM PR SE (which the local Tirri family owns), is franchising its entertainment model to other malls, through Levy Commercial Realty, a Germantown, Tenn.–based retail broker. “We were able to turn adversity into advantage, thanks in part to several tenants that stood with Puerto Rico and made it happen,” said Justin Tirri, the outlet’s president, citing Aldo, Burlington, Calvin Klein, Guess and Tommy Hilfiger. Their decision seems to have paid off: Post-María foot traffic has increased across the mall.

The visitor magnet is Sector Sixty6, the center’s trademarked entertainment model. Among its attractions are an indoor cart-racing facility, some racing simulators, a game arcade, an indoor rope course and an eight-lane bowling alley. On an outparcel, meanwhile, Top Eliminator Dragsters offers patrons the opportunity to experience drag racing safely.

Entertainment now occupies about a third of the Outlet at Route 66 gross leasable area, a huge jump from about 5 percent before September 2017, when the category 5 hurricane hit.

The Tirri family, investors also in cargo and tourism, took full ownership of the mall in 2005, when Belz Enterprises, which built it on land acquired from the family, sold the Tirris its 80 percent stake. The mall was doing well until the Puerto Rico recession began, at about that time, says Tirri. Population erosion combined with the bankruptcy reorganizations of several U.S. retailers only aggravated things and crushed rents. Another challenge was people’s perception that the center was too far from the metro area.

The center’s main draw now is the electric-cart-racing attraction, franchised by Irvine, Calif.–based K1 Speed, which has helped expand the center’s market radius considerably, according to Tirri. “Ninety percent of our K1 Speed consumers live at least an hour away from us,” said Tirri, who holds the franchise rights for the rest of the Caribbean as well as Panama.

“The turnaround of this outlet is proof of the star role a distinctive entertainment offering can play in today’s challenging retail market”

Some of the outlet center’s attractions are the work of the in-house design team — including Arcade Mania, a 40,000-square-foot game arcade. Karma’s Wine Bar & Beer Garden — a 380-seat casual-dining restaurant with a wine cellar, a cigar room, party rooms and a bar — was a creation of Tirri and his team too, after some well-known casual-dining chains turned them down in the wake of the hurricane. The wait time at some of the attractions is long, which prompts visitors to visit the stores and dine at the mall, says Tirri.

The turnaround of this outlet is proof of the star role a distinctive entertainment offering can play in today’s challenging retail market, says Steven Levy, principal broker and chief manager of Levy Commercial Realty, which is brokering Sector Sixty6 in other markets. “We are convinced entertainment users will play an instrumental role in the conversion from the old to the new retail era,” said Levy, noting that this concept is suitable for spaces vacated by department stores and other large tenants. “Many fine players are in the field, but many are limited to just one thing, such as hip bowling centers, ropes courses, indoor racing, arcades, trampoline parks, climbing walls, craft cinemas, et cetera,” Levy said. “Few have the wide assortment of major entertainment components featured at Sector Sixty6.

By María Bird Picó

Contributor, Shopping Centers Today