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AND THAT’S NO JOKE

Lifestyle centers turn to comedy clubs to broaden appeal

BY MAURA K. AMMENHEUSER

There’s a bit of funny business going on in some of America’s newest shopping centers.

Sure, developers have been blending shopping and entertainment for years. But now some seem to be getting especially light-hearted about the entertainment part: They’re leasing to comedy clubs.

Club owners and landlords say the arrangement works especially well at lifestyle centers. The “lifestyle” label is admittedly difficult to define. But broadly speaking, any open-air, pedestrian-friendly center catering to affluent shoppers could provide an ideal venue for a few belly laughs.

Those who lease to comedy clubs do so primarily to boost the entertainment value of their projects.

“Our motivation was to add to the entertainment mix,” said Bruce Macleod, managing director of retail for Atlantic Station, an Atlanta mixed-use redevelopment project of the locally based Jacoby Development and AIG Global RE Investment Corp. The center will eventually contain 1.5 million square feet of retail and entertainment; the first phase is slated to open next year with an Improv Comedy club, a chain whose biggest owner is New Orleans–based Al Copeland Investments, with 16 of these clubs.

Another high-profile name in the field is Funny Bone; Mitch Kutash owns this chain, though he also runs a few Improv clubs. Currently, Kutash owns 12 comedy clubs, most of them Funny Bones, of which he plans to open five more.

“What really makes the difference between a successful [lifestyle project] and an unsuccessful one? Really, it’s the different uses,” said Gerald S. DiVaris, CEO of DiVaris Real Estate, which leases the 1.8 million-square-foot Town Center of Virginia Beach (Va.), a mixed-use project by locally based Armada/Hoffler Development Co. A Funny Bone comedy club will open there this fall.

Developers of mixed-use lifestyle centers should do whatever they can to build a 24-hour community and extend a visitor’s stay, says Tony Nero, Armada/Hoffler’s president. “They’re a destination place … It’s difficult to find the right nighttime tenant,” he said. “You can do the late-night bar scene, etcetera, but what are people going to do between 9 and 11 [p.m.]?”

A comedy club “brings people to the project for a live activity,” says Yaromir Steiner, CEO of Columbus, Ohio–based Steiner & Associates. That’s rare in a retail environment, he says. Steiner has developed a series of open-air, town-center-style projects, including the following, which contain comedy clubs: Centro Ybor, Tampa, Fla.; CocoWalk, Coconut Grove, Fla. (considered to be one of the first lifestyle centers; Steiner built CocoWalk when he was president of Constructa U.S.); Easton Town Center, Columbus; and Newport on the Levee, Newport, Ky. Steiner also plans to make these clubs part of his Zona Rosa, a New Urbanist center that opened in Kansas City, Mo., in May, and a redevelopment project that is to be called Bayshore Town Center, in Milwaukee. Among the centers owned by others that include comedy clubs are CityPlace, in West Palm Beach, Fla.; Irvine (Calif.) Spectrum Center; and Short Pump Town Center, Richmond, Va.

Developers looking to add a little punch line to the bottom line should note, however, that these clubs are not huge moneymakers; they typically operate only at night, of course, and so their hours are limited compared to those of retailers.

“It’s not maximizing revenue,” Macleod said. “It’s maximizing the experience.”

DiVaris and Kutash pointed out that it’s still cheaper for a landlord to include a Funny Bone than other kinds of live theaters, with their more complicated lighting and equipment requirements. And comedy theaters can draw a wider audience than the typical store or restaurant.

“Comedy clubs have a tendency to have a mixed audience,” Macleod said. “I don’t know if you can profile what a comedy club draws, which is great. It’s like the movies — everybody goes to the movies … That’s what we’re trying to accomplish with it.”

Different acts draw different age groups, says Kutash. Paulie Shore attracts 20-year-olds; Kevin Pollack draws the 35-to-50 set.

As for crossover traffic with other tenants, these clubs offer strong synergy with restaurants because of their nighttime hours. But that means the benefits for daytime retailers are less direct. The clubs do generate window-shoppers, because they sell their tickets hours before a performance. These buyers then hang around the center and browse until show time, DiVaris says.

Even if a club patron doesn’t visit any stores when coming to see the show, says Macleod, she does become familiar with the center and is thus more likely to return for other reasons on some other occasion.

“For us it was all about critical mass,” said Marty Burger, executive vice president of the New York City–based Related Cos., which leased Related Urban Development’s CityPlace, including its Improv club. The club and the restaurants feed off one another, says Burger.

Macleod says comedy clubs like lifestyle centers for the same reason retailers do. “It’s all about tenant mix, location and draw,” he said. “They’d rather be where the people are.”

Developers turn first to cinemas as entertainment magnets because they attract so many people, Kutash says, but comedy clubs are the next best thing, drawing maybe 100,000 people annually. “[Centers are] in dire need of a live entertainment component,” he said. “There really isn’t a lot.”

The popularity of the lifestyle format has influenced Funny Bone’s growth, Kutash says. “Has our strategy changed? Yes,” he said. In the past, he had opened in strip centers; then in 1990 he took space in CocoWalk.

Short Pump, the 1.5 million-square-foot, open-air center that Forest City Enterprises opened last year, plays host to Funny Bone — and it is a fairly typical location for Kutash now. “It does real well,” he said. Funny Bone plans to open five new clubs in lifestyle centers in the coming year (its most aggressive schedule to date), and Kutash also intends to move a few older clubs from strip centers over to lifestyle projects. “We’re getting more opportunity now than we ever have,” he said.

Comedy clubs are spreading to other retail venues too. There has been an Improv club at Ontario (Calif.) Mills (one of The Mills Corp.’s value retail and entertainment enclosed malls) for two years. Club manager Frank Kelley says it has been so successful there that Copeland hopes to open clubs at more Mills centers.

But none of this means that every type of center will suddenly start to boast a comedy club.

“It depends on the situation,” said Burger. “Given the right setting and right tenants around them, it can be a good use.” Clubs do especially well where there are plenty of restaurants.

“They’re great tenants, but they’re very sensitive to competition,” Steiner said. “You can’t have two comedy clubs in [one town]. They’ll kill each other.”

Kutash agrees. “They’re hard to operate — very talent-driven,” he said. “It’s very, very difficult to find [people] who can do 45 minutes of stand-up comedy.”

“The traffic’s very much dependent on the act,” Steiner said, and not every comedy shop has the chops.

A club must be very successful to be able to afford space in a lifestyle center, Kutash says. “I don’t think I can count three or four people who have done it successfully at other lifestyle centers,” he said.

But Kutash certainly has. “Once a developer goes with us, we almost always get a call when they do their next project,” he said.

“We’re putting [comedy venues] in every project we do,” said Steiner, who counts five over the past 14 years.

And that’s no joke.