Creativity is watchword for power center developers in '98.

As we enter the second half of 1998, the combination of low inflation, a strong economy and a good job market are all contributing to the solid growth of the retail market. But the boom today differs from the market upswing of the early 1980's.

Today's shoppers are looking for alternatives to the shopping malls that cropped up during that era like mushrooms after a rainstorm. Thus, one trend that has gathered steam over the past year is the "de-malling" of America, as many smaller and functionally obsolete suburban shopping malls are being replaced with big-box stores. These hugely popular stores are typically one-story facilities of more than 25,000 square feet that focus on providing value and selection in narrow market concepts.

Big box stores are developed in power center clusters that require at least 30 and as much as 100 acres. But because the New York metropolitan area suburbs are so crowded, power center developers have been challenged this year to find room to build these warehouse-sized stores.

Creativity is the watchword. An abandoned chemical plant or gravel pit may be the right size to house the next home improvement or office superstore. A vintage mall from the '50's or '60's may be located at a regional highway interchange - a perfect site for a power center. Although the expense can be great, and the renovation difficult, the rewards often far outweigh the risks.

Starwood Ceruzzi employed these tactics this year in our redevelopment of Gardiner Manor Mall in Bay Shore, NY. In order to satisfy the market demand for big-box stores, we are transforming this obsolete enclosed shopping mail into a power center. This entails buying out and relocating existing tenants, demolishing anchor stores (such as Sears), and reconstructing. The 550,000 square-foot power center, to be completed in the Spring of 1999, will have a mix of big-box and department store tenants such as Target, Sterns, King Kullen Supermarket, Barnes & Noble, Staples and Modell's.

Another example was our re-use of Roosevelt Raceway, a former harness racing site in Hempstead, Long Island. Hempstead was considered one of the most active retail districts in America, but seemingly had no large developable sites remaining. Although the failed Roosevelt Raceway was sitting on 172 acres of land, it was viewed by many to be a financially trying and logistically challenging project. However, we saw value in the large parcel of land, and today a successful 600,000 square-foot retail center, housing the Home Depot EXPO Design Center, Target and Babies 'R' Us has arisen where horse stables once stood.

Build it and they will come. As consumers' search for price, quality and selection continues into the new millennium, the demand for big-box retail and power centers will strengthen in the tri-state region. Therefore, developers will find success by using a proven mix of ingenuity and creativity.

(With more than 5 million square feet of space in its portfolio, Starwood Ceruzzi LLC is one of the leading developers of big box retail power centers in the U.S. New and completed development projects include Gardiner Manor Mail, a 550, 000 square-foot shopping mail in Bay Shore, NY, and Century Plaza, a 400,000 square-foot power center in Pittsburgh, PA.)