Monuments to Marketplace Myopia

December 09, 1993

They were brick. They were beautiful. They were big. And mostly, they bombed.

The "Festival" shopping centers that Trammell Crow Co. built in the Baltimore and Washington suburbs are among this region's more prolific monuments to the rapid boom-bust cycle of commercial real estate in the late 1980s and early 1990s. Of 10 of these shopping centers that the firm built, seven were taken over by the lenders or Trammell Crow partners within only a few years of opening. Among them were the Annapolis Fashion Festival, the Festival at Pasadena and Valu Food Fesitval in Severna Park. The failures were fairly dramatic because, as strip shopping centers go, these so-called "festival marketplaces" were well designed, with plenty of brick and lush landscaping. But the timing of the projects, in hindsight, turned out to be disastrous: They were built when land and construction costs were peaking, then they opened in a depressed climate for lending and leasing.

The centers were "not able to adhere to the overexpectations of the '80s, when the feeling was 'There's no end to this,' " said an executive whose Cincinnati firm manages two "festivals."

Some of these centers, fortunately, are on the upswing. The Annapolis Fashion Festival was half-empty a year ago despite a prime location near the Annapolis Mall and hip-name clothiers; it's now filling up with a new store mix, a new owner and a new name, Jennifer Square. In Severna Park, another "festival" center, Park Plaza, also has emerged with a solid mix of shops and restaurants after a few early stumbles.

The moral of the festival market blunder is a warning against the too much, too fast, too soon philosophy of the '80s. It's also a validation of success breeding success: The Festival at Bel Air in Harford County has boomed because of alluring anchors the likes of Hechinger's and Klein's, a well-known grocer in that area. Conversely, festivals in Pasadena, Annapolis and Waldorf struggled because their main draws were not dominant and are now bankrupt, such as Channel hardware and Lionel Kiddie City.

How could a major player such as Trammell Crow, its lenders and others have miscalculated so badly? Answer: greed. Just look for the brick and landscaped examples up and down our suburban corridors.

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