COVER STORY, MAY 2011

LEGOLAND’S CONSTRUCTION
Merlin Entertainment expands LEGOLAND in Texas.
Savannah Duncan

LEGO models of downtown Dallas and the new Cowboys Stadium are Texas attractions at LEGOLAND’s new Dallas/Fort Worth location.

Like magic, Merlin Entertainments Group keeps rapidly expanding worldwide. Merlin, the U.K’s biggest visitor attraction operator, owns a variety of attractions such as LEGOLAND Discovery Centers, SEA Life, Madame Tussauds and The Dungeons, which are located in 16 countries on four different continents. So far, Merlin has 75 attractions worldwide, making the company second globally only to the Walt Disney Company. Additionally, Merlin operates six resorts, a shopping village and The London Eye.

In the U.S., Merlin is making a big push with LEGOLAND and its other “indoor concepts” as part of its international rapid expansion plan. Merlin intends to open six to seven new “indoor” attractions across the globe each year. The U.S. can expect two to three Merlin “indoor attractions” to open annually.

Recently, Merlin announced four more U.S. attractions to open in 2011 and 2012. In 2011, a 35,000-square-foot LEGOLAND Discovery Center and a 45,000-square-foot SEA Life center will open at Grapevine Mills in Dallas/Fort Worth, Texas and a 125-acre LEGOLAND Theme Park will open in Orlando, Florida. In 2012, a LEGOLAND Discovery Center will open at Phipps Plaza in Atlanta in March and a SEA Life Center will open in Kansas City, Missouri, at Crown Center, although a specific date has not been announced. After the opening of the LEGOLAND Discovery Center in Atlanta, Merlin will have a total of ten attractions in the U.S.

“The potential for America is so exciting for us,” says Steve Shears, site selection director for Merlin Entertainment Groups, based in Poole, England. “There’s a lot of big cities, big markets and there’s no direct competitor to us either which is fantastic.”

LEGOLAND Discovery Center is leading Merlin’s expansion in shopping centers. The concept was launched in Berlin in 2007. In 2005, the company acquired the LEGOLAND parks brand. There are currently four LEGOLAND Discovery Centers in the world, with plans to open one in New Jersey and the previously mentioned ones in Grapevine and Atlanta. The idea of creating the LEGOLAND Discovery Center evolved from a need for an indoor attraction that complemented the larger LEGOLAND theme parks.

“[The LEGOLAND parks] are fantastic, but they require a lot of capital and space, and unless they are somewhere nice and sunny, like some parts of the U.S., then we have to shut them in the winter,” says Shears. “So we came up with this new idea to take the essence of the outdoor LEGOLAND Park and put it into a box of about 35,000 square feet called ‘The Legoland Discovery Center.’ The cost is significantly less and it can be a 365-day a year attraction. It’s a really fun, new brand.”

Part of the appeal of building a LEGOLAND Discovery Center is the uniqueness of the LEGO product and ability to market it without difficulty. This is in large part because of the easily recognizable Lego brand. Shears says that Merlin targets TV, radio and print markets by arranging a series of pre-opening events to create publicity. These can be anything from the beginning of construction to recruiting the LEGO model builder (each LEGOLAND Discovery Center has its own model builder).

When it comes to selecting the next project location, there are several key factors Merlin takes into consideration.

“The most important characteristic is a strong resident market,” says Howard Samuels, President of Samuels & Company, Inc., Merlin’s national real estate advisor in the U.S. When scouting locations, Samuels looks for cities with preferably at least six to eight million resident base and an additional tourist draw of 2 to 4 million people. Also considered, because of the wide span of marketing, is the amount of people within a 2-hour drive time. Shears believes the LEGOLAND Discovery Center in Chicago pulls from even farther away than that. Demographics definitely play a part as well. For example, if Merlin is scouting a LEGOLAND Discovery Center site, which is a family-oriented attraction, the number of families in the area with children under the age of 12 is taken into consideration.

“We try to find a strong city center or central location in a marketplace and then make sure that we have great infrastructure as far as visibility, highways and access,” says Samuels. “If it’s a drive time of 2 to 3 hours we want to make sure it’s easy to get to those sites.” Merlin also takes into account other family offerings and entertainment attractions in the area, such as movie theaters and family-friendly restaurants. Merlin looks for co-tenancy with stores that will attract parents and children such as The Children’s Place and OshKosh B’gosh.

Additionally, Shears says that a considerable amount of time is spent on market research to ensure that Merlin is selecting a good location for its attraction. Samuels works with local experts within each major U.S. market to uncover potential locations.

“Merlin is good at trying to understand local cultures and adapt. We call it ‘the face of the place,’’’ says Shears. “As you go from market to market with a great team and a great concept, you do have to really understand the local culture and the local customs to sort out how you adapt to that type of environment to be readily acceptable.”

One way Merlin does this is to go to a city it is considering and ask potential visitors questions to research what kind of needs would have to be met with the attraction.

Equally important to the location is finding a landlord who understands Merlin’s product, what Merlin is, how it operates and how family-oriented the promotion is.

“We are long-term partners, it’s an entire lateral relationship,” Shears says. “We’ll be investing a significant amount of time, effort and capital into a particular mold and we’ll be there for the long haul, so it’s a real partnership.”

Samuels gives the example of Tisha Maley, the assistant vice president of leasing for Simon Property Group Inc., who he is working with on the LEGOLAND Discovery Center at Phipps Plaza in Atlanta, as the type of person who really understands Merlin and how bringing such a family-oriented attraction to Phipps will position the mall to receive more of a family draw. “Simon was a fantastic partner in Atlanta and Tisha Maley, specifically to work with,” he says. “They really embraced our product and we are really happy to be working with them.”

The company hopes that by spreading the word about Merlin across the globe it will entice interested landlords and brokers to reach out and let Merlin know about opportunities they may have for the company’s concepts.

“What Merlin brings is fabulous brands in a terrific, unique setting with significant financial capabilities and an expertise second-to-none in designing, developing and managing entertainment attractions on a long-term basis,” Samuels says.

Right now, the company has several worldwide projects they are working on, like a LEGOLAND Theme Park in Malaysia, to open in 2012. In 2011, Merlin hopes to open two attractions in the U.K./Continental Europe and one to two in Asia. The first of these, a Madame Tussauds in Bangkok, the company’s first venture into Thailand, opened in December. Merlin opened a Madame Tussauds in Vienna in March and a SEA Life Center in Italy. If all goes according to plan, Merlin will have more than 80 attractions open by the end of 2012.

©2011 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.