ISC Restaurant and Entertainment Leasing


The 2017 ICSC Legal Conference was held in San Antonio, Texas and (as standard) both the subjects dealt with and accompanying discussions did not disappoint. From year to year lots of the topics remain the same. But, there are always several hot problems that garner a considerable quantity of attention. The following is a summary of the latest issues that were discussed at more than one session at the conference.

Restaurant and Entertainment Leasing Issues

The tenant mix at shopping centres has been experiencing a dramatic shift and no change is more significant than the change to entertainment and restaurant applications. Restaurant applications have shifted from food court options to high dining table, brew pubs and other dining ideas like food halls, while entertainment choices range from movie theatres to bowling alleys to mini golf and entertainment parks. These “new” applications for shopping facilities bring with them a unique set of legal difficulties.

Most restaurant theories and many entertainment venues need the sale of alcohol to function. The consumption and sale of alcohol in facilities is a far bigger issue than just licensing with all the local municipality. Security is always an issue warranting careful consideration and discussion as it has to be determined who is responsible and just how much landlord supervision there’ll be. A growing trend is that the establishment of a guest code of conduct which tenants are being required to enforce. Signage can also be affected as a safety issue because such signage might be required to establish boundaries for alcohol intake along with other notices required by legislation.

Other styles in restaurant rentals include attaching menus to the lease and requiring landlord consent prior to menu varies. This enables the landlord to command a diverse restaurant renter mix. Many landlords will also be requiring more regular financial reporting in order to be proactive in addressing any restaurant financial performance problems.

Outparcel Development

Together with the progress of the general market, development of all sorts has improved and outparcel development specifically received increased attention at the conference. A substantial quantity of time was concentrated on local government demands for outparcel development. Growing trends Concerning civic needs on outparcel development include:

  • Higher utilization of and more high-end green area and related landscaping requirements. Gone are the days of simply planting a few trees or bushes from the parking lot. Landscaping plans are now highly complex and possibly quite expensive in the event of concealing a drive-thru or garbage collection area. Green area is also frequently required.

  • Impact prices continue to be an important revenue generator for both local municipalities.

  • A drive-thru will usually require a conditional use permit which can often result in particular aesthetic requirements.

  • Signage has become heavily regulated and enough signage may not be available to satisfy prospective operators.

Redevelopment Issues

Redevelopment projects were the topic of many sessions during the seminar.