Rediscovering The Glory Of The Araneta Center
This feature story was originally titled as The Empire Strikes Back, and was published in the March 2005 issue of Tatler Philippines. Today, Araneta Center is now known as Araneta City and the Araneta Coliseum as the Smart Araneta Coliseum. Also, there is now two Gateway Malls in the district and plans for a third one. Moreover, international hotel brand Novotel opened its Manila property in October 2015, situated at the heart of the Araneta City.
Back in the days when most of Makati and Ortigas Center was just grassland, there was already a development in Cubao, Quezon City that was known to all as the Araneta Center. Built by and named after the late great Don Amado Araneta, it was a pioneer in many aspects for shopping and family entertainment. Since those halcyon days, its glory slowly faded. But don't count them out just yet. The lustre it lost years ago, it now seeks to regain with massive redevelopment. Proudly overseeing the project is Don Amado's son, Jorge Leon Araneta.
Araneta always wears a gold cross around his neck, a sentimental purchase from the Bulgari boutique in Paris in 1960. It had vanished mysteriously twice in the past, but miraculously came back to him. During parties, clad in custom-made shirts and dark slacks, he is often mistaken for a priest. Invariably, he replies in jest, "I gave you my blessings."
"Dreamer" is Araneta's term for his role in the family business. His mind, above ground and bright with ideals, has envisaged progressive lifestyle alternatives.
"My job is to dream up things and to ask my people, 'Why not?' I challenge them to initiate changes. the world is revolutionizing very fast. To keep up, you have to change," says the chairman and CEO of the Araneta Group. Since the 18th century, the family established its wealth in a sugar plantation in Negros and exportation before the Aranetas shifted to real estate, entertainment and food services. Araneta's career has been characterized by large-scale ventures, his style illustrated by thinking away from traditions and modernising the mundane humdrum while maintaining the highest moral beliefs and fervour to see things through. This explains the corporate motto that he personally coined: "Creating Value Through Change."
"That slogan shakes up everybody," he notes.
He is at the helm of efforts to bring back the old glory of Cubao, particularly the Araneta Center. The Gateway, a PHP2.5-billion five-star mall, is the centrepiece project.
This area in Quezon City is one of the prime locations in the metropolis today. During the war, Cubao was an American signal core on account of its elevation. Radio Corporation of America (RCA) built 18 transmission towers at the highest points. After the war, Jorge's father, the visionary Amado Araneta, bought the property from RCA.
"Coming here (then) was like going to Tagaytay today. Highway 54 (now EDSA) was just a lonely strip of asphalt," says the younger Araneta. His father made him work his way up the corporate ladder, starting at the family sugar mill. After finishing high school at De La Salle, he recalls, he wanted to join friends who were going to the United States. But his father insisted that he take up business administration at the University of the Philippines instead, the better to learn the ropes. "At first I was sore," Araneta says, "because all my friends were (leaving) and there I was..." As it turned out, father knew best.
Years later, Araneta has won numerous business awards, including one for being among the Top Five Best Employers in Asia/Philippines in 2003, given by the Hewitt Association and Wall Street Journal. He introduced many lifestyle concepts in the country, which went unheralded by media only because the family was intensely private.
While the Araneta Coliseum was being built in 1958, the scion would tag along with his father to observe transactions. The coliseum opened in 1960, envisioned as an anchor to attract the intended market. Eventually, various shopping stores were built around it.
"My father had the genius to see the future. We were competing with other developers, like the Ayala Group in Makati and the Ortigas family in Greenhills," says Araneta. Don Amado, or "Amading" to his friends, made him responsible for running the coliseum, where foreign acts and major concerts were staged. One of the perks of the job was meeting such "beautiful people" as Nat King Cole, Johnny Mathis, Neil Sedaka, Julio Iglesias, Paul Anka, and many others, who all dined at the family's White House and became Araneta's friends. The coliseum served as a catalyst for other businesses at the centre.
Amading originated the first generation of strip malls, composed of 147 stores along Aurora Boulevard. He transplanted the famous Aguinaldo's, the first upscale Filipino department store, from Echague, which used to be the country's shopping district. He acquired the franchise of Matsuzakaya Department Store and grocery, the very first to venture outside of Japan. But the Buy Filipino Movement restricted importation, thus eventually closing down the business. The area was converted into an ice-skating rink, yet another first in the country, and the Nation's Cinerama Theatre, which projected lifelike images in 70 mm film on a concave screen. The rink, which employed two "imported" German teachers, was frequented by members of Manila's high society, including Jaime Zobel de Ayala and the late Elvira Manahan. Embers, a club ran by Bobby Ledesma and Mitos Villareal, featured the country's top jazz musicians.
The New Frontier Theater, patterned after the Radio City Music Hall, was designed for live entertainment and movies. With a capacity of 3,000, it was the largest theatre in Asia at the time. MGM musical star Kathryn Grayson was the opening attraction. "The centre was definitely in the swing of things," Araneta says.
In 1970, Amading retired and passed on the reins to Jorge as head-honcho of the Araneta Group. The elder Araneta was travelling with his wife in Europe when Martial Law was declared in 1972. He lived in New York until his death in November 1985.
During the Martial Law years from 1972 to 1986, the volatile political and economic climate forced Araneta to stop construction, except for Ali Mall, the first enclosed multi-level shopping mall in the country. It was inaugurated in the late '70s by sports legend Muhammad Ali who had just won the much-hyped boxing match, "Thrilla in Manila," at the Araneta Coliseum.
As general manager, Araneta observed that the food businesses were earning more, and faster. "The food outlets made a lot of profit without shelling out too much money. When you build a mall, you put in a lot of capital, but these guys were getting better returns than the mall," he says.
Araneta acquired the franchise of Pizza Hut and most recently, Taco Bell. A frequent traveller, he enjoys Italian food. He set up a Trattoria Uno, initially importing Italian chefs. It was also the first restaurant to build a wood-fired oven to make authentic pizzas.
Like most businessmen, Araneta was optimistic during the Aquino administration. He embarked on the Manhattan Tower project, a mixed-use centre. The company started selling to foreign buyers. The concept of a retail podium with three-tower condominiums was definitely ahead of its time. Unfortunately, a right-wing rebellion that held Makati hostage put a damper on the economy in 1989. Although the ground had been excavated, construction plans were scrapped.
Through the years, Araneta Center experienced a gradual decay. Save for rebuilding Farmer's Plaza after it was gutted by fire in the late 1980s, the company did not venture into any development projects.
"You know the saying, 'Once burned, twice careful'," Araneta says ruefully. "We are disappointed. It took us a while to regain our bearing. It was only after the mass transit system was in place that we got encouraged. Our advantage is location. We are the only commercial centre at the junction of MRT-3 and LRT-2. We are a transmodal station. People come here (a million everyday) through all modes (of transport)," he adds.
Araneta adds that the property is still the highest point in Metro Manila: "What is ground zero in Malate—we are 43 meters above that. We are sort of immune from flooding. Another advantage is that we are sitting on a bedrock, a very solid foundation. We can even build a 100-story building."
The first Mass Railway Transit system along EDSA, with Araneta Center as one of the stops, motivated the family to embark on redevelopment in 1999.
Araneta spared no expense. He commissioned the Los Angeles, California-based RTKL International Ltd to update the master plan. One of the first proposals was to demolish the coliseum, which occupies four hectares but never generated revenue since 1960 due to the severe amusement taxes.
Although they had been subsidizing it, the family decided to retain the structure, a landmark of the metropolis. Araneta hired Denzel Skinner, dean of arena managers in the US, to help refurbish the coliseum. The company spent PHP250 million to make it world-class; another PHP200 million for the upgrade of Ali Mall. Now it is plunking PHP2.5 billion for the Gateway Mall.
Titillated by new ideas and turned on to new discoveries, Araneta hired the best people and sought the best concepts for this project. Sudhakar Thakurdesai, senior vice president of the RTKL design firm was the main architect. Araneta also invited Ralph Peter Jentes, who launched the Grand Hyatt in Hong Kong, to lend a five-star touch. "As part of our efforts to offer something different and more complete, we want to apply hotel standards in service," he says. "We say that our mall is 'like no other mall in the world.' We have to justify that."
Indeed, it's the only Philippine mall that has Italian granite bathrooms, staffers in designer uniforms, valet parking and five-star concierge service. The Cineplex is composed of 10 state-of-the-art cinemas with stadium seating for unobstructed view from any angle. Araneta is likewise launching Wolfgang Puck, a café offering quality food at affordable prices. He has been visiting Spago's, Puck's restaurant in Los Angeles, since its inception, and befriended the celebrity chef. The café is a mid-range version of the famous restaurant.
Since the center doesn't have a hotel yet, Araneta brought in Mandarin Oriental to put up a coffee shop and offer dry cleaning. "People do not have to go to Makati to have their sacher torte, which the Mandarin is famous for," Araneta explains. He also set up a Makati Medical Center services in Ali Mall.
Some people think his ideas are lofty, but Araneta takes the opposition in stride. "There will always be different opinions. I felt we had to offer something to people living north of the Pasig River, which is part of our primary market area. For them to come here, we have to offer the best," he says.
Needless to say, Araneta has been bullish lately despite a weak economy. Service is one of his biggest concerns. "Service has to be very good. The customer is king. We are manic (about this). We routinely conduct market researches and focus group discussions. We ask customers what they want us to do. We take that as a guideline. Most of the time it works," says Araneta.
He is modest about discussing his values in leadership. "It's the same thing that history has taught us," he says simply. "Integrity, hard work, belief in God, respect. Treat people the same way you want to be treated."