Cooking demonstrations, cartoons and CNN are only part of the package that shoppers will experience at Simon Property Group malls with the REITs new Turner Broadcasting System Inc. alliance.

"A retail entertainment network will be represented throughout our portfolio," said Drew Sheinman, Simon's senior vice president of marketing and business development. "We embrace all forms of media and we use that to create this very unique model."

The media network will include exclusive in-mall television showcasing both original content and Turner networks-branded programming relevant to shoppers and the shopping experience; Internet access and a web site for shoppers to customize their shopping experience; live in-mall entertainment and informational events; and an interactive "family zone."

The "family zone" will incorporate Turner's Cartoon Network with live cartoon character appearances and through photo imaging, children, and their parents, can have their picture taken with the likes of Bugs Bunny, Yosemite Sam and more. "We are very excited about bringing the cartoon network content to the mall. We think it is going to be very appealing to kids and families," said Sheinman.

Besides cartoons, the Turner/Simon alliance will provide original shopping programming. For example, a cooking demonstration held at the Mall of America could be simulcast throughout Simon's multiple properties. "While this is taking place there would be cross promotions with some of our retailers and tenants," explained Sheinman. " It would also be simulcast on a web site that is accessible in the mall and at home that would give consumers the opportunity for a view and click experience where they can watch the cooking demonstration and purchase products that are relevant to that experience."

The total broadcast component will be rolled out in late 2000 through 2001.

"Our alliance with Simon unites two industry leaders with complementary assets, vision and cultures," said Steven J. Heyer, president and COO of TBS, Inc. "Combining the programming and sales expertise of Turner Broadcasting with Simon's retailing and development strength will create a unique entertainment and information environment targeted to the most demographically desirable consumers in the country."

Built-in-Gain Regulations for REITs On February 4, 2000, the IRS released temporary and proposed regulations that relate to the transfer of assets from a C-corporation to a REIT. Generally, the appreciation in a C-corporation's assets are taxed when it converts to a REIT, or when a C-corporation contributes appreciated assets to a REIT unless the REIT elects otherwise. A C-corporation that elects REIT status will be treated as if it sold all of its assets in a taxable transaction and liquidated. Only net gains, not net losses, are recognized. If it transfers appreciated assets to a REIT in an otherwise nontaxable transaction, these rules will also tax the net appreciation in those assets. A REIT elects to be subject to the built-in-gain rules that apply to S corporations if it can avoid the gain. The regulations state that the election must be made on the REIT's tax return for the first taxable year in which the C-corporation assets become assets of the REIT, or the first tax return filed after March 8, 2000, for taxable years before 2000.