Greater Greater Washington

Retail


The neighborhood retail conundrum

Even in some of DC's most affluent neighborhoods, neighborhood retail corridors are causing gray hairs for local leaders. In Cleveland Park, there are many vacant stores along Connecticut Avenue, a repeated topic of conversation on the neighborhood email list. Over on P Street west of Dupont, several businesses are having trouble, leading to empty storefronts there as well and calls at the ANC for help. 17th Street is a constant subject of controversy, whether you think something is wrong or not.


Cleveland Park's Park and Shop. Photo by M.V.Jantzen on Flickr.

All of these cases share a common thread: a tension over one more profitable type of use pushing out the others. In Cleveland Park, a zoning overlay prohibits more than a certain number of restaurants; a Cosi wants to set up shop there, but can't. Instead, space goes empty. Critics of the overlay claim that it is just creating empty space and depriving the corridor of its chance to thrive; defenders, on the other hand, argue that landlords keep their spaces vacant intentionally to hold out for the higher rent they can get from a restaurant. They're counting on residents to become fed up and change the rule, or the DC government to relax enforcement, which has been common in the past. Who's right?

P and 17th both have liquor license moratoriums to keep the number of bars down. In the past, both streets were home to bicycle shops, apparel shops, and other neighborhood-serving retail. As in Cleveland Park, defenders of the rules feel that they will ensure rents stay low enough to make these kinds of businesses possible. On the other hand, we have these rules, and not those businesses.

Recently, several P Street restaurants have appealed to the Dupont ANC to allow a small increase in the number of liquor licenses. The ANC has gone along in hopes that the licenses will help the area restaurants to become profitable while remaining restaurants, and has insisted on voluntary agreements to limit the establishments to actual restaurant-type operation rather than become nightclubs or bars.

We can't go back to the good old days. More people shop at major big-box stores and online these days, making it harder for neighborhood retailers to compete. One way to help retail is to add residential density (the theory behind mixed-used development nodes recommended for Rockville Pike and Georgia Avenue. But neighborhoods like Cleveland Park and Dupont Circle fought higher density near their retail decades ago; opposition to density in Cleveland Park even launched HPRB Chairman Tersh Boasberg's preservation career.

Can we catalyze neighborhood retail, or are nightlife destinations like U Street, Adams Morgan, or Gallery Place, big-box meccas like Columbia Heights, or major mall-like chain-store centers like Georgetown or Friendship Heights the only viable options for urban neighborhoods? All of those draw people from all over the region instead of just from the neighborhood. Maybe Barracks Row is a good example.

Smart people have told me that it's infeasible to get neighborhood-serving retail by regulating commercial corridors that have lost it. I need to learn more. Any recommendations for good books or online resources on the topic?

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater. 

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I've been very active in Dupont. We have poor business development and business retention. Before renewing the liquor license moratoriums, a 17th Street Zoning Task Force met with the Cleveland Park activists (and others). Their overlay seems like an equally blunt instrument to manipulate the business mix. We need help. In the research I’ve done, the thing I now put some hope in is Formula Business Zoning. I’m hoping to get ThinkLocalFirst behind it and push it at the citywide Zoning Taskforce meetings. We’ve had some positive feedback from Planning.

http://communitybasedplanning.wordpress.com/2008/01/04/could-formula-retail-zoning-be-in-nycs-future/

http://www.newrules.org/retail/formula.html

by Rob Halligan on Jul 1, 2008 4:25 pm • linkreport

Here's an artcle about zoning to encourage/help grocery stores to stay in urban neighborhoods: http://www.PaloAltoOnline.com/news/story.php?story_id=8329

by Bianchi on Jul 1, 2008 4:31 pm • linkreport

The problem here is the classic problem of scarcity and a failure to manage it. If the government wants to create scarcity - which is indirectly what they are doing - then they need a better system of managing it. They should auction X# of licenses in the area (set asides can be set up to protect small businesses, etc...if so desired). Then use money from the auction to induce the kinds of stores they want. low-interest loans. Grants. Spruce of the street. Etc...

BTW, libertarians hate it when the government creates scarcity.

by VC on Jul 1, 2008 4:47 pm • linkreport

David, your comment "One way to help retail is to add residential density" is the crux of the matter. Neighborhood-serving retail needs neighbors! Either that or become a shopping destination. But to be a destination, you typically need parking. P St does not have parking. And even the Metro station is no substitute. It takes longer to slowly ride up the 188-ft-long escalators and walk two blocks than to park at Pentagon City. And you also typically need anchors; P St's spaces are too small for anchors. The biggest store might be Seond Story Books. Manhatten has great retail because millions of folks live there, and they don't have cars. And the buildings are well suited for retail (especially in SoHo's old warehouses!).

P St does in fact have a bit of residential - condos and apartments (and hotels) right on P, and many more nearby. It's clearly enough to support one of the few remaining mini non-chain grocery stores (Metro Market). But the commercial spaces suck. I would love to see the parking lot behind Riggs developed to have retail on Mass Ave & condos above, overlooking Dupont.

by michael on Jul 1, 2008 5:20 pm • linkreport

Michael, correct me if I'm wrong, but what you seem to be saying for most of your comment is that Dupont needs to become a shopping mall with condos and apartments around it.

That seems to defeat the whole purpose.

by Adam on Jul 1, 2008 6:12 pm • linkreport

>infeasible to get neighborhood-serving retail by regulating commercial corridors that have lost it

That's so especially true if you're looking to attract unique local stores. One of the big reasons that chains dominate in the suburbs is that suburbs over regulate commercial zoning and independent stores can't afford the start-up costs. Signs are a good example. Lots of communities require high-quality signage materials, which adds several thousand dollars to start-up costs right off the bat. Another sign example is that chains don't need as much signage because everybody automatically recognizes their logo, so if you have particularly restrictive size regulations, it can hurt the little guy a lot more.

I don't know enough about DC's zoning regs to know if that sort of thing is a problem or not, but I do know that it sure is a problem in a lot of places.

by BeyondDC on Jul 1, 2008 6:48 pm • linkreport

Don't necessarily think of Barracks Row as the good example. We have had a small number of retail closings recently and are being to grapple with the same set of issues.

by Ken Jarboe on Jul 1, 2008 6:57 pm • linkreport

Probably one of the best ways is to increase the amount commercial space available, thus driving down the price of commercial space and making it available to smaller businesses. Another way is to set maximum size limits for certain categories of stores to disincentivize big box or at least chain retail.

by mfs on Jul 1, 2008 7:32 pm • linkreport

I don't know whether DC has similar rules, but in Montgomery County, it is flat-out illegal (almost everywhere) to build a mixed-use project on a lot of less than 18,000 square feet. If a small merchant who owns the land under their store in downtown Bethesda or Silver Spring wants to maximize the value of their property, they are forced to sell out to a large developer. The large developer is typically oriented toward renting to national chains rather than local businesspeople.

The rationale for this rule is that mixed-use developments are required to have "public use spaces," and it is impossible for such spaces on a small parcel to be big enough to be usable. This public use space rule is what creates the dead "plaza" spaces in front of buildings that mess up so many of our streetscapes, and make the retail spaces behind them less inviting and less successful. (Compare the out-of-the-way-looking retail spaces in Bethesda's handsome new Lionsgate building at Old Georgetown & Woodmont, hidden behind a plaza that in my opinion is about as attractively designed as it could possibly be, with the very successful retail in the very ugly building that used to be there.)

Before we try to impose new regulations aimed at promoting locally owned retail, we should fix regulations that actively impede it. Storeowners in Central Business Districts ought to be able to rebuild their stores with a few floors of apartments or offices above, and not be under overwhelming economic compulsion to sell their properties.

by Ben Ross on Jul 1, 2008 9:24 pm • linkreport

When you just have bars & restaurants, you wind up with Adams-Morgan and places like 18th Street which are dead during the day. For all the talk, 17th St. seems to have a lot of vitality. P Street has lost its gay bars and gay-oriented stores, which were big reasons for its existence for many years and now it really has no identity, esp. as the gay population has moved East. The vaccuum will make it difficult to repopulate. There's plenty of density in the area; no need for parking or high rises. But people need to figure out what the demand is. BTW, the Connecticut Ave strip, which has no parking and which has lost some well-loved stores like Mystery Books, seems to do just fine., so i suspect P Street's problems are locally based rather than a"problem" with Dupont.

Large developers tend to want national chains or restaurants. What normally repopulates a strip is low rents and demand for new uses, esp. if a population turns over. Look at 14th St., which benefited from continuing low rents, relative to elsewhere, and new neighbors. A cooling off of the commercial real estate market wouldn't hurt some of these overpriced areas, even if it meant vacancies in the short run.

A marquee brand like Trader Joe's in Cleveland Park might help. It would hurt Magruder's, which doesn't have much of a store, but it might attract other destination retail, chain and otherwise. I don't understand why Cleveland Park would need more density--the single family homes are on postage stamp sized lots and the various apartment complexes generate plenty of foot traffic.

by Rich on Jul 1, 2008 11:44 pm • linkreport

Boston's Back Bay has been successful in transforming itself into a place where people of all walks of life want to socialize and shop. And it's done it with national retail shops (and their deep pockets.) We should look to emulate whatever Boston did right with that neighborhood and see how we can apply it to Dupont. People too readily think mall shops or Wal-marts when they think national retail ... but national retail is far more extensive (and varied) that that as the Back Bay experience has shown.

by Lance on Jul 2, 2008 12:34 am • linkreport

You asked for books... for starters "The Death and Life of Great American Cities" Jane Jacobs, and "Suburban Nation" Duany-Zyberk, and "Zoned Out" author unknown. If you just want an overview of how we got to this point in our US urban development - "Crabgrass Frontier" Kenneth Jackson, and "Main Street to Miracle Mile" Chester Liebs...

by Mark on Jul 2, 2008 10:27 am • linkreport

"Zoned Out" was written by Jonathan Levine, a planning professor at the University of Michigan.

by Alex B. on Jul 2, 2008 10:29 am • linkreport

Mark: Those are great books, but they don't cover the dynamics of neighborhood-serving retail, which is specifically what I'm interested in. I'm very familiar with the history of zoning and (sub)urban planning which has created the built environment we have today.

by David Alpert on Jul 2, 2008 10:41 am • linkreport

David:

I guess that I disagree with your premise. I don't think that the "neighborhood-serving retail" is the problem at all. The problem is a lack of diversity of use. The issue with all the areas you named is that there is a lack of workers in those areas. Columbia Heights should have had a major office component with it. Cleveland Park needs the same thing. These are metro-accessible places that have people living there, and that's it. If you want shops to be busy beyond 5:00PM to closing, put workers there.

The fact of the matter is that a lot of people still view "downtown" as the place where people work. People can't imagine an office building anywhere else, but yet it's necessary for vibrant, diverse use areas.

by Mark on Jul 2, 2008 11:08 am • linkreport

The American Independent Business Alliance is a membership org with articles, links and resources:

http://amiba.net/

The Institute for Local Self Reliance's Retail page is a portal to many local business resources:

http://www.newrules.org/retail/index.php

There are lots of case studies and best practices, but I think an overriding theme is that there are no one-size-fits-all solutions for local retail.

by Laurence Aurbach on Jul 2, 2008 11:27 am • linkreport

Ken,

Barracks Row is moving in the right direction. The only reason there are some recent retail closings in because the success of the street has driven up rents. Businesses with low revenues are moving out - those with higher revenues are moving in. Losing a dollar store or a check cashing depot for a new Matchbox is something many neighbors welcome.

The larger issue here is indeed density and the nature of comparison goods shopping. With a medium level of density convenience goods (pharmacy, dry cleaner, a couple eating establishments) can be supported. However, comparison goods (clothing, electronics, etc.) require the ability to compare products within a small vicinity. That's why high-streets in Europe work or for that matter, shopping malls- you can stop in several stores and then decide what you want. It's very hard for a one off store to survive and one off stores are all you can support demograhphically with out higher densities. For better or worse, given current densities and shopping patterns, the best we can hope for in DC's non downtown retail strips that aren't regional draws (i.e. Georgetown & Friendship Heights) are restaruants and convenience goods. The few truely dense neighborhoods in the District are another matter - their broad range of retail offerings is a testament to the upside of density.

by G-Man on Jul 2, 2008 1:12 pm • linkreport

Adam - I think it's reasonable to compare Dupont to a shopping mall. The lessons we can learn are convenience, synergy, branding... more? Dupont already has a few mall-like tennants, like Lucky Jeans, G-Star Raw, Benetton, plus Subway, Potbelly, McDonalds. I'd prefer to have the options and convenience of a mall without losing the local flavor, and of course the biggest convenience, without having to get in a car! Residential density can help a neighborhood retail area make up for the lack of parking.

by Michael on Jul 2, 2008 1:45 pm • linkreport

You need to understand retail dynamics, then you can understand the issues. Of course, I've spent 8 years learning about it, and writing about it in my blog. "Look up (Why Aren't We) Learning From Jane Jacobs" for one, and "why the future of urban retail isn't chains" and as importantly, "store siting decisions."

These entries and more are linked through this master blog entry: http://urbanplacesandspaces.blogspot.com/2007/06/retail-action-strategy.html

You can start by reading the ULI report "10 steps to better neighborhood retail," Milder's "Business Recruitment Handbook", maybe Seidman's report on urban main streets. Definitely the Main Street Center's _Creating an Image for Main Street_. The first three are linked on my blog.

I suppose the definitive book is yet to be written, maybe by me, but Ed Crow's book on Manayunk is very good and of course Belmont's _Cities in Full_ is far more relevant than _Suburban Nation_.

1. The retail industry has consolidated and concentrated, as you acknowledge.

2. It is suburban in orientation.

3. The size and the scale of the stores require huge trade areas.

4. To support 50,000 s.f. of commercial space you need about 30,000 regular customers.

5. Add that up and you see the problem. DC actually has too much of certain kinds of spaces and not enough of others. Plus DC through zoning doesn't direct new retail to extant commercial districts, further deconcentrating local retail. Plus the national-international property market downtown overshapes the commercial property market throughout the city and rents are too high. But so are building prices--$18 million for the property where Nathan's is is outlandish, even if the building is on one of the most prominent corners in DC. Only the most successful of international retailers could make that space work at those prices.

6. Although Belmont says to support a neighborhood commercial district you need 10,000 households within 1/2 mile, and 15,000 households within 1/2 mile to also support entertainment uses.

7. Belmont's book, in my opinion, is the most important book in urban planning after _Death and Life_. It adds data to _Death and Life_ and extends the argument to transportation.

So getting back to independent retail.

1. As you point out, convenience retail is difficult to offer.

2. Specialty goods are difficult to offer in neighborhood commercial districts too.

3. And so are shopping goods (cars, appliances, furniture).

In part location decisions are based on the avg. $ transaction value and frequency of purchase. E.g., furniture stores locate in areas where there is lots of housing turnover, new housing starts, because new residents buy lots of stuff when they move into a house.

It's why the Post Extra sections were published 2/week in Southern Maryland, Loudoun and Prince William, and only once/week in the other parts. (I bet this will change with the housing turndown.)

It's complicated by the loss of independent retail supporting infrastructure post-riots. In some places like Richmond or the State of Illinois, there are very strong independent merchants associations (in fact the IRMA of IL has a report you should read as well). Not in the DC region. Sadly, many of the strong independents in the region got their start in DC, and decamped either during postwar suburban migration (1950s and 1960s) or definitely after the riots.

I have presentations on this too, which I have given in Clarendon (which has the same issues as Dupont Circle) and Takoma Park (different issues and a different presentation).

It takes awhile to understand. You have to have the passion, like I did originally as an activist. But then you have to understand business development, capital formation, running costs, trade area dynamics, the retail industry and financing regimes, and much more to really understand how it works, and more importantly, to figure out how to work within those extant parameters.

by Richard Layman on Jul 2, 2008 7:01 pm • linkreport

Oops, with regard to the last section, it's why you have "regional" shopping districts within a city. Take Manhattan, Union Square acts as the regional shopping district for lower Manhattan (and more) while most neighborhood shopping districts have grocers, newsstands, restaurants, drug stores, hardware, etc., very typical convenience retail. The larger scale specialty and shopping goods stores are available and relatively close by but not in the neighborhood.

And even NYC has far far greater density than does DC, really showing the difficulty of making specialty and shopping good retail successful at the neighborhood level.

by Richard Layman on Jul 2, 2008 7:05 pm • linkreport

Its amazing to me that San Francisco, Los Angeles, New York and Chicago can have great in town neighborhoods with vital local merchant communities. Is it, as my partner contends, that DC just has a suburban mentality about shopping -- all online or big box stores because that's what their suburban counterparts are doing or they did when they lived there. Or is it because we don't actually have enough policies in place to encourage more neighborhood retails, more zoning overlays, more bans on chain stores and most of all laws to tax landlords for keeping spaces unoccupied.

Oddly, my own hometown in suburban Chicago, like many older suburbs, had a lovely walkable downtown with a great diversity of local retail. But it worked very hard to maintain that -- great support from merchant associations and the city government. As well as a planning department that worked (along with residents and merchants) to keep out chain stores.

It can be done, but it does require both effort and will. Seems as DC because more blandly upper middle class, it looks to the suburbs as a model for future growth. Density alone is not the salvation to prevent chains. That new density is just attracting more suburbanites who aren't comfortable without their Whole Foods and their Cosi's and their Starbucks. It's time to stand up against this kind of thinking.

by Christopher on Jul 4, 2008 2:49 pm • linkreport

I don't agree with all his conclusions, but Chris Leinberger's newest book gives a good overview of various categories of retail in an urban planning context.

by Stacy on Jul 7, 2008 4:24 pm • linkreport

"Seems as DC because more blandly upper middle class, it looks to the suburbs as a model for future growth. Density alone is not the salvation to prevent chains. That new density is just attracting more suburbanites who aren't comfortable without their Whole Foods and their Cosi's and their Starbucks. It's time to stand up against this kind of thinking."

Do we not WANT to attract that very same middle class back to the cities, to a more pedestrian environment? Or do you want local businesses and no consumers, as this very class of people are (again) repelled from the urban centers? I'm a recent transplant from the Sunbelt suburbs...and I love the walking, urban environment. You got me to take the first step...but sometimes you just need a Target.

It's also quite funny that San Francisco, Los Angeles, New York and Chicago are the 'models' for local retail. DC surely has just as much per capita, if not MORE than they aforementioned cities. LA is one big mall collective, and NYC is manic for Starbucks, Disney Stores and more.

I agree that America would be much more Beautiful for we, the people, if we had less chains and more authentic businesses, but you kind of have to pick your fights. I'd rather get we, the people to agree that city living is better than a sub-urban setting first, and THEN drop the "Mom's Cafe is better than Cosi" bomb on them.

I also think it's highly unrealistic to think that the nationalization of retail is going away (as it has been an ongoing trend since Sears and Woolworth's.) I know I'm revealing my District location (Georgetown,) but there's both a Banana Republic and a hometown retail store waiting for me when I go home.

Pick your battles.

by Aaron on Jul 10, 2008 2:56 pm • linkreport

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