Are urban big box stores good or bad?
Topher Mathews found out what Vornado plans for the now-closed Georgetown Park Mall. They hope to attract 2 restaurants for the side of the building overlooking the C&O Canal and have lined up a number of large chain stores for the rest: TJ Maxx, HomeGoods, Michaels and an expanded J. Crew. Is this news welcome or disappointing?
The chain retailers will each have entrances on the street rather than an interior mall-like layout, as was the case before. That makes sense because Georgetown already has a main street to walk along and see shops: M Street.
Malls were designed to replicate the main street experience; when there's already a main street, it's just a less-trafficked side street, and its 3 levels, winding paths and dark layout made it inconvenient and unappealing.
Mathews isn't so enthusiastic about which stores will fill the space. He says:
Essentially, when Vornado is done with it, the bulk of the mall will have been converted into a couple big box stores that have all the charm and destination-appeal of Rockville Pike.Design is the biggest problem with most big box stores
The biggest problem with Rockville Pike, though, is its urban form. Each shopping center has a giant parking lot between itself and the road, and there often aren't any connections at all between centers. That means it's very difficult to shop there any way other than driving to one center, parking, driving to another, and so on.
The fact of modern retail is that for most physical products, people want to go to a large store with a lot of selection. It'd be nice to have a small crafts store near my house, but the fact is that I don't go to such a store often enough to support having it, and the individual items don't cost that much (or if they do, it's cost-prohibitive for many people).
A small crafts store would not have very many different kinds of fabric, picture frames or Christmas ornaments. People don't want to travel from one small store to another in different neighborhoods to hunt for what they want; they'll either go to a superstore or shop online. I've tried the Paper Source in Georgetown several times for the types of items it has, and sometimes found great things there, but also sometimes made a trip without finding what I needed.
There's no Michaels in DC today. The nearest one is in Seven Corners, and the next closest in Rockville, on the Pike. Having one in Georgetown would let people fulfill their craft needs in a place where they could drive, take the Circulator or Metrobus, or bike or walk from many neighborhoods.
What's bad about many of the big box plans for Ward 5 is not that large stores are coming to Ward 5, but that they're building suburban format stores. That Home Depot could take up a tenth of the space if it had a garage and a multi-story building. The rest of the land could house people who can shop there and take the Metro to work. The Aldi doesn't contribute to the nearby walkable neighborhood, and the New York Avenue Walmart is the worst design of DC's 6 proposed stores.
Large discount stores may not be best for the tax base
On the other hand, some of these new stores may bring in less tax revenue per square foot than more upscale stores. At one point, DC was considering a Tax Increment Financing (TIF) deal to lure Bloomingdale's instead of TJ Maxx. It didn't seem to make sense at first: if Bloomingdale's would pay less rent, then how would a TIF pay for itself, but if it brings in more, why does Vornado need any kind of incentive?
Someone directly involved with TIFs, who wasn't authorized to speak on the record, explained that a store like Bloomingdale's actually would pay less rent, but generates more sales tax revenue. I wasn't able to see detailed numbers to know if that makes the TIF worthwhile, but it's certainly possible that one store could have a larger number of dollars in gross sales but lower profits.
Stores with cheaper goods not only make their profits by selling more, but also by having fewer staff and less elaborate merchandise displays. Those savings could help them afford higher rent but don't affect the sales taxes the city brings in (and cut down on potential jobs for residents).
That may or may not have made any kind of tax break worthwhile, but it does point out a paradox in retailing: what's best for a landlord may not be the same as what's best for the District budget. And as Mathews notes, what's best for a neighborhood may be different than either of those.
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