Greater Greater Washington

Is there room for local businesses in White Flint?

New developments in urban areas often have a lot of chains. At Pike + Rose, the large mixed-use development on Rockville Pike, all of the first six restaurants to open will be chains as well. Will there be room for local businesses in the future White Flint?


Photo by dan reed! on Flickr.

Representatives from Federal Realty say their goal is to create an interesting array of shops and restaurants, no matter what they are. "It's less important to us whether something is a chain than [having] a mix of retail types, a mix of expense points, and a mix of dining types," says Evan Goldman, vice president of development. "We want...a diverse mix of options to get a diverse mix of people there."

Projects like Pike + Rose can be risky. Successful retail isn't a given even on a busy corridor like Rockville Pike, and both developers and business owners want to minimize risk. Unlike chains, which have a standard store format that's easy to recreate, small businesses also have to design and build a space from scratch, costing money and time.

And if an entrepreneur opens a second location that fails, their business may be sunk. If a chain's 20th store isn't successful, existing branches can help subsidize it. That's why developers often find it easier to work with chains in new projects.

"We know they can perform, they know they can perform," Goldman says. "And God forbid it doesn't perform, it's not going to take down their company or ours."

Where do chains go today?

When Pike + Rose is finished several years from now, it may look like other town center developments in the region, with a mix of stand-alone stores, national chains, and local chains, which I define as locally-owned businesses whose locations are primarily in the DC area. So Georgetown-based Sweetgreen counts, because all but 4 of its 20 locations are here, but Virginia-based Five Guys, which has over 1,000 locations across North America, doesn't.

Some projects have more locals than others. They're 22% of the businesses at the Market Common at Clarendon to 65% at the Mosaic District in Fairfax. At Bethesda Row and Rockville Town Square, both owned by Federal Realty, locals make up between 50 and 60% of all businesses.


The distribution of chains vs. local businesses at 7 DC-area town center projects. Image by the author.

Locally-owned restaurants and shops, whether one-offs or small chains, can be an asset for communities, supporting the local economy and providing unique attraction for customers. To make it easier for them to open, they need to have lower risks. There are two ways to do that: reduce the cost of doing business, or increase the potential number of customers.

How can we do that? Read the rest of my post on the Friends of White Flint..

A planner and architect by training, Dan Reed also writes his own blog, Just Up the Pike, and serves as the Land Use Chair for the Action Committee for Transit. He lives in downtown Silver Spring. 

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Yes. If the plan could follow the HafenCity Model. But then, there would have to be a commitment to fund ground floor uses that are fully focused on activation.

If you have time, go check out the exhibit at UMD.

by Richard Layman on Sep 30, 2013 12:21 pm • linkreport

Is there way to qualify the intrinsic value of a small (or local) business?

I know a lot of people really value it and it's apparent lack can be a stumbling block for development through neighborhood opposition. But if you told me a new development was bringing with it national brands I like that would have me more excited than local stores I may not care for.

But, as you point out. It's really not that clear of a relationship between new development and chains. It just depends on the particulars of each project. Like you say, find ways to lower overall risk (let commercial spaces be used far more than what our current zoning usually allows) and things will balance out.

by drumz on Sep 30, 2013 12:41 pm • linkreport

Chains are the one businesses that can afford the rent.

by ceefer66 on Sep 30, 2013 12:54 pm • linkreport

I'd argue there's less risk in having an established local brand/chain than opening the first store in the area for a national chain. For example, local chains like SweetGreen, Taylor Gourmet, Dolcezza, and Matchbox have a lot of name recognition in the area. When I heard those restaurants were going to be part of Mosaic, that was a reason for me to go there.

On the other hand, I've never heard of Lettuce Entertain You even though apparently they're big out West. I'm sure they're good but I'm not going out of my way to check them out.

"It's less important to us whether something is a chain than [having] a mix of retail types, a mix of expense points, and a mix of dining types,"

Yeah, but if you can offer options that are unique and distinctive (for the suburbs), your place becomes more of a destination and draws a larger crowd. No one goes out of their way to go to Starbucks. But, if you could claim to have the only location of Baked & Wired outside of DC, people would come from far and wide.

by Falls Church on Sep 30, 2013 1:11 pm • linkreport

@ Falls Church - Mon Ami Gabi, Community Canteen, Wildfire and Maggiano's are all Lettuce Entertain You restaurants that are/were in the area, most are fairly well known...

by Econ 101 on Sep 30, 2013 1:59 pm • linkreport

Hmm, of the list that Econ 101 posted there, I'd say that the downtown Bethesda location of Mon Ami Gabi seems to do a better job of fitting in and feeling "neighborhood-y" than the Friendship Heights location of Maggiano's does ... although maybe the difference in traffic feel between Woodmont Avenue as a mostly neighborhood street and Wisconsin Avenue as a regional artery has something to do with that.

(I admit I still have some residual "local joint" feelings about Five Guys due to my memories of them in Arlington in the early '90s before they went national, but they seem intent on killing that feeling by covering their walls with rave reviews from newspapers all over the country.)

Maybe there can be secret coordination between the local chains, such that as soon as a new suburban town center development is under construction, a new Z Burger, Matchbox Pizza, Moby Dick's, Hard Times Cafe, Sweetgreen, and Busboys & Poets can all parachute in at once. Along with a Fractured Prune donut place that'll be open for about five weeks and then close down forever without warning.

by iaom on Sep 30, 2013 2:29 pm • linkreport

@iaom

Fractured Prune did have a pretty aggressive expansion a few years ago. I enjoyed their locations in Silver Spring, Rockville and Cloverly, though even they have to admit their product (donuts with lots of crap on them) was at best a niche food that people wouldn't eat that frequently, at least compared to the more workaday donuts of, say, Dunkin'.

by dan reed! on Sep 30, 2013 2:39 pm • linkreport

Oh, the other example is CityCenterDC. However, they are not subsidizing rents. But the development team was required to have a detailed retail program with a focus on smaller, more exclusive retailers.

The contrast with HafenCity is that their plan requires that all first floor uses be active, either retail or other public uses, or public access.

Recognizing that the business now is not what retailers need, they subsidize the rent. Maximizing the current $ return per s.f. is not the foremost objective by the HafenCity plan.

Note that sometime this fall I plan to write a long piece on "activation."

Developers want retailers as a part of their space activation plans, but they want retailers to pay for the privilege of activating the space for them, being the first entrants, rather than providing rent and other subsidies (other than tenant buildout and other allowances).

by Richard Layman on Sep 30, 2013 8:05 pm • linkreport

I just saw the Piazza development in Philly for the first time this weekend and was impressed by both the more interesting architecture and set of retailers than what you see in pretty much any mixed-use development in the DC area. Thanks for this post, Dan, the lack of local businesses in many mixed use developments around here is something that has puzzled and troubled me, I'm glad to see the topic getting some attention!

by Kelly B on Oct 1, 2013 8:06 am • linkreport

Build a classy suburban development and then stuff it full of bland cookie-cutter chains like you're in Hagerstown or some such place. Makes a lot of sense.

by Chris S. on Oct 2, 2013 9:33 am • linkreport

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