Five Lessons For Cities Building Shopping Districts

Andrew Keatts | @Andy_Keatts | July 6, 2015

Image: flickr/smart_growth

Image: flickr/smart_growth

It’s an iconic picture of any urban place: sidewalks full of people moving between handsome rows of boutiques and cafes spread across a tree-lined shopping district.

Creating that picture is a goal of countless city officials across the country, but executing it is more than a matter of desire.

A recent panel at the annual the International Council of Shopping Centers retail industry convention offered a list imperatives for cities trying to invigorate their downtowns by attracting retail tenants.

1. Don’t Start With Retail

Nancy Whitworth, director of economic development in Greenville, S.C., said cities can’t expect to plop a major retail center or shopping district in the middle of a vacant or underused section of the city and expect it to work.

“When you begin the revitalization process, everyone wants retail,” she said. “They want to immediately jump to retail. You can make a place look good, but if the market can’t support the activity, you won’t be successful.”

Building Greenville into a celebrated pedestrian-friendly Main Street community took 30 years, she said. Importantly, it didn’t start with retail.

“We concentrated on offices, then once we had a healthy office market, we gradually moved into entertainment,” she said.

The city then began organizing events and supporting its performing arts center and baseball stadium.

Downtown Greenville became a place people wanted to be. And once that happened, the retail followed. Now it’s home to 125 restaurants unique to downtown Greenville, as well as high-end national retail tenants like Anthropologie and Orvis.

“But it’s all been about a period of time given to build up and make sure the demand was there,” she said.

2. Don’t Chase Trends or Use Subsidies as a Cure-All

Cities always want to chase what they see working in other cities or what they hear are the biggest trends, said Bill Fulton, director for the Kinder Institute for Urban Research and former head of city planning and economic development in San Diego.

A few years ago, that meant downtowns wanted a multiplex. Now that means fighting for an Apple Store or Nordstrom.

“The reality is, you have to understand your niche,” Fulton said. “You’ve got to understand, you’re not always going to have the coolest thing.”

Often, instead of simply acknowledging its demographics don’t support a particular type of retail, a community continues to throw money at the problem.

“The biggest psychological mistake that any city makes is, ‘if the market isn’t providing what we want, all we have to do is subsidize it deep enough, and we’ll get it to work,'” Fulton said. “Sometimes, if you subsidize it deep enough, you will get it, but the underlying market won’t be there, you won’t keep it, and it won’t serve as the basis of what you’re trying to grow. You have to be realistic about who you are in the marketplace.”

3. Focus on Placemaking

The best retail districts grow out of places where people want to be naturally. Create those, and retail will follow.

Whitworth said Greenville was lucky to have a river through downtown complete with a scenic waterfall. It built around that asset, but even that alone wasn’t enough.

“Our downtown was four lanes of moving traffic with parallel parking,” she said. “It was not an attractive place to be. So we narrowed down the street.”

Greenville instead gave that space over to pedestrians. The widened sidewalks gave way to large, outdoor café areas that bolstered the retail district.

4. Build a Critical Mass

Robert Stark, a mixed-use developer with Stark Enterprises, said his successful projects in his hometown Cleveland have come by taking advantage of the city’s existing resources.

“If you or your project can connect existing community assets, you’re a winner,” Stark said.

In Cleveland and elsewhere, the flight to the suburbs over the last 60 years left a generation of underused low-end office and warehouse space in cities. But those properties became an advantage that gave way to the current boom in downtown housing: they were ideal spots to convert to residential.

Once people started living downtown again-15,000 people moved back into Cleveland’s central business district in the last five years with more on the way – amenities had to follow them back downtown as well.

“Transformational, critical mass retail development, requires mixed-use,” Stark said. “Anyone will agree. That’s what the urban condition is about: it’s dense, mixed-use, and putting people on top of each other who are doing different things at the same time who come down to the street and create this energy, this tension … between people.”

5. Clear Roadblocks

After you’ve established that the market is truly there, attracting high-end tenants is all about making sure there’s a clear path to opening, said Carl Goertemoeller, Macy’s vice president of real estate.

He said local officials need to identify project detractors early on. You’ll have to appease them eventually, so it makes sense to appease them early.

And he returned to the old saw of procedural and regulatory hurdles. Highly sought-after tenants likely have several potential locations that meet their needs. They won’t always be willing to stick around through a maze of restrictions.

“If researchers say this is a top opportunity, they’ll fight,” he said. “If it’s a marginal site, governmental factors are a check in the negative column. If it’s too difficult, they’ll say they’re moving on.”

Cities should use their knowledge of their community to their advantage when trying to sell a tenant on a location, he said.

If you’re driving a tenant around, for example, don’t just take them from one spot to another. Pull out a full-sized map, circle the full area they’ll pull customers from, and explain how all the surrounding neighborhoods complement the downtown area, he suggested.

“The greatness of an urban core is built on the greatness of surrounding neighborhoods,” he said. “Make sure your retailer understands how those neighborhoods rate.”

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