Does Small, Local Retail Matter?
Can communities support independent, local retailers while promoting economic development and downtown revitalization?
This was the key question at a panel on “Death by Chains?” in Providence, RI last week. The event was sponsored by the Congress for the New Urbanism New England Chapter, the R Street Institute, and The American Conservative.
One panelist suggested that ensuring a mix of businesses should take a backseat to general placemaking considerations. “My relationship to retail is secondary,” said Cliff Wood, the executive director of the Downtown Providence Parks Conservancy. “Now that we’re experiencing some success the chains are starting to knock on the door. Retail is in service to a larger mission.” According to its website, the DPPC promotes revitalizing downtown Providence with pedestrian-friendly public spaces.
Kip Bergstrom, who has held a variety of positions in economic development in Connecticut, said that the United States was overbuilt for retail, with roughly 10 times the square feet per person than in Europe. However, he said there is a mismatch, because much of the supply is in the form of suburban malls and shopping centers, but the demand is for more traditional venues.
“They’re looking for good urbanism,” Bergstrom said. “It’s not death by chain, it’s the death of the suburban shopping center.”
But retail is part of placemaking.
“Retail is the thing that makes a place interesting,” Bergstrom said. “Without retail you don’t have a place.”
He said that the big challenge in retail was affordability. Not only are there currently not enough good urban spaces, but if all the development suddenly switched to good urbanism, it would still be expensive to build initially. He suggested that new retail developments should use well-paying chain retail to keep rents low for independent, local retail.
Arts consultant Margaret Bodell said that local businesses can, in a way create their own demand.
“One of the things I see is that people want to be part of a community,” she said. “Supporting local businesses is what people want to do.”
Anne Haynes of MassDevelopment, an economic development agency, agreed with this idea. “Each store is a hub of community,” she said. “Most retail provides that.” Haynes works with Massachusetts’ “gateway cities,” places that were once fairly prosperous industrial hubs, but have experienced disinvestment and increases in poverty, unemployment, and crime.
Bodell’s community-building efforts focus on using the arts to enhance business districts with nice store fronts and pop-up stores. The biggest obstacle she faces, she said, is getting landlords to allow experimental approaches.
Jonathan Coppage of the R Street Institute said that Washington has created barriers to the good urbanism Bergstrom spoke about.
“There are significant obstacles for small developers trying to get off the ground because of the mixed-use nature,” he said. “When you have the organic mixture of uses—the federal government is not set up for that.”
Coppage said that there were no federal loans or loan guarantees for mixed-use urban buildings unless they were around six or more stories or the developer could get a customized loan from a local bank—which is not likely. He said that there needed to be more adaptive institutions.
Bergstrom said that R. John Anderson, an architect and urbanist who promotes small-scale, incremental development, had developed a template for a one-story retail building with two 900 square foot stores that’s designed to be affordable from the beginning.
“Why does small retail matter?” asked Coppage.
“I think that the most important thing about retail is the sense of creating your own destiny,” Haynes said. “When you see a chain store, you know that the decisions are not being made locally.”
Bergstrom said that he did a lot of traveling and observed that non-chain stores make neighborhoods more unique. “Upscale neighborhoods all look the same with the same high end chain stores,” he said. “It’s chic, but it’s generic chic.”
“People go to places when they want to be in those places,” said Wood. “There’s a ‘hereness’—people like where they are.”
But the problem is that as neighborhoods get more popular and local retailers are successful, the rents start going up until only the chains can afford them.
Bergstrom described the problem as one of creating control rods for the nuclear reaction of neighborhood space.
“Part of our agreements with cities to figure out how to be sustainable and support activity for the long term,” Haynes said. “It requires a person. We call it community engagement for economic development.”
One of the things the panelists agreed on was the importance of ownership. Bergstrom said that one of the important things about the retail building template was that it was designed to be rent-to-own.
Wood said that there was an artists’ squat in Providence called AS 220 that managed to gain control of their building through sweat equity.
“The clever thing they did was figure out how to be owners,” he said.
John DiGiovanni, a member of the Harvard Square Business Association in Cambridge, Mass., said he wasn’t concerned with chains at all.
“It’s all about place,” he said. “The successful spaces are about place and the businesses behind the door come and go.”
“If you can create you can participate in your community,” Bodell said.
Another issue mentioned was the problem of vacancies. In some cities, businesses will move around but keep an empty location leased. Bergstrom called that practice restraint of trade and said that Rhode Island had created a kind of land value tax to punish landlords who keep properties vacant.
Peter Friedrichs, director of the Central Falls, RI Office of Planning and Economic Development, said that it was called the non-utilization tax and was about three times the typical property tax.
“It’s an absolutely crucial tool,” he said.
“You can’t predict the market,” Haynes said. “The only thing you can depend on is a need for a diverse range of spaces.”
Matthew M. Robare is a freelance journalist based in Boston who writes about urbanism and history. This article was supported by a grant from the Richard H. Driehaus Foundation.