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Big Box Retail And Its Urban Planning Challenges

The four Walmarts proposed for DC have been accompanied by controversy, ire, and a flash mob performing an Aretha Franklin song. Tonight the National Building Museum is hosting a symposium called D.C. Builds: Big Box Retail where several speakers will present their perspective on the topic and then participate in a question and answer session with the audience. The three presenters are Harriet Tregoning (Director, DC Office of Planning), Kennedy Smith (principal, Community Land Use and Economics Group LLC), and Jay Klug (principal, JBG Rosenfeld Retail).

The moderator for the evening, Gideon Berger of Urban Land Institute, spoke to Curbed about what he sees are the many issues surrounding big chain stores coming to cities. Click through for the full story.

Do you think it would be this controversial if it wasn’t Walmart?
I’ve seen in other cities where if you propose a Target, nobody’s got a problem with it. That relates more to people’s perceived political agenda that they see Walmart representing, whether it is unionized jobs, salaries, or health benefits. Related to that is what are the impacts to small businesses? Those issues are also raised by other big box retailers but Walmart is guaranteed to draw a crowd and criticism.

Walmart aside, can you lay out all the issues that go along with big boxes in cities?
There are benefits and a suite of issues that come with it especially in these times. Big box retail brings the promise of jobs and anything that creates jobs is considered a good thing. Also they bring the promise of sales tax and property tax revenue to cities. Cities are really struggling with the fiscal challenges that have been imposed by the recession. They’ve been incredibly squeezed. There’s also this political climate that is not very favorable to government. So anything that can help on the tax revenue side are things that policy makers are very appreciative of.

What about the physical space a big box takes up?
A lot of the sites being considered are unproductive land. They’re empty lots or empty buildings. So the issue of putting that land back into productivity is something that cities always find challenging. For decades we’ve been trying to convince retailers throughout the country that our urban centers have a lot of underserved markets. From an economic development perspective cities have made the argument that the perception that there isn’t enough buying power in these underserved neighborhoods is just perception. There’s groups that have developed alternative market analysis methodologies to show these companies that there is a market there.

How have cities convinced larger retailers to come?
The standard way that market analysts approach this is they crunch the numbers. They look at households in a certain radius and incomes. They’re trying to figure out how many heads and how much discretionary income is available. Traditionally if you’re looking at a low income neighborhood, even if it was densely populated, it was often a tough sell to get [retailers] to want to come. Newer research shows that even though they have lower income they still have to buy food to eat. Ethnic grocers have been the ones to have been quickest to recognize the market that’s not being exploited by the bigger chains like the Safeways and the Giants.

At the other end of the spectrum is the story here with the Whole Foods on P Street. The neighborhood association actually funded a study and they pitched it to Whole Foods. So that’s an example of how even in wealthy neighborhoods perception can be a barrier of entry for these market chains. Because at that time, in the mid-90s, there were no significant retailers on 14th Street. It was full of nightclubs. Once the Whole Foods saw that they could make a lot of money they moved in. That was the logjam and once it broke much more development started to take place.

The Whole Foods almost has a restaurant feel, though, as opposed to a chain store.
That is an example of the format making the difference—where they put the garage above and below and have a very strong street relationship with a lot of transparency with those glass windows. Transparency is really important from an urban design perspective. Where I worked previously in Denver, there’s now a complete revamp of their zoming code, which they call a context-based code. On their main streets there’s a percentage of building transparency that is required. They felt very strongly that having those eyes on the streets and being able to entice people to come inside was very important. Context matters, either the existing context where you put these stores or the desired future context of that street. That is really the thing that needs to drive the design decisions.

For the four Walmarts that are proposed in DC we are seeing a lot of different site plans and building designs because the context for each of the four sites is so different. Some are in a more auto-oriented corridor and some, like the one on New Jersey Avenue, are proposed to be something that looks like an actual mixed-use development—with bays for small businesses and Walmart up on the second and third floor.

But what if the stores go out of business? Then there’s another empty building sitting there.
The other big issues are from a sustainably perspective. When you think about retail the trends change very quickly. It used to be ten to fifteen years before you would see larger retail reformatting itself into a different kind of real estate package. Now you see it happening in seven to ten years. So you don’t want to get stuck with these empty boxes—these ‘gray fields’—as retails trends change. Borders stores are a great example of how quickly retail trends can change. Borders and Blockbusters a decade ago were sort of the commercial anchor institutions of our neighborhood main streets. They replaced libraries and post offices as gathering places for people and now they’re gone. They occupy very prominent real estate in our towns and it’s not always clear what’s going to come in next. In many cases they represented the heart of the community. Traditionally city planners looked to civic places as being those ‘third places’–parks, libraries, post offices museums, city halls. That purpose became increasingly privatized and it ended up being the Borders type places.

So how should big boxes be designed in a densely populated, urban area?
Planners often try to over-retail in their conceptual site plans because they want to see activity but the market or density can’t support the retail that’s there. What is more important is saying that these should all be active uses, and they should have windows that people can see in and out of. Arlington has learned that lesson from its original designs of Rosslyn and Crystal City. The county has worked so hard to retro-fit to bring street life to what were once hotel dead zones. It is a wonderful national example of how to create traditional TOD [transit oriented development] into a place you can live today without a car. But even they have made mistakes along the way and have taken corrective action to make it less of a dead zone.

When you’re talking about sustainability and you say this box has a thirty year life span, you have to know how it is going to change. When you build something that looks like the New Jersey Avenue design that is an inherently more sustainable design. You’ve got a mix of big stores and little stores, so if the tenant leaves, you have an urban real estate product that would have high demand in the future. In suburban areas you’re left with a gray field. You should think about their evolution even if though you may be talking four market cycles into the future.

· Gideon Berger Bio, Urban Land Institute [Official Site]
· DC Builds: Big Box Retail [Official Site]
· Video: Respect DC Socks It To Walmart Aretha Franklin Style [CDC]

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