Yesterday's Neighborhood Retail Summit

Yesterday, I attended the Neighborhood Retail Summit, sponsored by the DC Economic Partnership. It featured presentations by a number of people, and a number of brief presentations about their businesses by retailers in a number of commercial districts. There were 100-130 people in attendance.

Highlights:

1. Erik Moses, the director of the Dept. of Small and Local Business Development, made an excellent presentation.
2. D. Wayne Williams, of the Business Finance Group, gave a presentation on the SBA 504 loan program which helps businesses with at least a two year track record buy buildings and expand. This could be a way to work with retailers to get some of the empty properties on the corridor. I am trying to get him to speak at the April merchants breakfast.
3. Kerry Newman owns Tropicana, the carryout on 12th Street, and I asked a public question about how to get them to open a restaurant. He's interested. (See below.)
4. The retailers' comments are interesting, especially those by the owner of Muleh.

Note that these are my notes. I wrote down what I thought was important and interesting, not absolutely everything that people said. (And for the most part, my opinions of what people said are not present.) It was a good session.
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Derrick Woody, Great Streets program -- Pushing Tax Increment Financing in four districts: 7th Street, at the Shaw Metro Station, and Georgia Avenue at Petworth Metro; on H Street NE; and Martin Luther King Avenue and South Capitol Street. Generally, there will be $1 - $3 million available over the next 4 years in each district. Monies tend to be available for building rehab, structured parking, site assembly, mixed use development, and affordable housing.

Erik Moses, director of the Department of Small and Local Business Development. Gave a great presentation.

$10 billion development in the pipeline. Neighborhood appeal, property condition, business operations are key to success. The city's priority is to ensure that neighborhoods see development and improvement of their commercial districts just like Downtown has.

There are 9 Main Street programs, 5 Great Streets programs, and a special program in Columbia Heights. All are dedicated to neighborhood commercial district improvement.

The Restore DC program, including DC Main Streets and the Enhanced Business Information Center, has moved into the DSLBD.

Small business support includes facade improvement programs, developing clean and safe commercial districts, providing online information (http://www.restoredc.dc.gov/), and the Commercial District Technical Assistance Program (CD-TAP) (Brookland is not eligible for this program).

Tools available
- business and consumer surveys
- retail promotion
- facade improvement assistance
- clean and safe strategy development

Business retention services
- retail operations
- restaurant operations
- visual merchandising
- window display design
- marketing

Design guidelines are available for guidance
- signs
- storefront lighting
- store security
- awnings
- grafitti removal
- historic preservation review

Business Relocation support
- assistance with the identification of suitable space
- guidance in navigating business regulatory requirements
-- regulations and licenses
-- public space permitting
-- alcoholic beverage sales

Commercial Building Improvements
- technical and grant assistance
- facade improvements
- signage and display window replacement
- security grate removal or relocation to interior

Interior retail space improvements
- window displays
- visual merchandising
- space management

Improving the City's Competitive Advantage

DC Main Streets
- business needs assessment
- technical assessment to strengthen business operations and attract customers

Marketing businesses to customers
- DC Main Streets
- guidance for effective marketing
- organized retail promotions
- inclusion in print advertisments

Developing a complementary business mix for the district
- strategic recruitment of complementary businesses
- planned business mix to achieve goals
- convenience, specialty, destination retail

Benefit from coordinated commercial revitalization efforts
- prevent isolated investments
- building an understanding among all businesses to achieve widespread coordination

Enhanced Business Information Center, joint venture with SBA

- business planning software
- meeting space
- 10 computers
- link with other resources
- monthly workshops
- resource information

Samira Cooke, Asst. Director for Training and Education, will be taking over.

D. Wayne Williams, Senior Lending Officer, Business Finance Group. He spoke about the SBA 504 loan program, which provides 20 year commercial mortgages at extremely low rates, currently 6.25%. Traditional commercial mortgages are 10 year terms. The equity required from the retailer is low, about 10% compared to 22% in conventional commercial mortgages. As long as a business has two years of track record, and success they are eligible for this program.

RETAILERS

Terri Merz, Chapters Book Store (Downtown) -- 21 years old. Literary booksstore. Passion + businss. Build audience through readings and other events. Not focused on best sellers. Get tourists. Cross-promote with E Street Cinema. Have weekend hours. Get business over the weekend.

Thinks there should be buy local campaigns and local business alliances comparable to those in Austin, Boulder. TIF programs and the like don't seem to trickle down to the small businesses that need the most help.

Margery Goldberg, Zenith Gallery -- in business a long time. Govt. officials not always helpful. Penn Quarter Neighborhood Association, Joann Neuhaus particularly helpful.

Ida Lewis Polite, Ida's Idea -- dream is to open a black-owned department store with men and women's clothing and housewares. Experience before opening the store was as an "all-price buyer" -- bought excess goods from manufacturers (just like Loehmann's, Filenes Basement). Her business, on 9th Street NW is successful due to repeat customers. Do get foot traffic, which cuts both ways, because it means more staff and inventory are required. Will add more space next year. #1 is the customer. To open a business you must have a passion. It's difficult and when times get rough you need the passion to get you through and move forward.

Amy Cavannaugh, Honfleur Gallery (Anacostia) -- Created by Arch, a CDC, to create a special space for arts and artists, a place where people in Anacostia can go, they have few places. The first two openings each had 350 attendees. Primary goal is to support neighborhood artists. The build out used 100% local contractors. ARCH also works on create artist housing, studios and gallery space.

Kerry Newman, Tropicana -- 8 establishments. Started on U Street in 1995. Open locations for the most part in areas identified by customers as places where they say there should be a store. I asked a question about how to help them open as restaurants. They have a store on 12th Street NE. They are interested. 882-4068.

He says a restaurant is very expensive to create. At least $250-$500,000 to open. The average McDonald's sells $1.7 million. His stores currently do about $700-$800,000/year.

Dale Cho, U Street Cleaners -- they needed a new machine which costs $40,000. Instead they bought an environmentally friendly machine which costs $100,000. But now produce 1 gallon of nontoxic waste/month, before 5 gallons of toxic waste/month. The word that they are an "organic cleaner" is getting out. Being good for the environment is good for business. Looking to expand. Learned by being at last years retail summit that there are other opportunities in the city.

4 rules: (1) Location; (2) right product and service -- what we do and what we offer; (3) fair price; (4) right relationship with customers -- honese, courteous, caring.

Member of the Mid Atlantic Cleaners Association and the International Fabricare Institute. This helps the business stay up with technology, business models, and technical skills.

Lori Parkerson, Redeem -- retail clothing boutique, funky. Biggest problems permitting, financing. Landlord -- a big corporation, wouldn't budge on any of the lease terms. Hard to get spaces. Tried three times, successful the fourth time. Hard to compete with chains, banks. But the building is new, so it was in good shape. The cost of buildout was low. But it was a shell. Allowance from the landlord. Many customers thank us for being there. DC is just as big and powerful as NYC and LA. We should have the same kinds of retail offered here.

Theresa Watts, Letty Gooch (Shaw) -- boutique. 5 years in the making. Did 18 months at Eastern Market to get a sense of the market. Target audience 25-45 year olds. Bring excitement in fashion to DC, which is conservative in terms of fashion. It took 6 months to get a certificate of occupancy. Found space via craigslist. Wanted a space on U Street between 15th and 16th, but it wasn't available. Ended up on 9th St. in Shaw. Did foot traffic count before deciding. There wasn't much, but decided to open anyway.

Jennifer Redd, Vegetate (Shaw) -- restaurant. Expect that it will take twice as long and twice as much money to open. Licenses and permits take a really long time. Hard to predict what will come up. Hard to get people to 9th street. Have to make the restaurant a destination.

Drew Porterfield, Longview Gallery -- have a sister gallery in VA. We had clientele and an artist list beforehand. Chose location due to the Convention Center. Claimed there would be walk in traffic from the CC, but it hasn't happened yet. DC and regional artists are represented. Most of customers are pre-existing.

Keith Ware, Eco-Green Living -- What is green? Everyone wants to go green but they don't know how to do it. Store has everything they need. Being green is looking out for others, not just for yourself. Intend to develop a green eco-business village, at a different location.

Irene Whalen, Zawadi -- African boutique. Many challenges and opportunities. She said that she appreciates this retail summit because it gives her the chance to hear about other businesses, learn from others. Issues -- rents, property taxes. Parking for customers is a challenge. As business proprietors get older, if we have the resources, issues come up about expansion. Some people are just tired. She has the opportunity to buy a building to house her business and is thankful.

Christopher Reiter, Muleh -- furniture. I hope people walk away with some inspiration after listening to people today. You can carry the torch for the next 10 years. DC has a huge concentration of people with wealth, is international, dearth of stores selling Asian furniture and antiques. Opened a store in 1999 in Bethesda, after having a store in Indonesia. Not being an area resident, at that time he didn't feel comfortable opening in DC. By 2002, he felt that the critical mass DC needed was achieved, and he opened a second store on U Street NW. (Eventually he closed the Bethesda store, because DC is a better market, more new dwellings, and people interested in this particular style.)

It's important to consider doing things different. Muleh started as a furniture store. But one of the managers had a "passion for fashion" and said she wanted to sell clothes. At first he said, no furniture store sells clothes. Then "no furniture store sells clothes, how interesting." When you do something new, there is resistance. In Bethesda, many people found it weird. Not in DC. There are different mindsets within the region. The region is not a monolith.

Advice for budding entrepreneurs:

1. Try to identify something really new, or significantly improve something already extant.
2. Build business out of trust. Travel to other cities and countries and see what they do.
Watch people. They might not want to or can't tell you why they do what they do, but you can observe them and learn new things.
3. Passion. Reinvent yourself and your business. That's the beauty of independent retail. A restaurant can become a jazz bar. Take our store, we added clothing. Change things up. Paint the floors, put up mirrors, etc. Let your clients know what you're doing, that you're changing.

DC store is twice of the size as the store in Bethesda. DC has more population, more volume. Taxes in DC are higher.