Be Prepared: the real point on big box retail and urban locations

I got somewhat vexed by the American Society of Landscape Architects DIRT blog entry, "Walmart is coming to DC: is this good or bad?," on how great Walmart is for coming into DC because for the most part, it misrepresented issues around urban retail generally, design review specifically, and the integration of large scale retail appropriately into cities.

1. Increased interest in urban locations by big box retailers formerly focused on suburban locations is a good thing generally.

But we have to remember and recognize that businesses don't enter communities because they care about communities, but because they believe it is a sound economic decision to do so.

Rather than focus on "sentiment" ("our community is so great, Walmart wants to be here"), it's better to focus on fact and move forward accordingly.

Businesses like Walmart and Target and supermarkets are seeking urban locations because they have exhausted most of their opportunities in suburban markets, and see the opportunity for new revenues in urban locations. Walmart has suffered sales declines every quarter for the last two years, in large part because they focus on low income consumers, and they have been particularly hard hit by the recession. Therefore by repositioning towards urban markets, they can work to attract higher income consumers and continue to grow their firms.

Relatedly, in some communities, not all communities, the food desert issue may be relevant in terms of chain store entry, but not in many instances. Again, rather than focus on sentiment and/or cheerleading, focus on fact. In DC, most of the proposed Walmart locations do not serve the limited number of Census tracts in DC that are defined as food deserts.

-- USDA Food Desert Locator

-- Understanding your retail trade area: implications for analysis (Mississippi State University)

2. Entry of chains often comes at the expense of independent and local retail, which could in fact reduce the quality of the local economy.

That is the primary criticism of Walmart generally, and has been for many years. Walmart proponents argue about the data, but even if you dispute the data, there is no question that the nature of local economies changes in many ways, most negatively, as a result of the conversion of "local retail ecosystems" into ones dominated by national retail chains which purchase few goods and services within the local economy, thereby reducing the total amount of money circulating within the economy, and increasing financial outflows from the community to corporate headquarters (Bentonville, AR for Walmart, Minneapolis for Target).

3. Chain stores and urban design. Walmart and Target are willing to be urban as they they have changed their philosophy and now evince (1) a desire to be in center city locations; (2) a willingness to be in mixed use centers; and (3) a willingness to consider multi-floor store formats.

But they are agnostic about it. They only respond to the developer’s proposal. If the developer proposes something more traditionally suburban, it meets zoning requirements thereby limiting the ability of a community to oppose a project, and it’s in a location they want, they’ll take it, and put no pressure on the developer to create a truly urban project.

In DC, three of the four "Walmart" projects are basically suburban style projects, in "urban" clothing. Only the store proposed for New Jersey Avenue will be in a mixed use building. The other stores will be single use, either alone on their site, or as part of traditional shopping center developments.

DC like many communities, the zoning requirements define acceptable uses very generally, and provide little opportunity for community input.

In DC, the Large Tract Review process is triggered for large scale projects, but the process is more about review coordination than it is about substantively improving projects in the design phase. It offers few legal requirements or remedies and it is more of a back and forth consultative process.

4. The Lesson.

Center cities facing increased interest by big box retailers need to be prepared to deal with the entry of these firms, and ensure that they have robust design and business review ordinances in place to provide their communities with the tools they need to ensure more appropriate integration of these businesses into local economies.

The experience in DC is that many communities don't have the right ordinances in place.

By the time a company comes to your town, it's too late.

5. By having additional zoning and building regulation review procedures in place that are triggered for large scale uses, communities give themselves additional design and business model review capabilities.

-- Big-Box Ordinance and Conditional Use Permit (CUP) Tool-Kit, Midwest Environmental Advocates law center

-- Retail Initiative, New Rules project of the Institute for Local Self Reliance

6. Economic impact analysis and mitigation requirements (the above document calls them "Community impact analyses") should not be forgotten when creating these ordinances.

Given that there is evidence of significant changes to local economies, most negative, as a result of the entry of large scale chain retail, it is important that economic impact study provisions be required, and that a process for "mitigation" be required as part of the entry of the store into the community.

This provides a legal basis for what are called "community benefits agreements." Given point (1) above, that businesses enter communities for economic not sentimental reasons, having a strong legal basis for community impact determinations and mitigation requirements is the only way to systematically ensure that community benefit type agreements can be negotiated, if appropriate.

Note that I do believe that businesses are businesses and can't be expected, even if a community asks them, to improve any and every social ill. Only issues relevant to the community in terms of the impact of the entry of the business should be subject to such agreements.