Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, January 19, 2015

Tinkering with retail zoning categorization to maintain a slice of neighborhood serving retail

In a thread on a GGW post, a commenter made a point about how as part of a new apartment building project at 2255 Wisconsin Avenue NW, the developer is kicking out the hardware store--the only one in the area--in favor of a Rite Aid pharmacy, even though there is already a CVS pharmacy across the street--albeit not in property owned by this specific developer.
2255 Wisconsin Avenue NW, DC
I don't know what the process was for approving the development, if it was a standard process or a Planned Unit Development process.

PUDs provide a density bonus in return for negotiated "community benefits."  I have written ("Community benefits agreements: revised (again)") that the community benefits negotiation process is very loose, and needs tightening up

Generally, PUDs don't do a very good job providing directed requirements concerning retail, and the GGW comment highlights this problem, which admittedly, I might have missed myself, had I been involved in the process.

This piece about Florida Market (now called once again, Union Market) provides an example of how to go about providing more directed guidance on retail and commercial district amenities as part of a PUD negotiation process, "Retail planning and the Florida Market."

The apartment building at 2255 Wisconsin Avenue NW is being constructed behind the street fronting buildings, rather than being constructed above, taking advantage of the lot size and topography, so it probably didn't involve a PUD process.

The zoning order (if there was one) should have specified that neighborhood serving retail ("convenience retail"), specifically the hardware store, should be maintained as part of the new development, rather than being displaced by new retail that merely repeats what already exists.
Rating stores in terms of product mix, goods, and price points
Rating stores in terms of product mix, goods, and price points.

In any case, the process demonstrates an ongoing defect in the city's commercial zoning categories as they relate to encouraging the provision and maintenance of neighborhood-serving retail.

Restaurant patio, Bethesda Row "alley"
Lots of restaurants, limited retail, in Bethesda Row.

2.  Separately, I was taking some people from Europe on a tour of Union Market, and we were discussing various trends in retail, including lifestyle centers, which are anti-mall, and outdoors-focused, with the development laid out more like traditional commercial districts.

I mentioned how Bethesda Row in Montgomery County is an example of a lifestyle center, and the first thing one of them said was "but they don't have any stores that provide real services, like a dry cleaners."

That's the flip side of the issue identified in the GGW thread about new retail developments in the city.

They are set up to add retail space, but not to provide space for what might be called "convenience services" as opposed to the commonly used term "convenience retail."  Services would include dry cleaners and repair services (shoes and leather goods, appliances, etc.)

In large part this happens because owners of newly constructed space seek out tenants that can pay the highest rent.  That tends to be either big chains or restaurants generally, and definitely not service businesses like dry cleaners that have low profitability.

3.  From time to time, I mention that Laguna Beach, California has a "neighborhood serving" retail zoning category, which I noticed the one time I visited there, based on a notice placed on a particular building, but I never really looked into it.
2013-09-01 23.00.39
Laguna Beach.  Flickr photo by Dean.

It turns out that Laguna Beach has an array of commercial zoning categories, most focused on maintaining locally-serving retail and services in the face of the reality that Laguna Beach, a small community with about 22,000 residents but located on the Pacific Ocean with great beaches, is a major tourist destination, with an average of thee million visitors annually.

Generally, tourist-focused retail is much different from resident-serving retail--art galleries and souvenir shops vs. pharmacies, supermarkets, hardware stores, dry cleaners, etc.  The rents end up being much higher, which normally prices out convenience goods.

The city's Commercial Neighborhood Zone focuses on maintaining retail that serves residents.   According to the city code:
Principal activities are commercial retail functions, service oriented businesses, office/professional uses, and limited residential uses. The commercial-neighborhood zone differs from the local business-professional zone in that it features a stricter orientation to resident-serving businesses and greater limitations on residential uses.
4.  I do think that there is a need to refine DC's commercial zoning categories, which mostly build in a lot of "matter of right" which limits review, to better focus attention on the continued provision of neighborhood serving retail in those commercial districts which are primarily neighborhood serving.

This is especially important in the face of conversion of property ownership from small operators to large firms and the rebuilding of small spaces into larger and new buildings.

The Laguna Beach zoning code provides some good examples of how to go about doing so.

Changes in DC should include the PUD process and better specifying retail mix and the provision of retail space for "community services."  This could involve tax incentives or other considerations such as density bonuses.

Another way might be to add a special exception review process concerning "use" changes for specific spaces, e.g., such as from hardware to restaurant, or when certain categories, like chain pharmacies, are already represented.

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11 Comments:

At 9:59 AM, Anonymous Alex B. said...

Local serving retail sounds great, but how would you define it?

Since you're talking about a legal zoning code regulation, you need a much clearer definition of what it is.

While a hardware store is a good example of local-serving retail, so is a pharmacy/convenience store. In other words, I don't see how it would prevent this situation.

I think it's a lot to ask for a zoning code to specifically demand that a landowner keep an existing tenant on board. Making a zoning code that relies on the current status of other retail establishments in the area would be incredibly difficult to draft and enforce. I'm also pretty sure this case does not involve a PUD.

 
At 11:32 AM, Blogger Richard Layman said...

Likely this wasn't a PUD. But in PUDs, you could specify some space for such uses, not unlike how (not too successfully) Dev. Corporation of Columbia Heights allocated space for smaller retailers within DC/USA in Columbia Heights. But if you're talking dry cleaners, etc., the spaces can be much smaller, and there isn't a significant cost.

2. DC doesn't address use changes the way NYC does. Adding a pharmacy by getting rid of a hardware store would be tougher there.

You can argue we're too liberal and NYC (or SF) is too restrictive. I'd argue some place in the middle is better.

In this case, the issue would be to put a restriction on duplication within the same category if it comes at the expense of eliminating the presence of another category.

The next time I'm in Orange County, I'll try to talk with some people in Laguna Beach, to get a better sense of how things work there.

 
At 2:50 PM, Anonymous Alex B. said...

What kind of zoning code clause in New York makes it harder to change from one type of retail (a hardware store) to another (a pharmacy)?

That's not actually a change in use, it's merely a change in the tenant. And you're not going to find a zoning code that effectively controls that process - that's not what zoning does.

I would argue that the idea of trying to publicly control that process is a bad idea (for the same reason that DC's zoning code specifically mentions telegraph terminals but required a change to allow a yoga studio - since yoga was not explicitly mentioned in the text) regardless of the regulatory mechanism, but none of that changes the fact that this example in Glover Park is replacing one neighborhood-serving retail establishment with another.

 
At 4:22 PM, Blogger Richard Layman said...

they define use change more narrowly than perhaps you or I would.

I do agree that the code is probably overspecific.

But somehow you have to balance the concerns of individual property owners and the overall health of the commercial district. The two different sets of interests can conflict.

2. the point that is escaping you (it isn't but it doesn't seem to matter) is the difference between duplicating an existing neighborhood use, in this case a pharmacy, which doesn't add to the mix of retail stores and services, vs. adding a use in a category currently unrepresented.

By eliminating the representation of a particular retail category, the change of tenant is not congruent with promoting a healthy and variegated commercial district.

 
At 8:15 PM, Anonymous Alex B. said...

Richard,

Your point isn't escaping me. I totally get why people are upset about losing a hardware store and gaining another chain pharmacy. But that's not the question: the question is how you propose to achieve that goal.

Being upset isn't enough to draft clear, concise, and enforceable regulations over land use, the built environment, and business leasing.

I would love to see the relevant language from New York that is tailored so narrowly.

I get your goal here, that's not what I'm questioning. I'm not sold that you can regulate your way to achieving that goal with the zoning code. You can't very well craft a zoning law that states you can't lease your retail space to a retailer that's already in the neighborhood. Note that the C-N zone from Laguna beach allows, by right, both pharmacies and hardware stores.

Yes, this is a challenge for any urban business district (compared to, say, a mall - where they can curate the mix of retailers to maximize value), but if there's a policy solution here, I would imagine it would need to come via some other active management from the public sector, whether that is favorable tax treatment for the desired businesses, direct subsidies for those businesses to help pay otherwise unaffordable rents, or something like that. I'm very skeptical of the idea that this is something you can try to regulate via zoning without some severe unintended consequences.

 
At 8:52 PM, Blogger Richard Layman said...

first, recognize that I am not a lawyer.

What would have to change is the way that certificates of occupancy are granted.

Using a form of Cleveland's Bus. Revitalization District Overlay, which requires an extra level of review and consultation in those districts that have been designated as priority revitalization areas in the city, such a consultation process could be used to limit something like this from happening.

In this situation, likely it would cost this property owner some money. The public interest point is explained by the intent statement of the BRD zone. Here it would be the overall variety of stores provided, and health of the commercial district overall.

http://planning.city.cleveland.oh.us/designreview/brdordinance.html

Obviously, that ordinance doesn't cover uses, but could, very easily.

Again, I am not a lawyer, but I could see how crafting such a process within a comparable type of zoning category would yield the kind of result I am discussing here.

 
At 8:56 PM, Blogger Richard Layman said...

cleveland planning commission comp plan document, section on retail:

http://planning.city.cleveland.oh.us/cwp/retail_oview.php

and this, policies and strategies,

http://planning.city.cleveland.oh.us/cwp/retail_plicy.php

Cleveland generally doesn't have the problem of Glover Park so that kind of item clearly hasn't come up and needs to be addressed in their plan.

 
At 11:26 PM, Anonymous Anonymous said...

I understand what you are wanting, but most zoning ordinances I've interacted with (and administered) are trending counter to your proposal whereby there is additional flexibility and less process rather than more. Rather than micromanaging neighborhood economics through the zoning code, a more effective approach might be through business recruitment efforts via BIDs, other downtown districts, EDA's & offices, etc. If incentives are warranted, those types of organizations seem more appropriate.

 
At 7:27 AM, Blogger Richard Layman said...

actually I disagree. I know what those kinds of orgs. do. We aren't really talking about the kinds of commercial districts that need lots of incentives to attract retailers, but retail districts that are popular and have limited commercial space inventory.

The issue is twofold. Restaurants replacing retail because they pay higher rents. DC deals with this, somewhat problematically, in some districts by having a s.f. limit on restaurants.

OTOH, I'd say as retail and services decline, that number could increase, justifiably. The issue is to code by type of commercial district. The most neighborhood serving need to have limits to discourage retail displacement.

The other, and granted, this particular example is very very rare, is the replacement of an unduplicated retail category by an already existing retail category.

We have had this problem, a bit, with pharmacies in the city. They can pay higher rents. CVS has liked to go into movie theaters.

Similarly, in at least one other instance I can think of, CVS replaced a small grocery on L Street, because they paid a higher rent. But that area needed a small grocery more.

So really I am talking about rare circumstances, and the need for extranormal procedures to deal with.

Because I agree as anon and Alex B. have pointed out, having over specific codes can be as problematic as under specific codes.

I'm arguing for a bit better balance, recognizing the cases I am discussing are pretty rare and issues only in the most successful commercial districts and cities.

c.f. http://urbanplacesandspaces.blogspot.com/2007/09/formula-retail-restrictions-and-other.html

The other way that some communities deal with this is by overall restrictions on chain stores. SF has a particularly strong law.

I didn't mention that.

Chains rule the roost. The economics and organization of the retail sector have changed. OTOH, the character that distinguishes cities is "uniqueness." So this needs to be balanced too.

That's another element that can be considered in use/change/certificate of occupancy review.

 
At 7:29 AM, Blogger Richard Layman said...

to extend the point about this being a problem in popular districts not languishing ones, a comparable example would be Shadyside and Squirrel Hill in Pittsburgh.

These are the "best neighborhoods" in the city and are pretty much maxed out on retail space.

The reason that the "poor" but adjacent district East Liberty has "successfully" attracted big box and other quality retail is not because East Liberty is attractive in itself but because it is the only way for these big retailers to locate proximate to Pittsburgh's highest income neighborhoods.

Fortunately, it improves East Liberty simultaneously.

But if EL weren't next to SH and Shadyside, they wouldn't be getting this kind of attention and landing those retailers.

 
At 7:33 AM, Blogger Richard Layman said...

I wasn't clear about the limitation on restaurants. The limit on s.f. is for the district overall, and it has to be created as part of a specific "neighborhood commercial district overlay" for that particular district.

E.g., the one for Cleveland Park has a limit on restaurant space as a percentage of the overall amount of retail space. The NCD Overlay for H Street, if I remember correctly, has no such restrictions, because H Street has such a large inventory of commercial space (1 million s.f., including Hechinger Mall) and the problem is absorbing it all relative to the actual demand, and because of the reality that many of the spaces are small, providing a check on demand by large and chain retailers, who are locating more in newly configured spaces.

 

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