(Not) Understanding how retail chains make property decisions: Baltimore, Starbucks, and Salon Magazine

Salon has an article ("Black history bulldozed for another Starbucks: Against the new Baltimore" about how Starbucks is destroying black history in Baltimore, because they are moving into locations that had been black businesses--which happens to not be true, but makes for a less punchy headline.

But the reality is maybe more complicated, or at least different from how it's portrayed in the article--although the article is written in a fashion that I have a hard time interpreting.

Starbucks in DC at 3rd Street and Pennsylvania Avenue SE.

Although it happens that the word "bulldoze" isn't meant literally, it is true that "Starbucks can bulldoze" historic buildings in favor of new construction.

But remember that Starbucks doesn't own properties for the most part.  They are tenants.  So the key actor is the developer, who owns and develops properties.

The other thing I learned about Starbucks (and other chains)--besides "how every commercial district needs one as the solution"* (and this has been supported by the economists at Zillow, who fail to recognize that a Starbucks location is a follower of success not the creator of success, see "Confirmed: Starbucks knows the next hot neighborhood" and "Zillow says homes close to a Starbucks rise in value more quickly," San Jose Mercury-News), is that at the level of the market, it's not "Starbucks" making property decisions so much as their local commercial leasing representatives, even though they also have personnel dedicated to "global store development" for their biggest markets (Old job listing for store development, Starbucks.

* Starbucks follows, it doesn't lead.  I make the joke about Starbucks "as the one thing a commercial district needs" because when you work in the field, that's what residents come up to you and say, repeatedly.  It's not that simple.  Similarly, Zillow is wrong that Starbucks knows the next hot neighborhood.  They are followers, not leaders, and their locations are co-incident with what we might call high-value "amenity districts."

For example, Starbucks considers the location at 8th and D Streets SE on Eastern Market Square in Capitol Hill a distressed location, even though the number is full of houses costing $800,000 or more. There aren't many examples of Starbucks stores leading neighborhood and commercial district revitalization efforts.  In DC, they followed Xando...

For example, in Indianapolis and other Midwest markets, Veritas Realty represents Starbucks, and one of their principals has inked over 80 leases for Starbucks stores.

In DC, the reps retained by Starbucks are clued into how DC is organized, and that "historic buildings" are not only perfectly acceptable sites, but highly valuable sites in historic neighborhoods. A majority of DC's Starbucks locations are in historic buildings.

The renovated gas/caffeine station at Highland and Willoughby is now a Starbucks. (Lisa Boone / Los Angeles Times)

But this isn't the case only for DC or Boston or Manhattan or similar markets, as there is an article ("Starbucks restores old Gilmore gas station for your refueling pleasure") in the Los Angeles Times about how Starbucks has resuscitated a circa 1930s gas station as a cafe. 

You can't get much more "historic preservation" than that.

The challenge is in those markets where the local representatives aren't hip to historic buildings. And to figure out who they are and how to appeal to Starbucks' "Global Store Development" division to make a different decision.

In fact, it's not unlike Walmart and their push into center cities.  Now the company is willing to locate "in cities" when before they weren't. But that's just locating.

Where urbanists have made a mistake is in believing that Walmart now has a special commitment to building city-appropriate stores.  That is not the case.

Walmart doesn't care about whether or not the building is "urban". That's up to the developer who comes to them with a proposal.

 As long as the location meets their criteria, they don't care what the building is/looks like, etc.

So we have a one story Walmart on Georgia Avenue NW in DC, while others in the city are part of mixed use projects, with housing and/or office above, because that's the kind of projects those particular developers were creating.  It's just luck of the developer draw.

Anyway, the Gentri-fuck-ation piece in Salon is otherwise over my head.  Not unlike the piece in Gawker ("Irrigating the (Food) Desert: A Tale of Gentrification in D.C.") that blames improving supermarkets for gentrifying DC neighborhoods like Petworth.

I guess it's better to have crappy supermarkets.  But in any case, supermarket companies, like Starbucks, follow the market, they don't lead the change.