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Shooting the Bull: Podcast for August 3, 2008

Downtown retail: Big dollars, big owners, or the "big empty" to blame?

Over at my friend Barry's place, an interesting conversation's underway about downtown development and the amount of retail currently available in Durham's city center.

As Durham blog readers now, Barry's been on a tear about getting a slice of cheap pizza downtown for, I don't know, months? Years?

Referring to the spaces that Greenfire has applied for permission to demolish -- a subject that's raised a heated debate on Gary's blog, and garnered coverage in the Herald-Sun on Saturday -- Barry asks, basically, why aren't slots like this leased up already?

Aren't these exactly the kind of storefronts that you want filled with ethnic eateries, small galleries, or boutiques, to make a lively and walkable community? What are we going to get in their stead? And how long are we going to wait for it?....

Sitting in front of Toast last night, I could see the row of empty storefronts across 5 Points where Safari and Peacefire used to be. It's been a year since the city finished up its streetscape project, and Safari is still empty. How could that be? Walking back to my car along Chapel Hill St., at 6:45 pm, we were the only ones on the street. There's hundred yard long stretches of empty brick walls, roll up garage doors, and veneer surrounding the ground floor of a parking deck.

One commenter (who's also a faithful reader here) blames the rents. Others, Barry perhaps included, seem to blame the snapping-up of properties by Greenfire and other developers for the failure of every street-level pad to be filled with retail.

I suspect the picture is far more complicated than that, both in terms of the factors why downtown has as many empty storefronts as it does. That said, I think there's good reason to suspect the future may be brighter than my more pessimistic friends do -- while not ignoring the macro-level factors that could delay such revitalization, though not end it, to my mind.

Is it the Rents?: The first bugaboo in arguments like those at Barry's place is sometimes the cost of leasing space. And given a scenario where large development companies have bought up large amounts of space, the first assumption is that those acquisitions are to blame for empty storefronts.

And in fairness, the rents downtown may be too high for some businesses, particularly those that need a lot of space, to get established. (I know of at least one business eager to find a home, whose business plan calls for needing a lot of space to get running, and at a rate below what the market's ask for retail. That's proving to be a tough slog, which is a bad thing. More on this in a few days, possibly.)

But let's focus here on the smaller retail pads, the one- to two-thousand square foot spaces that are available for retail in Durham's city center. The leases on many of these seem to be running in the $14-16/sq. ft. per year range.

That includes properties like Greenfire's redevelopment at Rogers Alley, sure. But it also includes a number of spaces owned by smaller players, like the first-floor retail at the Snow Bldg. and the 1000 W. Main old Ivy Room space, both of which are asking about the same price.

Crazy dollars? Well, before its renovation in 2002, when Brightleaf Square was struggling to retain tenants, the downtown stalwart was charging $15-16/sq. ft. for space, when it was one-third empty. Now, after a major renovation, the complex is again largely full, as is the competing Peabody Place redevelopment next door. I'd suspect Brightleaf Square is near or above the $18-19/sq. ft. mark now.

Scientific's 401 Arts complex, home to Piedmont and the Branch Gallery, is leasing at $20/sq. ft.; Golden Belt is asking $14-$19.50/sq. ft. Similarly, American Tobacco retail space has had a reported asking price in the $25 and up per sq. ft. range, though I don't have independent confirmation of that.

What's the point? The point is, I don't suspect it's purely a matter of the level of rents that is keeping small downtown retailers from opening up.

After all, look around any of these areas. The only retailer or restaurant that's not a local concern is really Mellow Mushroom. (The 'Pose is a chain, too, but such a nascent one I tend to think of it as no different than a local biz.)

Clearly, at these rents, small local businesses are able to move in, set up shop, and be successful. While only Toast has opened in downtown in the past year, a significant number of businesses have been setting up shop in other parts of downtown over the last couple of years.

After all, Barry's raved about the Glenwood South district in Raleigh, and how many local businesses have gotten established there. Is it low rents that have driven that resurgence?

I'm not convinced. From what I can tell, Glenwood South's lease rates appear to be at or above Durham's. There's an old gas station on Hillsborough, near the GlenSo district, that is on the market leasing at over $40 a square foot, while other properties are much closer to downtown Durham's mark.

Barry's often griping about the lack of pizza downtown. And if we go back several years, when rents were cheaper downtown, you did see plenty of these businesses open -- and close. There was Anna Maria's Pizzeria, on Main St. Gone.

Then, later, Sal's Pizzeria at 325 W. Main. Gone.

They didn't leave because the rents were too high, Barry, or because the buildings were all acquired by well-funded developers. I suspect they closed because there wasn't enough traffic.

Building Traffic, Building Interest: If we want to understand the difference in retail activity between, say, Brightleaf Square and the city center, I think the issue comes instead to pedestrian activity.

The driver, to my mind, is that there's not a lot of pedestrian traffic downtown right now, because the areas of interest are simply too spread out and disconnected -- so far -- to spark a resurgence of downtown retail. You need some driver, some draw, to get people into an area in the first place.

It's critical massing, of course, that's the secret of success at both American Tobacco and Brightleaf Square. It's why Alivia's and the Federal and the like are sited where they are. And it's what I suspect Capitol Broadcasting and Scientific are going after with more development spreading east from the DBAP.

Was the streetscape project going to transform downtown overnight into a bustling retail environment? Not hardly -- but as I see it, those rebuilt streets and sidewalks are a prerequisite, an enabler to development.

In the past two years, we've seen Toast, Bull McCabe, and Rue Cler come downtown and be successful. Three more restaurants are set to join them in the next twelve months. I doubt any of the five would have chosen downtown as a location without such an investment.

Ideally, the presence of these businesses will bring more foot traffic downtown -- as will the addition of the Durham Performing Arts Center -- all of which should create the impetus for more retail and dining downtown. Yet all of these businesses are, relatively speaking, destinations. They're restaurants that you make a particular visit to downtown to dine at.

(Just as The Book Exchange, which I love, has survived for decades by being a place law students from throughout the state visit for textbooks. I doubt they get much walk-in street traffic.)

I think these new restaurants will be very successful, given the triple-play draws of the DPAC, DBAP, and the Carolina Theatre.

For their success to then reverberate into activity at neighboring sites, though, is the second step. You're starting to see that at Rue Cler, where the success of the restaurant has kicked off the renovation of a space just a couple of pads down from it, the Addison Building, which will have apartments and, yes, $16/sq. ft. retail on the ground level.

Between Five Points, the Baldwin/Kress area, Rogers Alley, and the Chapel Hill St. corridor, there are several such starting points for optimism of growth in activity. But it's going to take time to get this energy established. And it's much harder in a city center that has gaps between its areas of activity -- and between the city center and the Brightleaf and American Tobacco districts.

Will it happen? If these new downtown businesses succeed -- and they're better-funded and run by folks with more experience than some of the previous downtown generation's, which is a plus -- I think it will. But it's not an overnight process.

For those calling to see "everyday," "accessible" businesses downtown rather than high-end restaurants, my question would be, where's the traffic to drive that kind of business? Is there heavy foot traffic of people looking for

I mean, Locopops is open downtown, with a storefront to boot. And yet Locopops only opens limited weekday hours, not weekends. Why? The bodies aren't there to support it.

The bodies will be there for destination retail, of course, especially given the presence of other cultural amenities near downtown. But until there's the mass of people to support "browsing" businesses of the sort you see on Ninth Street, you won't see that type of everyday business settle in.

Residential is the Key: What will it take to get to a really interesting, lively downtown? Although the number of employees downtown has doubled in recent years, that's not a reliable driver of retail business.

I lived in Charlotte a decade ago, and despite being the corporate HQ of what are today Bank of America and Wachovia, Charlotte's downtown was completely dead on the weekend. I know -- I took my then-fiancee there to walk around and grab a bite to eat on a Sunday, only for us to wander for twenty minutes looking for anything open.

Today, of couse, that's changed dramatically. There are plenty of businesses, from bars to restaurants to shops, throughout the core of "Uptown" and in the wards around it.

The difference is residential units.

Employees come in during the day, get a cup of coffee, work, eat their bag lunch or hit the deli, and go home. Residents in an urban area, on the other hand, have far more needs that they'll want to have met, and can support businesses to that end.

Without residential, we should still end up with pockets of activity, like those in Winston-Salem's arts district or Wilmington's downtown. The increasing population and Durham's rising arts reputation should help to ensure that.

But if we're looking for a more lively downtown, a place that resembles Asheville's vibrancy and energy, it's going to take completion of the residential projects proposed for American Tobacco, West Village, the city center, and the DAP district.

There's no way to shortcut having bodies on the street, or in the beds, as a way to bring businesses downtown.

Given the national environment for residential project financing, a market that is very hard to crack right now, no one should be surprised if that takes a bit longer than it might have a few years ago.

But patience is something that successful downtowns need. The story of Asheville itself is instructive in that matter. It's taken well north of two decades to bring that city back from the brink:

Asheville, N.C., developer Patrick Whalen said he believes if you want people to frequent a city's downtown, people have to live downtown.

"The secret weapon for downtown revitalization is having residents doing the things they do as residents," he said. "That makes people feel comfortable about coming downtown." ...

Twenty years ago, Whalen said, people would have laughed at anyone predicting Asheville would become a "hot" destination.

"The motto in Asheville for decades was, 'That will never work here. Don't even try,' " he said.

Like a lot of small cities, Asheville had a bustling downtown through the 1950s, before new roads and development outside the city began drawing people and businesses away.

By the early 1980s, Whalen said, Asheville's downtown "was dead as a doornail."

Several projects aimed at revitalizating the city were taken on in the late 1980s and early 1990s, but almost all involved businesses.

"We had these beautiful storefronts, but the problem was, the downtown wasn't a good place to live," he said. ...

In 1990, there were seven residential projects under way in the city. Last year, there were 27 projects in the works.

At the same time, Whalen said, businesses such as restaurants, retail shops and entertainment venues are cropping up all over.

"When you have people living downtown, you attract people to the downtown," he said.

If you compare Asheville's timeline to Durham's, we're still in that late 1980s/early 1990s period. But the beginning of residential redevelopment downtown, coupled with the presence of destination restaurants and cultural draws, are what it will take to achieve the downtown I think we all want to see.

Comments

eah919

I agree 100% with your take on the problem- we need more bodies on the street, and that means residential.

I am no expert on Durham's real estate market, or real estate in general, but, judging from the current properties on offer downtown, I suspect with land prices and construction costs being what they are, any new residential space is likely to be either eye-rollingly 'high-end' (at least price-wise) or in a 'shoulder area' to the main downtown. Blue Devil and Streuver Bros. were probably able to make the numbers work due to the federal tax credits they'll get for renovating historic structures.

Somehow, I don't get the feeling that all these buildings with empty storefronts are just waiting for some small business owners to give them some love. I think some of the lack of activity downtown (creating either new residential or retail) comes back to the same, frustrating conversation about big landowners and speculation, and Greenfire (at this point) is just as guilty of that as the Ronnie Sturdivants of this town (and kudos for Scientific for actually bringing Golden Belt to fruition).

anc

Companies currently renting the available spaces are not actively seeking retail tenants. When my partner and I recently inquired (through Maverick Partners) about spaces for a retail establishment, we were told that businesses in need of office space would be preferred. We were quite shocked by this blatant admission since we had seen many advertisements for retail space. Downtown retail is essential for the revitalization to be successful! We certainly visit these establishments more often than any other downtown businesses...

Barry

Kevin - i don't think i'm casting the blame on any one factor more than any others. To be frank, i don't know what the cause is. But downtown is a problem. And after seeing the "Justice Center" design and listening to the presentation for the new library last week, and reading about Greenfire's potential plans on Gary's blog, it's become clear to me that the current path of downtown redevelopment is not going to solve the problem of not enough people and businesses in downtown Durham. Like i said, the actual trigger for me was the question "Don't you love living in Durham?" Which, for the first time, i had to hesitate before answering.

I think, if i had to point to one factor that is more responsible for the fact that downtown's "renaissance" doesn't really seem to be happening, it's what seems to be the near complete lack of vision that our elected officials are showing. Every building, every project, seems to stand on its own, as though in a void. Every project seems to be designed with its own self-contained parking deck. I get the sense that if someone were to propose putting one of those automated public toilets that European and West Coast cities have installed, in 5 Points or the CCB Plaza that the city would turn it down because there's not enough parking for the people who might use it.

There's no organic sense of place that's coming together downtown.

And i managed to get through that entire post and this one without once using the word "pizza."

David Rollins

If you want more cheap eats (downtown or elsewhere), I don't see how you can possibly support the meals tax since they draw a majority of their customers from the local population (vs. out of towners on expense accounts).

GreenLantern

I don't agree with characterization of office workers coming in for the day, grabbing a coffee, and eating their bagged lunches, never stepping foot outside to patronize local business. Did you poll the customers at Rue Cler or Symposium, or any of the other downtown restaurants about their mid-day dining and shopping habits? What about their plans for the late afternoon when they get off?

After reading some of the posts on Gary's and Barry's blogs the other day, I get the sense there is a rising tide of opposition to anything new and bold for downtown Durham, i.e. tall, glass office towers and private parking decks. There is an almost utopian vision that downtown business will somehow succeed and grow by relying on foot traffic from high-end residential lofts, that most Durhamites can't afford right now, who patronize row after row of 1- or 2-story quaint, funky bistros, art galleries, and boutiques. For high-end residents to move downtown, they need high-paying office jobs in a tower across the street for that short commute. The justification for the move is Live, Work, and Play, not just "Live and Play". I guess you could also add "Shop", but to get a supermarket or anything larger than an expensive downtown hardware store, you need to free up some real estate here and there.

I sense from some of these blog comments that the way it works is like this...either the planning commission supports our elitist vision for downtown, whether or not it's practical and cost-effective, or we'll beat up the politicians and drive away big developers and their big projects. The same argument was back and forth regarding the Performing Arts Center. Now it's Greenfire's turn to be whipped into submission if we don't get what we want. Stop trying to make Durham like Asheville. It's just as valid as not making Durham look like Raleigh. Just because Asheville doesn't have any new buildings with thousands of hungry office workers, doesn't mean we should be that way. Just because Asheville is overrun by artists doesn't mean Durham needs that kind of thing either. Other people live here you know. We need to stop thinking about downtown being on its own and apart from the economic success of Durham as a whole. Every taxpayer and resident of the entire city and county is a stakeholder in downtown development, regardless of whether or not they are well-connected. Those of us who can't afford downtown living love to see the progress that's going on, with the increasing tax base and jobs created by public/private investment of BIG projects as well as the smaller storefront ideas. I for one, would like to see less public investment and more private investment. Now that Greenfire, SP, and others are stepping forward with a large part of the financial risk, we shouldn't all be coming to the table this late in the game to try and stop them from building something practical just because we think a couple of worn-out buildings that are not that architecturally significant and appealing should be saved for years and years until someone wants to put in another coffee shop and creates maybe 5-10 jobs in that space instead of 500-1000.

The reason some of those buildings downtown are empty is because no one has the courage and financial support to step forward to either save them or turn them into something you vision as quaint and funky, without demanding public subsidies. I hear a lot of talk but no action from people who seem to think it's their mission in life to control what goes on but aren't willing to take the risk to do it themselves. It's only when a set of investors and developers step in that brings out vocal downtown critics that want to micromanage things and make them more expensive and impractical. Of course there are historic building that should and will be saved, but to say that every single parcel around the downtown area should be preserved just because it's old goes too far and threatens the economic progress we've made so far. Anything new and modern must be opposed just because it doesn't fit in well with our idealistic vision of what a city of 250,000 should look like, and nything that reeks of capitalism must also be opposed, because it's just too efficient and impersonal.

Kevin Davis

@Barry: You just said "pizza." Heh, heh, heh heh heh, heh.

I actually cut out the piece of the Asheville article that praised AVL leaders for two choices they made: building/rehabbing downtown parking decks and keeping gov't. offices downtown. I have a big problem with the design of the County deck not having street-level retail, but they sure as heck do need parking nearby.

Similarly, I don't hear people clamoring for decks everywhere in the city center -- but if the decks are so unimportant, why did downtown business folks complain bitterly about the Greenfire plan to rebuild the Chapel Hill St. deck, which (we were told) would have impaired the ability of places like Rue Cler to succeed?

Either that was a bit of dissembling... or there's a recognition that to draw enough customers, DT businesses do have to have parking at least in walking distance, if not on site. (It's a plus to the GF proposal, having limited parking at the Woolworth site with more on Chapel Hill St.)

BTW, this piece is responding to your post plus the comments, not simply your initial comments.

@David: That 0.5% tax won't have a bit of an impact on how much people eat out. Whether the tax is a good thing or not (i.e., should we be raising funds that way, what is the impact on low-income folks) is an entirely separate matter from its impact on business, which is probably close to zilch.

GreenLantern

Using Ronnie Sturdivant or Bill Fields in the same sentence as Greenfire or Scientific Properties is insulting. If you don't know the difference between a speculator and a real developer, names shouldn't be bundled together to make a point.

Kevin Davis

@GL: Worth noting that downtown is, in fact, a National Historic District. There are good reasons to be sensitive to maintaining its architectural integrity, including the need for DT property owners to be able to continue to qualify for tax credits.

Personally, I agree that it would be good to see the Hill Bldg. have a tall neighbor adjoining. However, I'd certainly like the street-level facades to be preserved and integrated into the building, because of the support they provide for the (largely Greenfire-owned) property across the street.

That said, I think there's a flaw in the ointment to the idea that downtown is better positioned for towers-and-office-workers versus more of an creative class/arts-and-culture direction.

First off, Durham is always going to be a smaller city than Raleigh and Charlotte, and by significant numbers, given the geographic expansion opportunities both cities have. That makes them more likely to draw the corporate HQ spots that typically go after a tower.

What is Durham's (and Chapel Hill's) strength? Intellectual capital and a creative-based economy. Look at who's in American Tobacco: high-tech startups; support departments for Duke; IT consulting firms; an ad agency; non-profits; a for-profit educational institution.

These kind of tenants are drawn to a funkier, creatively-oriented building space. A law firm or an accounting firm is unlikely to want space in the old Strickland Bldg., for instance. (Though it might be interested in the Diamond View buildings, which have a far more "corporate" feel inside.)

DT Durham is also likely to draw organizations that support the mega-campus activities at RTP, but which can't locate their due to the Park's design for large-tenant campuses.

Downtown's old architecture in the city center has small-footprint, narrow-bay space in spades. Those buildings are perfectly suited for these kind of tenants, and for retail, too.

Those kind of tenants above and at places like atc, along with the presence of Duke, UNC, NCCU, etc. in the local MSA, really do make an arts and creative positioning for DT make a lot of sense.

I'm happy seeing new buildings go up down by the justice center -- more on that, with some renderings of the Scientific Properties project, tomorrow -- and think a car lot is a great thing to replace with density. But I don't think the small-sized city center buildings are something to demolish and replace. They're unique fits for our city's strengths.

Michael Bacon

I'll admit that I'm constantly comparing in my head what's going in Durham now to what I saw in Asheville growing up. I could go on about that for a long time, and where the comparisons are valid and where they break down, but I will say this:

Downtown Asheville's renaissance didn't happen overnight. It has more or less been in continuous process since the early 1980s, as the last downtown movie theaters were closing up and a few landmark restaurants folded their doors. Repeatedly through the 1990s, the city's efforts to invest in downtown were under attack, particularly by suburban and mall-based business owners who saw it as a waste of their tax dollars. The construction of Thomas Wolfe Auditorium, historic credits for various minor projects around town, new parking decks, and a big project to re-do some streetscapes were all met with catcalls. The city's version of DDI (which I think is one difference between the cities -- Downtown Development (Asheville) was never obsessed with big corporate clients the way DDI is) was forced to expand its mandate to the whole city, instead of just downtown.

Did they get everything right? Of course not. Thomas Wolfe was built with a lot of design flaws and has been needing a re-do recently. The downtown library is about as pedestrian-unfriendly and cold to the street in design as they come. Some of the parking decks were built dominating the streetscape and hiding businesses behind them on one-way, pedestrian mall-like streets (like Wall St.) where businesses perpetually struggled.

But most of all, it just took a lot of time for enough business to colonize and succeed. Many promising stores closed after a year, and many that I always thought of as pillars of downtown as a kid (Stone Soup, Bill Stanley's) are gone now, and now I've lived long enough to see several business that I thought of as the "new downtown" thrive for over a decade and finally close (e.g., Bean Streets, Be Here Now). But most importantly, the trend has always been a very slow but steady uphill climb, with, say, 5 businesses moving in and 3 closing every year.

In the past five years, downtown has added not only thousands of office workers and a couple hundred residents, but also fabulous restaurants such as Rue Cler, Piedmont, Mellow Mushroom, Toast, Five Points Cafe, Joe and Jo's/Bull McCabe's, Chamas, Amelia's, as well as some that I'm not thrilled about but seem to be doing pretty well. Morgan Imports expanded recently, and several businesses relocated here. Yes, we've lost some businesses too -- Ringside and Peacefire come to mind -- but we've gained more than we've lost.

This was never going to happen overnight, nor was it ever going to be smooth. With effort, investment, we'll continue to stumble towards our renaissance. But it has never been easy.

KeepDurhamDifferent!

0.5% will not have an effect on local eateries? What world are you living in? Eating at Rue Cler you won't notice the difference, but you sure will when you are counting your change at the McDonald's dollar menu.

It's this type of ignorance that explains the echo chamber of the local blogosphere. I hope Rev. Carl calls you on it tonight.

Which do you enjoy more -- local artists at the gallery crawl, or milquetoast productions of whatever broadway show captures the attention of the upper middle class? The meals tax is aimed at poor people, pure and simple.

eah919

I didn't mean to insult anyone with my 'speculator' comment- the point was, with the vast holdings Greenfire has in this city, we haven't seen a whole lot of 'real developer' action out of them. Speculators buy land, and then wait for the market to change. To the untrained eye, that seems to be exactly what they are doing on most of their property.

That said, I think their tower could be great, a long as it does not send us too far down the road to Charlotte-dom (there's a desert of a downtown). I do know that the absolutely worst thing they could do would be to knock down those three structures on Main St. without bringing in the construction crews in short order. To let that site languish would be a disaster.

I agree with Michael above that the evolution of cities is a long, three-steps-forward, two-steps-back process. What is worrisome to me is that with the downtown market turning into an oligopoly, not a lot of stepping is happening in either direction.

CG

Keep in mind that developers are essentially going into business with the retail establishments that fill their spaces. For example, my guess is that it will cost several hundred thousand dollars to build out the Revolution restaurant in the Baldwin Building and that Greenfire will be footing most of that bill. Given the high failure rate of restaurants, that is a huge risk to take, but one they are willing to take because they have confidence in the business plan and the experience of the operator. If the restaurant were to go out of business, guess who still has to pay the monthly debt service to the lender? Yes, that would be the developer. If a new tenant wanted to then lease the space but also wanted to modify it, guess who once again will foot the bill?

There are a lot of people out there with good intentions who want to open a restaurant or a retail shop. But if they come to the table with a weak business plan, little or no business experience, an expensive build-out or no ability to guarantee or partially guarantee a lease (or some combination of the aforementioned), why should a developer take a risk on them? That would just be a poor business decision.

We need more residential development and more capable retail/restaurant operators. Even the best operators will fail sometimes for a variety of reasons, but smart developers, who have to sign personal guarantees on bank loans, are making the right decision for themselves, for their investors, and I would argue for downtown Durham as well, by turning away the expensive, high-risk ventures that are likely to fail. For the right business, they will take that risk.

For the record, I believe Greenfire has announced the opening of 3 restaurants downtown - it's not as if they are sitting idle. These things take time. Commercial lease deals usually take many months to negotiate and only a few minutes to fall apart. We all need to be patient.

Michael Bacon

The restaurant tax will cost a nickel on a $5 value meal at McDonald's. Adjusted for inflation, for nearly two centuries, we didn't have a form of currency that you could exchange that represented a value that small. It was considered small enough to be a rounding error, not important enough to track.

Tell me how that's going to crush poor people again, compared to the 80 cents it's going to add for a standard dinner for two at Rue Cler?

Kevin Davis

@David: Food for thought from the US Bureau of Labor Statistics, ca. 2004. Looks pretty darned progressive to me, save for the lowest unit.

Table 2.
Income before taxes: Average annual expenditures and characteristics,
Consumer Expenditure Survey, 2004

Income: Less than $5,000
Average number of persons in consumer unit: 1.6
Average annual expenditures in food: $3173
Food at home: 2,030
Food out of home: 1,143

Income: $5,000 to $9,999
Average number of persons in consumer unit: 1.6
Average annual expenditures in food: $ 2,409
Food at home: 1,695
Food out of home: 714

Income: $10,000 to $14,999
Average number of persons in consumer unit: 1.8
Average annual expenditures in food: $2,981
Food at home: 2,105
Food out of home: 876

Income: $15,000 to $19,999
Average number of persons in consumer unit: 2
Average annual expenditures in food: $3,567
Food at home: 2,435
Food out of home: 1,132

Income: $20,000 to $29,999
Average number of persons in consumer unit: 2.2
Average annual expenditures in food: $4,076
Food at home: 2,591
Food out of home: 1,485

Income: $30,000 to $39,999
Average number of persons in consumer unit: 2.4
Average annual expenditures in food: $4,986
Food at home: 3,056
Food out of home: 1,930

Income: $40,000 to $49,999
Average number of persons in consumer unit: 2.6
Average annual expenditures in food: $5,452
Food at home: 3,263
Food out of home: 2,189

Income: $50,000 to $69,999
Average number of persons in consumer unit: 2.8
Average annual expenditures in food: $6,312
Food at home: 3,640
Food out of home: 2,672

Income: $70,000 and more
Average number of persons in consumer unit: 3.1
Average annual expenditures in food: $9,042
Food at home: 4,734
Food out of home: 4,308

Source:
Consumer Expenditures in 2004
U.S. Department of Labor
U.S. Bureau of Labor Statistics
April 2006
Report 992

Download here:
http://www.bls.gov/cex/csxann04.pdf

Barry

i could spend hours, if not days or weeks, documenting instances of cities around the country reducing or eliminating their minimum parking requirements regarding new development or redevelopment. There are a number of contributing factors as to why downtown Durham remains such a dead zone. The lack of parking spaces is not one of them.

David Rollins

@Michael: it will only cost a nickel? Geez, that's not much for the minor league baseball museum or the new performing arts center. How about a dollar?

Which do you enjoy more:

(A) the funky art gallery on the sketchy side of town, "CEO Yungsta" spinning his rhymes in E. Durham, folk art, and great local bands like Midtown Dickens (my personal favorite)?

(B) yet another tedious off-broadway production such as "Rent", "Avenue Q", and "Hairspray" where rich folks can laugh at the struggles of the working class and the racism that they feel no longer exists?

Which do you think are better served by the poor?

crc128

RE the tax:

I disagree with the proposition put forth by Michael, Kevin, and Barry that "no one will notice" the tax. I think it's true that no individual will notice the tax. In the aggregate the tax will be felt, and will alter the economic activity affected.

I will, however, join Michael, Barry and Kevin in supporting this tax. Unless someone presents a compelling counterargument, I will likely vote for it.

In this case, I think the benefits outweigh the negatives. First, though some charge that this tax is regressive, even if that's the case, it is also voluntary: you don't have to eat out. Lower income people who choose to economize can do so and avoid this tax totally. Second, even if this tax reduces economic activity at restaurants in the short run, it should increase it in the long term, as the restaurants will be the beneficiaries of the increased tourism this tax supports (and is drawn from). Third, the rest of the city will benefit from the increased traffic and economic activity, as people flowing through Durham will help revitalize the image of the entire community and show the region that we're not the crime-capitol they all believe us to be.

KeepDurhamDifferent!

With regards to eating out being optional, I assume you are exempting the homeless. I would would consider supporting the tax if there was an exemption for meals costing less than twenty dollars. The mother who just finished her second job should not be penalized if she wants to pickup a bucket of chicken on her way home.

The Durham Committee on the Affairs of Black People opposes this tax, and you should too.

barry

Just to be clear crc, i haven't explicitly stated my support for the meals tax so much as my disdain for the specious arguments being made to oppose it. As well as the poor quality of leadership being shown by some of our elected officials as the discussion heats up. I've laid those thoughts out here:
http://dependableerection.blogspot.com/2008/08/leadership.html

As i've said elsewhere, i have no problem with people who think that the projects that will potentially be funded by these revenues are not worth pursuing. That's a legitimate topic for debate. But the homeless issue? Please. I'm sure i've done a lot more panhandling and sleeping under bridges in my life than Rollins has done. Even under those conditions, for me, eating a meal at McDonald's was still a luxury.

Todd Patton

The 1% restaurant tax should have been paired with an elimination of the 2% tax on groceries. The restaurant tax would be a lot easier to accept that way.

If the referendum fails, perhaps it will see a second life in that format.

GreenLantern

Why not a 2% restaurant tax paired with the elimination of the county's 2% tax on groceries? Nearly everyone pays the 2% tax on groceries, but many of the dining patrons are from out of town. I doubt a 2% tax on restaurant tabs is going to hurt anyone. It's not enough to deter eating out, and since it's voluntary when getting groceries is not, what's the problem?

mcdemc

David: I see you continue to try and fearmonger in opposition to the Prepared Foods Tax. I am waiting for you to back up your thoughts with any facts or at least a real, rather than hypothetical, anecdote. Either way, you keep saying the same thing..."Oppose the tax!" without providing a reason that any of us should (except for the fact that the DCABP opposes it, but if that were a reason any of us should do anything, why would we be taking the time to read about and weigh in on these issues?) Please, if you have any apolitical, compelling reason to support your position, convince me!

I eagerly await your response.

mcdemc

GreenLantern: While your idea is a novel one and might be a reasonable solution, it is simply not feasible. The political maneuvering that has taken place over the last decade to try and get the legislation through the General Assembly to allow us to even vote on a prepared foods tax (HB2690) limits the taxable amount to a maximum of 1%. While a combination of reducing or removing the grocery tax while implementing a 1-2% Prepared Food Tax would likely be more palatable for the public and the politicians, the work necessary to move a proposal like that forward would not be on the General Assembly's list of priorities for at least a few years, especially given the fact that they just passed HB2690 letting us vote on the 1% tax. Also worth noting is that if we do not approve the 1% sales tax on Election Day, the likelihood that the General Assembly would again empower us to vote on this issue would severely diminish. I think we need to focus our energy on ensuring the passage of this tax so we can provide the cultural amenities our community needs, from funding major capital projects to supporting independent artists and everything in between. By providing more opportunities for cultural engagement, our local economy will strengthen and the revenues will accrue to the city, to local businesses, and ultimately to the employees they hire. This would help to reduce poverty and reduce the so-called "burden" this tax would be putting on our poorer citizens.

David: If an extra $.05 on a $5 bill is really such a big deal, maybe you should address the price disparities at fast food restaurants around Durham and examine why some restaurants charge more for the exact same food, but in a different location. The difference in price a poor citizen pays at a more expensive fast food restaurant is more significant than the 1% tax they would pay on the lower-priced fast food meal. So when your burger costs $2.99 in one place and $2.79 at another, you tell me...is $0.20 difference more than $0.03? It seems you are getting all dressed up with no place to go. There are better ways to address the plight of poor citizens in our community than to criticize a revenue source that will provide more opportunities for everyone in Durham.

GreenLantern

byrmddemc: Thanks for the detailed explanation, but it really does confirm the notion that the state food tax should be repealed, along with any local add-ons.

Good luck getting the support of DCABP...Perhaps you should explain to them what cultural activities the prepared food tax is paying for will directly benefit their constituents. They, and we, do continue to shoulder an ever increasing burden of tax increases to support a wide range of cultural activities that many of them may or may not see a clear benefit. There is a growing cultural divide between the black community and the progressive community in Durham as a result of recent gentrification and focus on downtown revitalization that cannot be ignored.

There must be some behind the scenes arm-twisting going on between the mayor and the DCABP, given the recent difficulty in getting the property tax rate established vis a vis the requirement for maintaining our excellent credit rating. I sense there is a growing faction that wants to hold the line on any more tax increases, regardless of the perceived benefits. If we want these "user fees" to pass, we need to be a lot more specific about how we're going to spend the money.

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