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.