The Commercial District Advisor

Small Business Series, Part 3: Bar Marco is Open For Business!

2012-01-13T16:34:00.000-05:00

After all the trials and tribulations…Bar Marco is finally open for businesses!This week I caught up again with Bobby for an update on how things are going now that Bar Marco has started serving guests. We focused our discussion on marketing – and what he is doing to get customers in the door. He also offers some good advice for District Managers on how they can support start-up businesses like his. In the case of Bar Marco, Neighbors in the Strip, the local non-profit whose mission is to promote and improve the Strip District, has been a great resource and advocate for the business.

The strategy for Bar Marco right now is to build a loyal following in an organic fashion. “We are in it for the long haul” says Bobby. He and his partners are resisting the urge to position themselves as the next best thing in the market. Growing too fast is a concern, as it might hurt them in the long run by testing their ability to maintain the quality of the customer experience. As many of us know, the most successful restaurants are characterized not by sexy advertising campaigns, but by their repeat customers and word-of-mouth advertising. This slow build to success is what Bar Marco is aiming for – and what Bobby believes will allow the restaurant to maintain focus on the little details that make or break the experience for diners.

What that means is that the beginning can sometimes be slow going. A few nights here or there have been quiet, particularly before the service industry folks starts walking in the door. Yet when coupled with the private parties, Bobby says they are already covering all of their expenses with revenue earned. Quite a feat for newbies!

Here are some elements from the Bar Marco marketing playbook…

Building relationships and creating genuine connections. For Bobby this means many things, and is really at the core of his belief system. Early on, even before opening their doors, the partners connected with local artists and gave them the space to show their work. This is a win-win for all involved. The walls of Bar Marco are covered with original art work, giving local artists a place to show and sell their work, it also give Bar Marco a nice genuine local ambience, while giving artists a reason to promote Bar Marco to their own networks.
Serve the service industry. The Bar Marco kitchen is open until 2:00. Now, this is unheard of in ‘dem parts! Yet Bobby thinks their effort to reach this group is an important piece of their success strategy because these are the folks who are the real influence peddlers in the Pittsburgh market. Not only that, but it seems to me that as trust relationships are built, this clientele's experience and input into what is working and what isn't at Bar Marco will come in handy!
Start slow. In this case with private parties. These provide steady revenue and provide a strong foundation for word-of-mouth marketing. They also give the back of house opportunity maintain the quality of the service and food and ramp up to more ambitious dishes and robust menu.
Finally, they have gone the route of tried and true sales marketing. In this case, they provided free ‘small plate’ tickets distributed locally. Since food is relatively inexpensive give away, it provides folks with a reason to spend more on higher ticket items like wine and drinks.

We’ll keep an eye on Bar Marco to see how these strategies work over the long haul.

So what can a district manager do to help small business owners like those at Bar Marco? I posed this question to Bobby and he was quick to say that Neighbors in the Strip has been great, and offered some additional ideas for my readers.

Talk it up! By promoting and talking up local businesses, helping drive early success and consistent traffic through the front door.
Keep tabs on the business. A district manager should visit new businesses regularly, keep on top of ways you can support the new business.
Use your district networks to promote the business. Bobby suggested posting updates about new businesses in the form of a blog on your district web page. I would add that District Management Entitites should celebrate business openings with great fanfare, including a ribbon cutting with local officials and a press release…buzz begets more buzz and interest in the district.
Build a brand. Help by building a district brand. This will differentiate the district from others, and in turn help attract visitors to the district without the business having to spend marketing dollars.

Here are some fun pics of the great food, the dining room, and our good friend Bobby behind the bar!
Don't forget to join Bar Marco’s Facebook Page. And be sure to visit when you are in Pittsburgh.

Why is it so important to resist the leap to action?

2012-01-11T13:20:00.002-05:00

I am a planner by nature, so I often council clients to 'go slow to go fast'. But why is it so critical to take time to plan, to accurately diagnose a problem before leaping into action? This morning, my friend over at Bar Marco in Pittsburgh, co-owner Bobby Fry, wrote in a "Morning Meeting" email he sends to friends and colleagues about the important of taking the time to plan as he negotiates the trials and tribulations of opening a business. His email was a bit of an inspiration for this post....

Coincidentally, I also happen to be reading a book entitled "The Practice of Adaptive Leadership" co-authored by Alexander Grashow, a friend from college who is now head of Cambridge Leadership Associates. In it he describes the pressure that leaders feel to "Do something!" We have all felt it and seen it...communities so tired of planning they simply want to "Do something!" But what happens if you don't take the time to think about your priorities? To actually step back and take a moment to DIAGNOSE a problem? Can you imagine if doctors treated patients before taking time to accurately diagnose the sickness? Would you trust a doctor who said "that lump is probably cancer, we don't need any tests or anything, let's just try chemo and see how it goes" Perhaps a morbid comparison, but an important one none the less.

As a consultant whose job it is to diagnose sick commercial districts, I often have clients who wonder why we can't just leap to action. In fact, one client I'm working with now (who shall remain nameless!) wants to leap ahead and bring in architects and transportation consultants to prepare a streetscape plan. This without having any discussions with the key downtown stakeholders and players, including local merchants, whose input is critical to ensuring this is the right direction for the downtown. Perhaps a streetscape plan IS a good idea, but the question needs to be asked, how does it fit into the bigger picture of the district vision? How might streetscape improvements address the underlying economic conditions that are making it difficult for businesses to survive and thrive? In fact, leaping ahead to streetscape improvements might be the nail in the coffin for businesses struggling to keep their doors open. Can you imagine what a street closure or sidewalk construction would do to struggling downtown businesses? The answer to that question is as horrible as a cancer diagnosis....the loss of a business owner's life savings, the loss of local jobs, the loss of businesses downtown....

Yet, I often find that my job is to council the client to resist the tendency to take action without first understanding the problem. I understand that sometimes it can be frustrating to wait - but the alternative can be a series of false starts that results in the loss of community interest and energy. Being able to gather all of the facts, conduct focus groups, interviews, surveys, market studies...all of that boring PLANNING...is so critical to making the RIGHT decisions that keep people from wasting vital energy and resources. At the end of the day, it's not planning that slows things down, it's the LACK of planning that derails efforts to move forward. People take action, see failed results, and then lack the energy to take action again. It's a perenial problem improperly attributed to the failure to planning.

Today in the News...

2012-01-11T10:50:00.000-05:00

"More Pittsburgh neighborhoods consider setting up special districts" [1/10, Pittsburgh Tribute]
A number of Pittsburgh neighborhoods are moving ahead with the formation of Neighborhood Improvement Districts (NIDs) but facing challenges along the way.

"A Vision for Urban Parks" [1/10, New York Times]
Daniel Biederman, co-founder and current president of the 34th Street Partnership, the Bryant Park Corporation and the Chelsea Improvement Company, muses about his career and provides some insight on why he doesn't believe commercial districts should use public funds.

"DC Riverfront group says new study shows Green Line corridor leading regional development" [1/10, Washington Post]
The Capitol Riverfront Business Improvement District will release a study this Thursday that looks at how the neighborhood has changed as a result of it's programs.
"Department stores past their prime as retail anchors" [1/9, Minneapolis Star Tribute]
Is the traditional mall anchor dying? This article speaks to the impact of this trend on malls - but the implications for downtown could be significant.

To hire or not to hire...consultants for Business Improvement District formation

2012-01-04T16:42:00.002-05:00

Approximately 2/3 of BID formation efforts used consultants to help with planning. Typically, consultants are hired to ensure that the effort is led or advised by individuals with expertise in BID formation...and to ensure that the local partners do not need to reinvent the wheel. Depending on the level of local capacity, consultants can be hired to lead the effort (effectively playing a role similar to paid staff) or they can simply provide guidance depending on the staffing and capacity of the local organization leading the effort.

Some typical consultant engagements include:

Formulating a District Plan or BID Business Plan
Defining, and helping to refine the proposed BID area
Running mock assessments
Facilitating focus groups and surveys with local stakeholders in an attempt to inform BID programmatic activity
Marketing, communication and public relations

Jumping into a consultant engagement is a significant commitment. A British study found that BID planning can take 1-3 years, and depending on the effort, ended up costing as little as $6,500 or as much as $500,000 for a full blown, multi-year planning effort. The media expenditure for BID formation was about $78,000 US Dollars.Note

In the United States, funding for BID formation efforts have typically come from public sector sources, usually CDBG (which as we know are drying up). In other places, sources include private sector contributions. In El Salvador, San Salvador, where I was part of a team that just completed a BID formation effort, seven highly capitalized local property owners and developers came together to fund the effort entirely on their own.

So what you should know before starting a BID Planning Effort?

Look at your state enabling legislation. Take the time to find it and ready it. What are the obstacles to BID formation? Depending on the political environment at the time of passage, enabling legislation was sometimes designed to prevent BID formation, rather than encourage it. In Rhode Island, for instance, the BID law specifies that only municipalities with populations of 500,000 or more can form BIDs. Well guess what, only the capital, Providence, falls in that category!
Be prepared for the long haul. These things take time, on average 1-3 years. And inf fact, it is not uncommon for BID formation to fail the first time around. So take a moment to consider whether your organization has the capacity (read STAMINA) to launch a formation effort. Winning over property owners and business owners is a hands-on task - and no short cuts are allowed! This means one-on-one meetings with key players, lots of public meetings, and outreach, outreach and more outreach.
Successful BID formation often follows smaller efforts that have taken hold in the community. Are you building off of some small, successful project that has helped to garner goodwill? If not, consider starting there. Successful BID formation is often built on the message that the BID will continue to build upon existing successful efforts. The difference is that now, these efforts will have the staff and resources to make them even more successful than they already are. This helps reinforce the sense that the BID assessment will be well utilized and won’t result in waste.
Don’t just engage the public sector, partner with them. The early, active and engaged public sector is typically a critical component of BID formation efforts. BID formation is more likely in places where a local public agency is supporting BID development, through funding for planning and/or on-going technical assistance.
Keep your footprint tight, if you can. Is your business district well defined – both geographically and from the perspective of your typical customer? If your business district is spread out geographically, it may be more challenging to offer cost effective services like sanitation and maintenance. It can also be more difficult to establish a unique, unifying identity for visitors.

If you think you are ready to take the plunge, there are lots of resources out there to help you take the next step.

Turning Students into Customers

2012-01-03T16:54:00.000-05:00

Do you have a college or university in or near your district? Do your local businesses benefit from student spending? My friend and colleague Anthony Capese, Executive Director of the Albany Central Avenue BID, is taking proactive steps to ensure that students become loyal customers. After holding "nearly 20 focus groups with students", Capese noted that "they simply didn't know, and rarely found a reason to venture off of campus." The challenge of attracting student customers is certainly not unique to his district.

His efforts, however, are a great best practice for BID's. For a few years now, the Central Avenue BID has spearheaded a "SUNY SHOWCASE" event (SUNY = State University of New York) during student orientation that offered RA's (resident advisors) information about downtown retail and service offerings. The idea is that RA's are in the best position to pass this information along to their students. Nearly 200 RA's and student staff participated this past August, taking Aqua Duck Trolley Tours through the District, ending at a afternoon-long party at a local hotel, replete with Foosball tournaments, video games, artists, and giveaways.

For more information on the program, click here for an article written on the CABID blog.

Now is a great time to start putting out feelers to your local schools to see how you can leverage student orientation to your district's benefit.

Video: Small business owners share the impact of Business Improvement Districts

2011-12-15T11:08:00.000-05:00

It can sometimes be a challenge to sell small business owners on Business Improvement Districts. In this short clip, Commissioner Rob Walsh of the New York City Department of Small Businesses, Fulton Area Business Alliance Executive Director (and Coro Neighborhood Leadership alum) Phillip Kellog and various small business owners talk about how BIDs are helping small businesses with their bottom line.

Commercial districts take their retail attraction efforts to ICSC

2011-12-07T14:06:00.000-05:00

Retailers, brokers and developers set up booths at ICSC for
the purpose of making deals. Commercial districts can benefit
from ICSC's tradeshow too.

EXHAUSTED! Yes…that’s what I am right now after having spent the past two days walking the floor of ICSC with five different non-profit organizations and Business Improvement Districts. For those of you unfamiliar with ICSC, the International Council of Shopping Centers hosts the grand-daddy of all trade shows where members of the commercial real estate industry (mostly all retail and restaurant focused) come together to make deals. The largest ICSC trade show is in Las Vegas every May, but the New York show is the second largest with over 6,000 participants and 300+ booths. If you have vacant sites and are looking for national or regional chains this is a place where, over the course of two days, you apply good ole’ fashion shoe leather to meeting people and making connections. Instead of spending days and weeks of staff time researching retail websites in search of site selection criteria and contact information, you spend two days walking the floor and accomplish work that would otherwise take you much, much longer. Not only that, but face time with retailers, brokers who represent retailers, developers, service providers, etc. can also make the difference between an email/phone call that gets returned and one that doesn’t. In at least two cases, our sites walked the floor with their local property owners...even better!

So how do you prepare for ICSC? Planning starts early…
Our team has spent the past year preparing these sites to attend ICSC. The process began with market analysis, but certainly did not end there. We helped these groups develop a retail vision for their districts while simultaneously identifying opportunity sites by working with landlords and local brokers. We also developed district-wide leasing plans that pin-pointed retail categories that reflected three basic criteria – 1) retail categories could be supported by the market, 2) retail categories that matched the space available in the district, and finally 3) retail categories that complemented local community needs and wants. Finally, we prepared marketing material that conveyed the message of these leasing plans for distribution and use in retail prospecting.

Once all those elements were in place, preparing for ICSC included scouring the exhibitor and attendee lists to develop a hit-list of retailers (and brokers who represent those retailers) who reflected our priority retail categories. With district marketing material and sell-sheets for the available spaces in hand, we worked the floor methodically, approaching booths, grabbing business cards and site selection information. In some cases, we made appointments with the right people in advance. In others, we simply walked up to the booth and asked to speak with the rep for the region we were in. If we couldn’t talk to the representative at that moment, we grabbed a card and moved on.

...and doesn't end once the trade show is over!
As you can imagine, a lot of work happens after the trade show ends. Follow up is critical. The contacts made at ICSC are invaluable, not just in the short-term, but in the long-term. We will recommend that each district send regular e-mail blasts detailing their vacancies to their now growing list of brokers and retailers. These retailers may not need space right now, but you never know what their expansion plans will be in 6 months or even two years. It’s a slow-tedious process….but it works!

Special “Small Business” Series Part 2: Bar Marco, two weeks until opening...

2011-12-02T16:06:00.000-05:00

In Part 2 of this series, we follow the story of Bar Marco in the Strip District in Pittsburgh and how their epic struggles to secure a $40k loan could make or break their business - before they've served their first customer. Follow their story on Facebook...and expect to drool over the wonderful pictures of authentic tapas that they have been cooking, enjoying and plan (hopefully!) to serve for customers very soon!

Partners from l to r. Michael Kreha, Justin Steel,
Bobby Fry and Kevin Cox

Partners Bobby Fry, Justin Steel, Kevin Cox, and Michael Kreha are working furiously, staying up nights drilling steel and getting the kitchen ready to open their wine and tapas bar in Pittsburgh's Strip District. Yet Bobby's frustration is palpable. In about two weeks, Bar Marco will open its doors. To date, these guys have personally financed $169k in renovations and it shows. Michael is an architect designing custom fixtures (take a peek at the lovely chandelier, below) and taking great care to uncover and preserve the features that make this firehouse so unique and beautiful.

Yet their investment, and essentially their life savings, is at risk. Why? Because what they need right now is a $40k loan to open - and stay open. None of the partners have debt, all have good credit scores, and the nominal $400/month debt payment on the loan is more than doable, particularly given the fact that at least one of the partners has retained his well-paid full time job. Yet they still can't get a loan.

What is the problem here?

Initially, Bobby admits they overreached by trying to finance a much larger loan. But they quickly scaled back those plans and decided to phase the project instead, allowing them to self-finance much of it (with help from friends and family). With the focus squarely on opening the ground floor of the firehouse as a Phase I, the need for financing was significantly reduced.

A custom-designed chandelier
graces the restored tin ceilings

At that point, Bobby and his partners pursued loans from traditional and non-traditional lenders...all to the same end. Loans were rejected, after promising starts. In the beginning, Bobby noted that his first meetings with loan officers were always enthusiastic, but by the time the project moved up the ladder to more senior loan officers, somehow the excitement and opportunitity, and what made their project compelling and irresistable, got lost in translation.

What's interesting is Bobby's take on the challenges. Bobby comes from a finance background, having spent a few years on Wall Street working in the financial industry. So his insight is particularly relavent. He believes the challenges that he and his partners face point to systematic problems with the entire financial system. For someone like myself with limited knowledge about the inner workings of the financial system, his commentary was really eye opening...

The loss of relationship lending has hurt "Main Street" businesses

Gone are the days when the decision to provide financing was made by the guy in the front office. In the days of "relationship lending", decisions were made in part on the "soft" information that loans officers collected. In the case of Bar Marco, every loan officer who walked through their space and saw first hand what they have done was enthusiastic. But for some reason that enthusiasm didn't translate to the lending application. This in part because small banks no longer exist. These smaller banks have been gobbled up by larger banks and lending institutions and now have multiple managerial layers. The wiggle room on decision making got narrower, and as loan applications moved up the totem pole, something, clearly gets lost in translation.

Willing to pay a higher interest rate, but not offered the option

Bobby also squarley points the finger at national monetary policy. In his customarily frank way, he expressed frustration at the fact that he and his partners would have gladly paid for a higher interest loan - but instead found loan officers who were "trying to cram 3% loans down our throats" and then rejecting them because they were too risky, young and 'inexperienced'. Bobby believes there is a huge disconnect in how lenders approach projects and how they assess risk. If a loan is riskier, raise the interest rate to reflect the higher level of risk, right? Sounds reasonable...

Love the fixtures...

What is even crazier is that the partners were willing to use their liqour license as collateral, but have found that while the license itself is of greater value than the loan they seek, it is an untraditional form of collateral that lenders are not willing to use.

Alternative Financing

One option is crowd-source financing or "crowd funding". It essentially involves going directly to the community to finance a project. For a business as engaged with the local community as this one, it seems like a promising idea. According to Wikipedia crowd funding describes the "collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations." Although it may be late in the game for Bar Marco to do this (two weeks and counting!), Bobby is still exploring one crowd funding option - kickstarter.com - which helped a brewery in Pittsburgh raise almost $200k.

At this point, they also plan to continue pressing lenders, finding any way possible to get them into the space to show them what they've done in efforts to revisit lending opportunities.

In the meantime, the countdown clock continues. Will Bar Marco sit beautifully restored and ready for business, yet empty but for a relatively small gap in financing? I sure hope not, but the story is still unfolding. Stay tuned...

The Commercial District Advisor heads to Mexico to speak about Latin American BID Formation

2011-11-18T11:51:00.001-05:00

Enjoying a cup of coffee...

A few months ago, my colleague David Feehan and I were asked by the Interamerican Development Bank to present our experience as part of a team that played a role in establishing the first Business Improvement District in Latin America. The conference, entitled PPPAmericas, concluded yesterday.

Our work in El Salvador was funded by the IDB, and as we came to understand over the course of the two day conference, BIDs are an entirely new concept for most in the world of public-private partnerships. While most panels discussed the construction of jails and infrastructure, we stood out like a sore thumb, with an interest in...gulp, shopping districts?! But our session was well attended by over 200 practitioners from all over Latin America, and many seemed quite intrigued by what has been accomplished in El Salvador. Jorge Iraheta represented the Corporation Zona Rosa, our client, and described in great detail how they executed the BID concept (known in Spanish as "Distritos de Mejora Comercial") with some creative thinking outside the box...but more about that in a follow up blog entry.

The conference was held in the central Mexican pueblo of Guanajuato. What an amazing city. I recommend ever urban planner (or urban planner wanna be!) visit this place. It is one of ten Mexican pueblos to sport the coveted UNESCO World Heritage Site distinction. I first visited Guanajuato almost 15 years ago. From 1997-98 and then again from 1999-2000, I traveled and lived in over 13 Spanish speaking countries on a Watson fellowship, and then later as a Fulbright scholar, looking at how historic Latin American cities were remaking themselves. At the time, I would sometimes pinch myself as I wandered the streets of an old colonial city exploring hidden nooks and crevices. That was my "job" for almost two years of my life. And to find myself again wandering the same beautiful streets of Guanajuato taking pictures (I do tend to get funny looks when people see me taking pictures of trash cans!) was a real pleasure.

Guanajuato is a little piece of heaven that is unlike any other place on earth. There are barely any cars on the few passageways (I hesitate to call them roads) wide enough to accommodate them. That's because the town has an intricate system of underground tunnels that accommodates most automobile traffic. This leaves the town a true pedestrian domain. The streets are also packed with students from the university - which is in the heart of the historic district - lending a vibrancy that always accompanies young people. Street musicians serenade diners at the dozens of outdoor eateries. The Plaza Union, one of the main plazas in town, is filled with neatly trimmed trees that have grown into an imposing and massive green canopy, made even more imposing by the fact that the trees are carved into a neatly shaped box. When you enter the Plaza, you feel as if you are walking into a lush living room with leaves for a ceiling. As you walk the streets, every turn uncovers a surprising vista, a hidden plaza or building to discover. I spent half the day walking around exploring before making my way to the city museum and local market for a few small gifts. I did refresh myself with a stop at a little cafe, where I enjoyed the view of the bright yellow cathedral.

If you get lost, there are helpful directional signs to guide you. Although I did find the standard downtown map unnecessarily confusing. When a self - professed map geek has problems reading your maps, there is a problem. But getting lost was, frankly, half the fun. I also realized what an incredible disconnect there is between the world of BIDs and the world of tourism districts. All of the directional signs seemed sponsored by the state or city run tourism council. In the US, this kind of signage can be sponsored and maintained by BID's, freeing critical public resources for other needs. I couldn't help but wonder what kind of resources were committed to upkeep, particularly as I stumbled upon more than a few signs marred by graffiti. But those sights did not affect the overall experience, and the cleanliness of the streets was more a rule than an exception. See for yourself...

Plaza Union's perfectly trimmed trees

An intersection in the underground street system

Signage in need of maintenance

The outdoor living room...

Surprising elements at every turn

Directional signage

Outdoor cafe along a typical 'street'

Car traffic is tucked behind the buildings
as it emerges from the underground street network

A downtown map marred by graffiti

Award-Winning BID Leadership Training Program Accepting Applications for Second Round

2011-11-14T16:24:00.000-05:00

2011 Coro Neighborhood Leadership Participants at
Inaugural Retreat

I am so pleased to announce that applications for the award-winning 2012 Coro Neighborhood Leadership program are now available on-line.

As the Program Director, I am proud to have had a strong hand in shaping the inaugural curriculum and in leading a truly accomplished cohort of 20 seasoned professionals through the five-month program. What these BID and CDC practitioners discovered was that professional and personal networks can be improved at any stage of professional development, and that key leadership skills (even the best of us need this!) are bred, not born. Becuase this is a field that attracts professionals from a variety of backgrounds - the process of bringing them together to share in dialogue and best practices is valuable not only for what they learned from the program, but perhaps even more so for what they learned from one another. The program also recieved a 2011 Downtown Merit Award by the International Downtown Association (IDA) for excellence in downtown leadership and management.

In announcing year two of the program as part of a comprehensive set of neighborhood retail initiatives, Mayor Bloomberg stated “small businesses are the backbone of our City’s economy and our neighborhood retail corridors are the driving force behind job creation and economic growth". The City's efforts will "provide local neighborhood retail districts with the tools they need to jump-start local economic activity, attract new retailers and reach a whole new range of consumers.” [See Oct. 27, 2011 Press Release]

And for those of you who like video...NY1 did a nice news piece, click here to take a peek: "Officials Work to Revitalize Lower East Side Businesses"

For all these wonderful accolades, the most significant feedback comes from participants. Blaise Backer, Executive Director of the Myrtle Avenue Brooklyn Partnership, and no stranger to accolades for his work turning Myrtle Avenue around ("Pratt Institute Takes an Interest in Making a Neighborhood Nicer", NYTimes, 2/11/11) offers this testimonial:

"Neighborhood Leadership was a huge benefit to my professional development and has helped me both on and off the job. As the director of a small non-profit, my busy workday rarely provides me the time to reflect on my leadership skills and work habits. This program provided me with a much needed opportunity to pause from work in order to develop my skills, assess my current challenges and develop strategies to overcome them, and to learn from my peers and Coro's excellent facilitators. I highly recommend the program for those working in the field of neighborhood and commercial revitalization."

The Coro Neighborhood Leadership Program is made possible by generous funding from the NYC Department of Small Business Services. Eligible participants include staff at nonprofit organizations that serve commercial districts in New York City and whose work focuses on commercial revitalization activities. A majority of participants selected will serve low to moderate income neighborhoods with a limited number of slots open for participants who do not fall within this category.

Click here for more information on eligibility and to download an application.

Special “Small Business” Series: The story of Bar Marco, Part 1

2011-11-03T14:54:00.000-04:00

Bar Marco will open shortly in this
wonderful old firehouse, constructed
in the 1860's.

On a recent trip to Pittsburgh for a client, I was fortunate to connect with a group of four business partners opening up an exciting new bar/restaurant called Bar Marco in the up and coming Strip District, a gritty area northeast of downtown Pittsburgh historically known as a produce wholesale district.
Bobby Fry, along with his partners Justin Steel, Kevin Cox, and Michael Kreha, all share an infectious energy combined with a strong commitment to their vision. Bobby in particular also has a deep interest in community and economic development. Having left New York and spent a few years on Wall Street, he returned to Pittsburgh for a variety of reasons, and ended up teaming up with old friends from high school to pursue the dream – a European-style wine and tapas bar.

Why is Bobby’s story important? Because these are exactly the kinds of businesses and business owners that make commercial districts tick. They not only give back to the community, but their businesses become the kind of places that drive repeat visitation. They also set a tone for other business owners and elevate the overall perception of retail and restaurant offerings overall - which ultimately helps all district businesses.

In less than a year, Bobby has found a seat at the table, becoming a board member at Neighbors in the Strip, a small non-profit dedicated to promoting economic development in the district. He and his partners are also committed to sourcing their products from Pittsburgh area vendors. The economic impact of these decisions is a small drop in the bucket, but if replicated by other business owners in a district, is precisely what keeps the local economic engine going…and growing.

So how do we make sure our districts are positioned to attract the Bar Marco’s of the world? This series will help us unpack that question, as we follow the story of Bar Marco and use it to explore the various ways commercial district entities can support and facilitate the growth of similar neighborhood businesses.

PART 1: LOCATION, LOCATION, LOCATION
I started by asking Bobby what made him choose the Strip over other neighborhoods in Pittsburgh. He replied that initially the area wasn’t on his radar. They were looking at another neighborhood, but one night one of the his partners was chatting with someone who mentioned that the Firehouse, a well known restaurant in an old 1860’s firehouse, was closing and that space was soon going to be on the market.

How important is data, really?
The Strip District wasn’t on their radar – but once they knew the space available they took a closer look at the area as a location. They needed to move quickly – and what they knew about The Strip was enough to help them decide to forge ahead. According to Bobby, two key metrics played a role.

Transit access was excellent. Penn Avenue is a busy street that leads to downtown. Not only that, but they are five blocks from downtown and have a small dedicated parking lot to boot. “It doesn’t get better than that” says Bobby.
New high-income development completed or in the pipeline. A quick drive through The Strip District confirms what locals already know, the jump in residential housing means a growing, and captive, market...just the kind of folks who might patronize a European-style wine bar.

So with some basic information about the market, some familiarity with the District, and a strong gut instinct, they were off…signing leases, getting financing (more on that later!), starting construction, and basically turning their concept into a concrete reality.

What are the take-aways here? While there is not much you can do in the short-run about your district’s transportation access, Bobby’s feedback makes a strong case for keeping track of and mapping new development and construction in the pipeline. If a retailer wanted to locate in your district, would they be able to find this information on your website?

What can a district management entity do to help?

Bar Marco Owner and Architect
Michael Kreha hard at work

While small business owners can go it alone, it always helps to have help. And that is where the local commercial district management entity comes into play. Becky Rodgers, Executive Director of Neighbors in the Strip has been a tremendous asset, says Bobby. “She is a champion for local business. When we got here, we were introduced to her by our landlord, and she immediately worked on making e-introductions for us to people who own lofts and residential buildings in the neighborhood”. Working with Becky, Bar Marco recently held a charity event that resulted in a packed house – even before they had officially opened. This kind of word-of-mouth marketing is a tremendous asset, it helps build buzz and is setting up Bar Marco for success down the road.

Bar Marco is set to open in a few weeks, in the meantime, the construction dust continues to fly as Bobby and his partners work furiously towards their official opening. The determined look on partner Michael Kreha’s face says it all…

Bar Marco is on Facebook. Be sure to "Friend" them to keep up with their story....

Round-Up: Long Island City, Queens, NY

2011-11-03T14:40:00.000-04:00

Long Island City, a former waterfront industrial area on the East River, facing Manhattan, has seen an incredible amount of development recently. With those new residents have come a more diverse retail mix.

Some great examples of signage, seasonal decorations, and creative storefront facades. These are the hallmarks of a up and coming business district....

I also LOVE this facade treatment for a local bakery....look closely. Those are rolling pins!

Now here's the kicker. This appealing outdoor space is next to.....a GAS STATION. Amazing what some smart design can do to mitigate a not so pleasant circumstance.

Transforming a District by Supporting Small Businesses

2011-11-03T13:46:00.000-04:00

Kerry McLean is figuring it out. But it isn't easy.

Kerry is Director of Community Development for WHEDco, the Women's Housing and Economic Development Coporation, a non-profit looking to revitalize a mile-long stretch of Southern Blvd. in the Bronx. Attracting businesses to her district hasn't been simple. Property owners are hard to get a hold of. Vacant spaces are in disrepair and show poorly in a market where retailers have other options. And financing for the one's who do come her way is hard to come by. Yet despite these challenges, her district has seen a net gain of seven new business and reduction in the vacancy rate from 24% to 16%. Quite an accomplishment.

Yet her experience has yielded good insight. In a low-income market that struggles to show it's best face, the businesses interested in the district are often the small, inexperienced kind. She has found that not only do current businesses struggle to grow, but new businesses can't get a toehold in the market for lack of financing and technical assistance. To address these needs, WHEDco is sponsoring the 2nd Annual "Grow your Business: Financing and Business Resources Event" tonight at their offices off Southern Blvd.

There are three main ways that organizations can help small businesses, these include:

Training and Technical Assistance (in-house or through partnership). This can include anything from facilitating permitting and licesning, to providing design assistance, to doing general business planning and problem solving.
Providing Access to Capital by facilitating access to for/non-profit lenders and public sector resources and incentives. Think facade improvement grants or low-interest loans..
Foster peer-based assistance and advocacy, including seminars and trainings.

WHEDco is well on it's way to working on all of these issues. So congrat to Kerry and her team!

Click here for a local tv newstory on WHEDco's efforts.

BID's efforts pay off for residents, businesses with street closure and block party

2011-10-19T10:49:00.000-04:00

The energy and excitement captured by this video tell the story of Putnam Plaza, a segment of street in Clinton Hill, Brooklyn that was recently closed to traffic. Its new life as a public plaza was celebrated with a block party that had people, literally, dancing in the streets. Local cafes and convenience stores did a brisk business as well.

This event was a true community affair, led by the the Fulton Area Business Alliance (a Business Improvement District), which sponsored the plaza. Phil Kellog, a Coro Neighborhood Leadership alum, shared his project with us at our final session where every participant shared the story of a project that they had worked on throughout the course of the program. Phil managed all coordination with city agencies necessary to make this project a reality. The plaza is yet another reason why BID's are an excellent community investment.

Here's a great feel good video by a local filmmaker that captures the excitement and makes ya wanna dance!

Putnam Block Party from adele pham on Vimeo.

Inside Retail Attraction: Going after the Regional Independents

2011-10-06T12:31:00.000-04:00

Most of the communities I work with recoil slightly when I say "chain store" and "retail attraction" in the same sentence. In fact, after CDA's inaugural 'Best Chain on Main' contest was over last year and the winners were announced, I heard from a number of organizations who mentioned that they were reticent to submit a business for consideration because they didn't think it fit the profile of a chain. The idea that chain stores are bad because they drive out mom-and-pop businesses is unfortunate - and also doesn't reflect the spectrum of retail as it exists in the marketplace. In fact, many of retail and restaurants that people think of as mom-and-pop stores are in fact defined as "chains". A "chain" is a business with multiple locations that share a formula for management, merchandise, format and branding that is applied all stores. This definition of chain holds whether you have 3 sites or 3,000 sites. We all know examples of these regional indepedents. In Pittsburgh, Crazy Mocha, owned by Ken Zeff, with more than two dozen locations in the region is a good example. In New York, Gothic Cabinet Craft (a winner from last year's Best Chain on Main' contest), has 29 locations in the New York tri-state area.

So perhaps we need to use a new term to describe those in-between retailers, business with 2+ locations that are still under independent ownership. On the Chain Retail Spectrum, these "regional independents" or as my colleague Mike Berne calls them "chain-lets", are a valuable sweetspot for local retail attraction efforts. Regional indepedents are ideal for district retail attraction because the businesses are typically locally-owned and retain the character of mom-and-pops, yet also carry the experience and management skillset necessary to maintain multiple successful locations. These business owners are savvy, yet don't have the resources to undertake a formal site selection when they consider expansion. So getting in front of them to make a successful pitch can be critical - because their expansion is often unplanned and done only as opportunities present themselves in great locations. These owners make new location decisions based mostly on 'gut' and a deep insider knowledge of the local marketplace. The fact that regional independents are usually locally owned also means that you can find ways to connect with the owner or ultimate decision maker - often by shopping or eating at the restaurant and asking to speak with the owner. Connecting with the right representative from a national chain, on the other hand, can be an inside game. It can be challenging to find the right person to talk to - and sometimes they want you to go through their leasing agent or broker rather than connect directly. Attracting regional independents to your district is not only easier, but it helps your district retain the local character that differentiates itself from other districts as well. So the next time someone says "chain" and "retail attraction" in the same sentence, don't discount the opportunity!

Going "Store by Store" to Help Local Business Owners Improve their Displays

2011-10-05T09:47:00.000-04:00

Finding ways to help local business owners improve their window displays is a perenial issue. The small convenience stores typically found in urban areas are notorious for their cluttered displays, boxes and merchandise in the window blocking views into the store (which has the added "benefit" of turning store into a target for thieves), and posters and stickers haphazardly placed over all the windows. Many of us are very familiar with this challenge. But a creative partnership between a local Visual Arts school and a local development corporation in Staten Island hopes to change all that. As a consultant to the Coro Neighborhood Leadership Program, the first commercial district leadership training program of it's kind in the nation, I had the benefit of hearing Michelle Sledge, Economic Development Coordinator for the Northfield Community Local Development Corporation share the impact of her "Community Change Project" with her NL colleagues as part of our final program day.

The results of her efforts, a program dubbed ¡Revive!, brings together graduate students from the Manhattan School of Visual Arts (SVA) to provide volunteer service that helped make the display windows of Monte Alban, a Mexican market, more appealing. According to Michele, the owner couldn't be more pleased with the outcome and believes it is helping business. Her story is one of many that I heard yesterday that continue to inspire me - and I hope they inspire you too! I'll be sure to share a few others with you in the coming weeks.

Here is a great video documenting the day....

Landlord acknowledges that leasing decision can transform a neighborhood, but let's space lie fallow

2011-10-03T11:19:00.000-04:00

An older image of Tony Malkin's building,
once occupied by Conway

Tony Malkin is the owner of a long vacant retail space along the Broadway corridor near Macy's in New York City. He's not wanting for interested retail tenants, yet the retail space, located across the street from the beautifully renovated Herald Square, sits hulking and vacant.

Malkin acknowledges the impact of his leasing decisions on the neighboring district, saying in a Wall Street Journal article that selecting the right retail tenant doesn't just change a building, it can also transform a neighborhood. Yet despite interest from tenants over the past few years, ranging from Nordstrom Rack to Best Buy to Nike, he hasn't even begun formally marketing the space. Landlords like this are frustrating, on one hand they acknowledge that their leasing decisions play a significant role in neighborhood transformation, yet they conveniently ignore the negative impact that a vacant space can have on the district. Malkin goes on to say "With the right tenant," Mr. Malkin says, "I see no reason for us not to be a logical extension off of 34th Street and Macy's." Yet because his cash flow needs are likely met by the office space above the ground floor, he's in no rush to lease his space. Not many owners are in a position to forgo millions of dollars in yearly cash flow, but clearly Malkin thinks the right tenant is worth the wait. What do you think?

Shame on Cisneros! Don’t use the term “village” if you don't mean it

2011-09-29T12:39:00.001-04:00

Really now. Is this a village?
Brandford Village, a gated community in Pacoima, CA.

This week, former HUD Secretary Henry Cisnero and Executive Chairman of CityView, an institutional investment firm focused on “urban real estate” (their terminology, not mine), will lead a media tour of Brandford Village, a for-sale new home community in Pacoima, CA. Here is the problem. The 62 single-family homes that comprise Brandford Village are in fact the furthest thing from “urban” or “village” humanly possible. A village is a place that both businesses and residents call home. A real village is someplace where a child can walk to a corner store and buy a pack of gum or an ice cream cone. Where Main Street (aka the commercial district) is integral to “Elm Street” (the residential district). I mean, c’mon, this “village” doesn’t even have sidewalks! And it only gets worse. It’s a GATED community. Wow.
Frankly, I’m surprised that the Honorable Henry Cisneros, whose track record supporting urban communities is unrivaled, is letting his name and organization be used to promote a development that violates so many basic principles of urbanity. So I ask only this: Cisnero’s, please...use your influence and position to instead invest in communities that truly honor the term village, the traditional mixed-use downtown and neighborhood commercial districts, often surrounded by residential housing, that dot the American landscape. There is no shortage of these communities in need of your investment.

Managing Mix: Redefining the Downtown Anchor

2011-09-26T17:21:00.000-04:00

In the retail industry, the word anchor is often narrowly defined. For many, an anchor store is a big box tacked on to a mall, filled with general merchandise and the words "Macy's" on the side. Downtown anchors, on the other hand, are much more diverse and eclectic, and include a slew of uses and activities that may be nontraditional in a typical shopping center, but are just right for the traditional downtown and neighborhood commercial districts.

As you consider ways to drive retail traffic to your downtown - anchors are a critical piece of the puzzle. Like a mall developer, downtown anchors define the downtown brand, so attracting an anchor, or helping to grow an anchor, inevitably becomes part of your district's strategic positioning. But I encourage you to take a moment to define anchor more broadly. If you do, you'll begin to understand the variety of ways in which other uses play a role in driving pedestrian traffic to all of the businesses in your district.

I have found that the Urban Land Institute offers a categorization of anchors for retail entertainment destinations that is also applicable to the downtown context:

Activity generators - Traditional theatres, movie theatres, cultural and educational facilities and institutions - these are all anchors that generate activity. Visitors come to your neighborhood specifically to visit these locales. The more unique and interesting the offerings, the further people will travel to experience what your community has to offer. A great library can be a wonderful activity generator. I worked in one community where the library held daily events that drew thousands of visitors a week, both during the day and in the evening. These visitors often left the library looking for a quick bite to eat, and local coffee shops and delis were more than happy to oblige. Under the best of circumstances, activity generators support the growth of complimentary retail in the immediate vicinity (i.e. walking distance) of the activity generator that cater to the same customer. As you think about retail mix in your district, identify these activity generators and think about the kind of retail and services that would compliment the use. Engage your anchor institutions in a conversation about what goods and services they would like to see around them and use this to inform your retail leasing strategies.

Activity extenders - These activities are typically complimentary goods and services that give visitors more of a reason to stay in your district, beyond their original destination. These uses typically include restaurants and eating establishments. Nothing keeps people an extra hour than a tempting place to eat or grab a cup of coffee. I also like to make the argument that public restrooms are an important and sometimes overlooked activity extender as well. If there are no restrooms available when nature calls, a trip or visit to a store will be cut short, perhaps indefinitely. When I was pregnant I distinctly remember being pleasantly surprised that the apparel store Motherhood Maternity had a ladies room on site. "Of course!", I remember thinking, they want to keep you here as long as possible! Bookstores always have restrooms for the same reason. They know that the second you leave the store, they have lost you as a customer.

Activity inducers - These are those niche and speciality retailers that are destinations in their own right. In New York, these include unique apparel of speciality food stores (Trader Joe's comes to mind). FAO Schwartz on 5th Avenue. In my Queens neighborhood, the well-known Indian grocery store Patel Brothers serves this function as well. Great commercial districts have at least a few of these activity inducers that in some cases have become synonyms with the district. If you have one of these retailers - be sure to support their efforts to market and promote themselves.

These are but a few examples of nontraditional anchors...

News Roundup: September 23, 2011

2011-09-23T16:22:00.001-04:00

Ardmore Initiatives's 'Downtown Dollars' effort honored [Mainline Media News, 9/23]
The Pennsylvania Downtown Center presented the Ardmore Initiative, downtown Ardmore, PA's business authority, with an award recognizing the impact that the program has had on small businesses. Four Armore banks contributed $10,000, which allowed for the printing of $20,000 dollars worth of Downtown Dollars during the winter holiday shopping period. Shoppers were able tp purchase Downtowns Dollars at a 50% discount for use in local sotres. The Dollars sold out in four minutes.

City Centre video walls an 'interactive, entertaining' first [Vancouver Sun, 9/23]
One digital media company explores marketing downtown businesses to shoppers via giant indoor digital video walls.

City to launch program to bring in retail shops downtown [Montgomery Advisor, 9/22]
A 576-square foot incubator will become home to small businesses 'testing the waters to see if there is a market for their product downtown.'

Downtown Los Angeles Looking for Unique Stores [California ApparelNews.net, 9/23]
The Downtown Center Business Improvement District is 'scouring the area's successful retail streets trying to recruit boutique owners who might want to open a second outlet in the downtown area'.

Five District-Wide Strategies to Help Small Business Owners Succeed

2011-09-19T10:51:00.000-04:00

Helping your existing businesses succeed can be a challenging task. Small business owners are a notoriously challenging bunch. They went into business for themselves for a reason, right? They also don't want to be told how to run their businesses, least of all by someone without small business experience. If you have not built a trusting relationship with your business owners, don't start by telling them to improve their window display or change their store hours (as tempting as that might be!). That said, there are ways to help your existing businesses without seemingly lecturing them. There is a subtle difference between telling them what to do and sharing valueble information with them that can help with critical decision making. Here ar a few strategies for offering help in a way that is consistent with your role as a district manager....

1. Know where they can find free or low-bono technical assistance. Many cities have organizations that offer these services, either through a local university, the City or State. In Pittsburgh, the University of Pittsburgh's Institute for Entrepreneurial Excellence offers business owners access to expert consulting and mentorship. In New York City, the City's Business Solutions Centers in each of the five boroughs are a one-stop shop for small business services. If you don't know much about these resources, take the time to set up a meeting with the Director of these programs to introduce yourself and see how you make help your businesses make better use of their services. Once you realize what resources are out there, share this information when you visit your businesses, as well as in your newsletter and on your website.

2. Conduct market data - and then share it! Small businesses often go on gut when deciding business strategy. The next time you commission a market analysis to define your district strategy, be sure to share this valuable market data with your businesses. But don't turn it into a data dump. Take the time to interpret the data with them. Better yet, invite the firm that collected the market data to present this information. Sometimes information is better recieved when delivered by a percieved outside expert. In Pittsburgh, LISC MetroEdge provided a local Community Development Corporation with market data that indicated significant neighborhood change that was under most local business owners' radar. The organization took the time to communicate their findings with local businesses. Most significantly, they found that younger professionals were moving into the traditionally older Italian enclave. A local business owner who had been serving the older market, siezed upon this information and began growing offerings that were more reflective of a younger crowd, which meant changing her offerings to include more kitchen and houseware goods as well as cooking classes for the younger set.

3. Offer opportunities to network with other businesses. Host breakfasts and invite speakers to present on issues that businesses have told you they care about. Be sure to also leave ample time for networking over coffee. When booking speakers, take care to ensure that the topics they cover directly reflect concerns or issues that business owners have raised with you, otherwise, these busy entrepreneurs will be no-shows.

4. Engage an expert and offer direct technical assistance to your priority niche businesses. One BID director in an upstate community where I work took a very strategic approach to technical assistance. After commissioning a market study from my firm that recommended strategic positioning as a restauraunt district, the BID identified a local restaurant consultant to conduct audits of participating businesses. The audits included an in-depth analysis of the restaurants strengths and weaknesses, from front-of-the-house to back-of-the-house management issues. The consultants efforts were part of a comprehensive effort to help improve service and quality at existing restaurants in an effort to strengthen the restaurant niche overall.

5. When all else fails, know when to walk away. Sometimes, despite our best efforts, a business owner remains uninterested in our help. In these cases, you have to know when to walk away. Remember, your time, and the resources of your organization, are valuable. When this happens, demonstrate your value by helping other business owners. If your efforts are successful elsewhere, you may find a business owner who had previously rejected your help is increasingly willing to listen. Walking away, however, does not mean abandoning the relationship. But be sure to continue to visit the business owner - the chilly reception you initailly recieve may just need time to thaw.

An easy way to generate buzz and attract businesses to your district

2011-09-14T11:25:00.000-04:00

One often overlooked business recruitment strategy is also one of the most rewarding - celebrating your retail recruitment success stories by announcing the opening of a new businesses with great fanfare. Issuing a press release, holding a ribbon cutting, inviting key local stakeholders, these are all part of the process of building buzz for your district, buzz that can ultimately raise your profile as a great destination for retail. It is also a fantastic form of marketing for your district. You never know who will read the local newspaper coverage - be it a potential business owner or a broker with just the right retailer for your district. The idea that an objective third party (i.e. the media) is touting the district is one of the best forms of free advertising you can ask for. So don't forget to celebrate the opening! And don't forget to take great pictures and post them on your website afterwards!

Here is a link to a press release announcing two recent business openings along F and 10th in DC's East End. The release was prepared and issued by the project's developers, but it's a good model for district managers as well.

Roundup: Ideas for Downtown Marketing

2011-09-02T11:43:00.000-04:00

There is never a shortage of creative ideas for downtown marketing and events...

Franklin Tennessee's "Downtown Tour of the Arts" is a monthly "open house" where art lovers are invited to check out interesting art and enjoy a free glass of wine and modest appetizer. For more information on the program:
["Franklin offers first Friday art crawl", The Tennessean, 8/30/11]

"Wine Walk & Shop" along Miracle Mile in Miami
Select shops on Miracle Mile serve guests a variety of light summer wines and offer special pricing on merchandise.The first 100 guests to purchase tickets receive exclusive event gift bags and complimentary valet parking, sponsored by the BID. For more information on the program:
["Wine Walk & Shop on The Mile set for September", The Miami Herald, 8/31/11]

Bergenfield, New Jersey's "Bergenfield Bucks" Program sponsored by the Bergenfield Special Improvement District (BSID) awards “Bergenfield Bucks” Gift Certificates, good at participating businesses located in the district as a strategy to drive visitors to downtown. For more information on the program:
["SID says Big Bucks promotion went well", NorthJersey.com, 9/1/11]
["Bergenfield Bucks", gobergenfield.com, 7/11/09]

Do bikes and businesses go together? In L.A. they do!

2011-08-17T13:04:00.000-04:00

A $72,000 investment by the L.A. County Public Healthy Department along three corridors is reaping rewards for local businesses, according to an article on Streetsblog Los Angelos, "Long Beach: Good for Bikes, Good for Business". In addition to the creation of bike infrastructure like bike lanes and bike parking, the Bike Friendly Business District (BFBD) program includes the following:

a cargo bike shared by businesses in the District for deliveries and errands
bicycle valets
"Bike Saturday" events that include bike repair and maintenance workshops and where local businesses provide discounts to patrons

While bike shops and related businesses are benefitting, other businesses owners believe that the bike friendly atmosphere has "opened up a new market for all of us". The success of the program is leading organizers to consider expansion to other communities.

On-Line Videos for Mom-and-Pops Bring New Customers

2011-08-16T09:48:00.000-04:00

Great idea! A promotional video paid for by a grant from the Downtown West Orange (NJ) Alliance is helping to attract new customers to the town's oldest and most storied mom-and-pop hardware store. For more details check out the article [West Orange's Oldest Retail Store Goes Digital, West Orange Patch] or watch the video here:

Designing Retail Space and Getting it Oh So Wrong

2011-08-09T11:25:00.001-04:00

Can you imagine the following scenario?

An architect is working on a shopping center and is trying to design the ground floor retail space. There are a few challenges with the site, and the architect doesn’t have a ton of experience designing retail space. The developer says, “do whatever works.” The architect does his job and completes the design, which includes a set of steps to each retail space, a response to the sloping condition of the site.

Fast forward to building completion. A day care center provider is looking at the space, but how do parents get their strollers into or out of the building? A pharmacy looks at the space, but how do their senior citizens in need of prescriptions get up the steps? And did I mention that the small parking lot doesn’t provide direct visibility to the entrance – something the pharmacy requires to improve the sense of safety for female customers? A doctor’s office looks at the space, but what about his patients with disabilities? A Dunkin Donuts looks at the space. The voltage specifications are off, and anyway, the columns are in all the wrong places. A small format grocer looks at the space, but why isn’t there a dedicated loading zone, moreover, the ceiling heights are way too low to meet the grocer's needs.

No surprise, the space lies vacant for months and months. It's hard to believe that any shopping center developer would take such a cavalier attitude with their multi-million dollar investment.

Now let’s replace “shopping center” with “mixed-use affordable housing”, and we have a TRUE story inspired by a recent conversation I had with a successful architect who shared a story about a former client.

So why am I talking about affordable housing, isn't this the Commercial District Advisor? In many communities, mixed-use affordable housing projects are an extremely effective commercial revitalization strategy. Housing creates density and demand for products and services, which in turn creates opportunities for retailers. Housing can also stabilize a district and can serve as the catalyst for private investments. Yet as the example illustrates, there is a problem, and it’s a big one.

In New York City, a recent study by the Department of Housing and Preservation found that the vacancy rate in mixed-use projects was 27%. To see how astonishing this is, let’s put this number in context. In April, the Wall Street Journal wrote “Mall vacancies hit their highest level in at least 11 years. In the top 80 U.S. markets, the average vacancy rate was 9.1%, up from 8.7%.” [“Malls Facing Surging Vacancies", April 7, 2011] So, if the WSJ considers a “surging” vacancy rate to be 9.1%, a 27% vacancy rate is CATASTROPHIC.

WHAT IS GOING ON HERE??
The problem is complex, and is not only related to poorly designed retail space (although that is a tremendous problem). In many cases, developers have limited familiarity with retail space and actually say “do whatever works” to their architects. They also use public funds in the form of tax credits for the residential portion of the building. With building budgets tight, the pressure is on to make the residential portion of the building as efficient as possible. This sometimes results in oddly placed columns that break up the ground floor space and make it less attractive to retailers. In some cases, it is market related. Developers are creating ground floor retail space because it is the popular policy approach, yet in some areas, the market may yet be too weak to support it.

A few years ago, I took a CDC to the International Council of Shopping Center’s annual conference in Las Vegas. The CDC has created marketing material, had site plans for a mixed-use affordable housing project, and was ready to pitch the ground floor retail space, located on a future transit line, to drugstores. The response was lukewarm. In part because of some of the problems raised above. The columns were in the wrong places, the dimensions did not meet their typical format, and most importantly for the retailer, the parking lot was not visible from the front entrance. The CDC went back to the drawing board and redesigned the building to incorporate the retailers suggestions. Their first design, which reflected a significant investment of time and resources, went down the drain.

So how do we ensure that affordable housing developers make better decisions for their retail space? Here are a few tips:

Start early: During design, consider the ideal uses and retailers for the space, investigate their site selection requirements and share those with the architect.
Know the market: Don’t assume “if you build it, they will come”. Know your market. Are small spaces in the neighborhood being snatched up? Or is there pent up demand for larger retail spaces? This will inform how you market and divide the space.
Talk to commercial brokers: Brokers will have insight into which spaces are moving and which aren’t. They may be able to pinpoint the retail categories that need space, informing your final design. For instance, if there is a need for restaurants, you may want to incorporate venting into the design. Doing it after the fact is often cost-prohibitive.
Take care with architect selection: Select an architect with a track record of designing commercial spaces that have been successfully leased. They will know how to address things like ceiling heights, loading/unloading zones, signage, and the need for storage and office space, etc.
If the market can’t support retail, don’t force it: Consider other uses for the space, including services like medical offices, day care, etc.
Consider pre-leasing: Talk to retailers during the design process, and allow them to help customize the space for their needs if they sign a pre-lease. And better yet, a pre-leased space, or at the very least, strong stated interest from a potential tenant can making financing easier to obtain.

A little advance planning can reap significant rewards. A space that is leased quickly provides cash flow, enhances real estate value, and helps invigorate a street – a win-win for everyone!

News Roundup: August 3, 2011

2011-08-03T11:42:00.000-04:00

"SD Council OKs revised payment plan for business districts" [La Jolla Light, 8/1]
The [San Diego] City Council voted to change the way money is distributed to Business Improvement Districts. The city had previosly collected assessments directly, but now the assessments will go straight to each BID, which will have to file reports to the city on their expenditures.

"Mobile market brings fresh produce to to ‘food deserts’" [Kansas City Star, 8/2]
The absence of a grocery store (the nearest is almost 2 miles away) and the lack of public transportation have left seniors in the Argentine neighborhood without easy access to fresh food. The Beans & Greens Mobile Market is filling the gap.

"Project to make area around Performing Arts Center stroll-worthy" [Kansas City Star, 8/1]
A new performing arts center in downtown is the catalyst for a set of downtown improvements aimed at encouraing a pedestrian-friendly atmosphere.

"Riders Will Race for Cash at First Birmingham Bike Festival " [Birmingham Patch, 7/26]
The first such event organized by the Principal Downtown Shopping District will award cash prizes to cyclists and downtown.

A Storefront Signage Program that Works

2011-08-03T10:24:00.000-04:00

A recent trip with the Coro Neighborhood Leadership participants (a leadership training program for commercial district management professionals) to Atlantic Avenue in downtown Brooklyn was a wonderful demonstration of what small investments can do. The Atlantic Avenue Betterment Association, a non-profit organization comprised of local merchants, residents and property owners, has been quietly working to improve a busy stretch of Atlantic Avenue, a four-lane thoroughfare, and turn it into a more inviting, pedestrian friendly place. With limited resources (they are forming a Business Improvement District to ensure sustainability of their efforts), and the support of local stakeholders, they have made tremendous inroads. One program is the storefront signage program. Small grants of about $2,500 are given to new businesses who put up vertical blade signs. The new shop signs were made possible by a grant from their local State Senator Velmanette Montgomery. As you can see, this well designed signage is intended for pedestrians. As you walk down the street, the signage helps project the store's brand and functions like a magnet, attracting pedestrians further down the street with promises of more stores and window shopping.

Seven Ways Anchor Institutions Can Support Commercial Revitalization, Courtesy of ICIC

2011-07-27T12:41:00.000-04:00

Wesleyan University was a major investor at the Inn at Middletown,
which involved the rehab of an old armory building right on Main St.

Local communities often struggle to find resources to advance their commercial revitalization efforts. Engaging property and business owners is obviously a first step, but it can sometimes be easy to overlook other stakeholders in a community. Universities are often seen as partners in this effort, as we have written about on this blog a number of times before [click here for previous posts], but increasingly, health care and cultural institutions are also playing a role in community building. Yet by and large they remain an untapped resource for revitalization.

Anchors are a good example of “sticky capital”, their looming physical presence and investment in built facilities means they are literally anchored in the community. They may be so focused on their primary mission, that they may not even realize the benefits that accrue to them from improvements to the surrounding neighborhood. In some communities, rather than engage in community efforts, they have done just the opposite. They have instead built fences around their properties, concentrated retail and services on-site, effectively isolating themselves. In communities with high crime rates and public safety challenges, this can be seen as the easy way out. I recall a tour of the Ivy City neighborhood in northeast D.C when I worked for LISC. Ivy City is a community with its fair share of public safety challenges. Looming large over the neighborhood was Galludet Univesity, with its tall fences and closed campus. The distinct 'them vs. us' attitude was mentioned again and again by community residents who were frustrated by the lack of meaningful engagement from the university.

Last week, I had the opportunity to hear Mary Leonard, President and CEO of the Initiative for a Competitive Inner City, speak at the City of New York’s Annual Business Improvement District (BID) Conference. ICIC, founded in 1994 by Harvard Business School Professor Michael Porter, has been analyzing the impact of anchor institutions on urban economic development. They have come up with a framework for the role of anchors in community revitalization. While the most obvious contribution that an anchor can make is money, Mary Kay laid out a framework for the role of anchors that goes much further and suggests seven ways in which anchors can participate in community building. With full credit to ICIC, and peppered with my own examples culled from my own experience, I offer this framework to readers interested in a comprehensive set of options for the ways in which local anchor institutions can have a more significant impact on their commercial revitalization efforts. [For a more detailed look at the ICIC framework click here]

Core Products or Services – This refers to the contribution that an anchor makes based on their area of expertise. If the anchor is a university, students might be tapped to do research or service. If the anchor is a health organization, they might provide free health screening to area residents. If the anchor is a cultural institution, they can contribute enhanced programming that draws visitors to the district. Vassar College, for instance, runs a field work program that provides students with academic credit and a stipend to intern with local community organizations and government agencies.
Real Estate Developer – Anchor institutions can use their real estate investments to either turn their back on the local community or to build linkages to the district. Pratt University, in Brooklyn, NY recently unveiled a 120,000-square-foot, $54 million six-story building that houses administrative offices, galleries and classrooms right on Myrtle Avenue – a district that has benefitted significantly from Pratt’s active engagement. [For more on the Myrtle Avenue story, click here]. Another good example is Wesleyan University in Middletown, CT. Wesleyan was a lead participant and investor in the building of the Inn at Middletown. The hotel, located in a restored armory on Main Street, was once a blight on the district. Today the building and its guests are a stabilizing force that helps drive retail sales in the district.
Purchaser – The purchasing power of anchors can be directed to local businesses and suppliers. Communities can work closely with the anchor to identify local businesses, set up local purchasing goals, and offer incentives to help them to meet these goals.
Employer – I was shocked when Mary Kay mentioned that 2/3 of hospital and 1/3 of university employees only need associate degrees. There are clearly untapped opportunities, particular in lower income communities, to establish connections to residents through screening, training and referral. These jobs help stabilize a neighborhood by building wealth among local residents, building buying power for local businesses in the process.
Workforce Developer – Anchors can work closely with other community stakeholders, particularly universities, in identifying gaps and training local residents for jobs in the future.
Cluster Anchor – Anchors can collaborate with other organizations to incubate new businesses that simultaneously provide needed services and also fill local retail space. Hospitals are an excellent example of this trend. You often see complimentary retail and services in the vicinity of a hospital – and a hospital can help build demand for these services by encouraging patients and staff to patronize these local businesses.
Community Infrastructure Builder – There are many ways in which an anchor can help build local infrastructure. For example, ICIC notes that Yale University provides a subsidy for faculty and staff to buy homes in New Haven. While a student at Wesleyan University, In Middletown, Connecticut, I worked closely with the City planning office to apply for a competitive Connecticut Main Street program grant for technical assistance from the National Main Street Center. Our successful application counted on the support of seven organizations that contributed $10,000/year for three years to fund a Main Street program, one of which was the University. This effort eventually led to the formation of a Business Improvement District.

I could hang dozens of wonderful examples onto this framework, and I'm sure our readers could too. It is an excellent starting point that pushes us to think more creatively about how to engage anchor institutions beyond asking for a blank check. These options inevitably result in deeper, more lasting relationships that simultaneously benefit the district and the anchor over time.

It’s lunch time! Why office workers avoid sit-down restaurants, and what you can do about it

2011-07-26T11:14:00.000-04:00

Office workers need convenience and proximity. They will not walk more than a few minutes to grab lunch, and even then, every minute counts. Here are some findings from a 2004 study completed by the International Council of Shopping Centers that support these conclusions:

Office workers eat out, a lot. Approximately eight in ten office workers purchased their lunch outside their office at least once a week.
Office workers choose carry out with significant frequency. 47% of office workers visit carry-out lunch destinations, like delis, grocery stores, and sandwich shops.
Office workers need a quick turnaround. The 'lunch hour' is a thing of the past. Office workers now spend an average of 41 minutes away from the office for lunch. In fact, 40% take only 30 minutes or less for lunch. So if your local lunch destinations do not allow for a quick turnaround, office workers will take their business elsewhere.
Office workers prefer to walk to lunch. Nine in ten office workers usually walk to lunch when the local options exist. If they do not, office workers will bring their lunch from home or hop in the car if that is an option.

What this means is that proximity, convenience and a quick turnaround time are key if a business expects to office workers to patronize them during lunch. So ask yourself, do your sit-down restaurants have a express lunch specials? Is their service speedy and responsive to patrons who have limited time to eat? Do they have a dedicated and short lunch menu that makes decision making simple and fast? These minor offerings can make or break their ability to meet the needs of the lunchtime crowd.

At the end of the day, proximity to office workers can end up being a life or death situation for local lunch destinations. A distance of 100 ft can be just a smidge too far, or a location across a busy street that takes too long to cross. These minor barriers can make a major difference between success and failure with the lunch crowd.

Debate: Two Communities, Two Opposing Positions on Downtown Infrastructure Investment

2011-07-19T13:17:00.000-04:00

CON: “I am not going to spend down our reserves especially in a time when we don’t know what the economy is going to bring.”

[Los Alamitos Puts the Brakes on Downtown Revitalization, Los Alamitos-SealBeach Patch, 7/19]

When funding gets cut for planning and outreach, downtown infrastructure projects can come to a grinding halt, as is the case in Los Alamitos, CA, where a concept design for a $2.5 million dollar downtown streetscape improvement project was recently put on hold.

We often say that planning is an excellent thing to do in a down economy, so that when the economy gets better and resources become available, projects are ready to go. But sometimes realpolitik intervenes and despite an organization's best efforts, finding the resources, even just for planning, can be a challenge.

PRO: “The city is getting significant value for our investment in terms of parking, public spaces, the future expansion for the museum”

[Proposal: Palm Springs to pay $43M in Desert Fashion Plaza mall project, Mydesert.com, 7/19]

In contrast to Los Alamitos, Palm Springs, CA is contemplating committing $11 million dollars for new street construction and parking facilities improvements (an additional $32 million will be held in escrow for other project related costs) as part of a revamping of a single-owner shopping center called Desert Fashion Plaza. Voters will be asked to approve a 1% sales tax increase. The City argues that the investment would result in $600,000 in additional property taxes annually.

MY TAKE:
I'm not quite sure that investment in a single-owner downtown shopping center is necessarily the best alternative, but I do find it interesting that these two communities lie on opposite ends of the investment spectrum, each conducting a very different calculus resulting in two different outcomes.

In most cases I do believe that failure to invest is shortsighted. But the cost-benefit analysis of any particularly investment must be measured accurately so that scarce resources can be allocated appropriately and with full disclosure. That said, without investment in downtown infrastructure and improvements to the public realm, a community can end up digging its downtown into a deeper and deeper hole of disinvestment that is difficult to crawl out of, even when the economy gets better. As the competition for scarce consumer dollars gets stiffer, competitive districts and more controlled shopping environments (like the mall), benefit as consumers choose places that look and feel better. These alternative shopping venues are cleaner, safer, and managed in a way that better meets customers needs. The dangers of long-term disinvestment are very real, and ultimately affect the tax base, not to mention puts small businesses at risk over the long-run.

So here are my questions for our readers...is downtown investment the right thing to do in a down economy? And if so, under what conditions? And how do you sell this investment in a challenging political environment?

Giving a new meaning to "Paint the Town Red"

2011-07-11T17:20:00.000-04:00

Murals are a wonderful way to bring life to downtown. In Philadelphia, the Mural Arts Program is also credited with increasing sales within the business districts where they are located. How's that for impact! In Great Falls, Montana, the Business Improvement District is paying for supplies for 10 artists to create murals on the dilapidated building and enhance the appearance of downtown. This is a relatively easy idea that harnesses the skills and talent of local artists.

Here are two recent articles on the BIDs efforts:

Temporary murals light up 'blights' in downtown Great Falls [Great Fall Tribune, 7/11/11]
Artists Legally Paint Downtown Eyesore to Create a Masterpiece [www.kfbb.com, 7/11/11]

Definitive evidence on what works to revitalize urban commercial corridors

2011-07-11T12:02:00.000-04:00

I am excited to see this research getting more attention. I recently wrote a white paper for the Institute for Comprehensive Community Development, which was recently posted on their website. Here is a preview.

***

If they work well, neighborhood commercial corridors make an important contribution to community quality-of-life, particularly in pedestrian and transit-dependent lower-income neighborhoods. Yet in many lower-income neighborhoods, these corridors don’t work well at all, which is why community developers have for years designed and carried out programs to revitalize these areas.
In 2006, Philadelphia LISC, in partnership with the William Penn Foundation and the City of Philadelphia, engaged Econsult Corporation, an economic consulting and research firm, to assess the performance Philadelphia’s commercial corridors, and identify those factors shown to improve them. Using extensive collection of very high-quality data and use of powerful econometric statistics, Econsult researchers have produced the most convincing evidence yet that the right kind of investments, including those typical of community-based revitalization efforts, can indeed improve corridor performance.

The bottom line: practitioners should focus on improving district fundamentals – store density and retail mix – through investments to identify and support district leadership, create business improvement and other corridor management districts, improve area attractiveness, and increase security. No surprises here to community development veterans, but the Econsult researchers have now backed anecdote with solid numbers.

For the entire white paper and the original post by the Institute for Comprehensive Community Development, click here: http://www.instituteccd.org/case-studies/2519.

When Good (Food) Events Go Bad

2011-06-27T16:36:00.000-04:00

Having spent a few years planning and executing a local 'taste of' event in my own neighborhood, I know how challenging these things are to get right. Small restaurants often don't have the capacity to staff the event and keep their doors open at the same time. Successful restaurants don't need you - and can quick to show you the door if you haven't developed long-standing relationships over time. Add to that the challenges of keeping volunteers from burning out over time (that one I know from personal experience!), and you can easily see why these events start with a bang, but can fizzle quickly.

In New York, we have the 'Vendy Awards', a non-profit event that aims to recognize New York's best street vendors. As Amy Kantrowitz, two-time managing director of the Vendy's notes in an interview on American Express' Open Forum, three things can go wrong: failing to deliver on your promise; making people wait on long lines; and not having enough food. This article talks about the basics of getting a food event right, starting with setting expectations and setting prices that reflect those expectations. She also talks about the details of event planning and volunteer recruitment. Given the fact that restaurants often form a vital niche for so many urban commercial districts, getting a food event right is even more critical!

How will the "Mature Market" Affect Downtown?

2011-06-27T14:34:00.000-04:00

As baby boomers mature, retailers are getting smart to their changing needs. [Read Derek Dunam's post: On The Retail Level: For The Aging Boomer, Smaller Can Sometimes Be Better]. What this means is that all the hype around small format stores isn't just good news for city folks, it is also good news for seniors. Simply put, smaller stores mean less need for walking - something that maturing market will increasingly come to appreciate. In fact, one German retailer has gone so far as to add "non-slip floors, extra-wide aisles and checkouts, bright overhead lighting, shelves fitted with steps and magnifying glasses, talking produce scales, and light, easy-to-maneuver carts fitted with adult-size seats."

So, will urban commercial districts also benefit from the growing mature market? Will the compact nature of these districts, including smaller store size and walkability help build stronger markets for traditional downtowns?

How important is pedestrian traffic to a business?

2011-06-27T10:56:00.001-04:00

Southhampton, NY

A recent New York Times article [Hamptons Hope for an End to the Seasonal Store] speaks to the challenges facing businesses in the wealthy communities known as 'The Hamptons' on Long Island - a place overrun in the summers with wealthy visitors renting or visiting their vacation homes. While not every community compares to the Hamptons, the article discusses the factors that affect where people walk and how late they stroll, and ultimately underscores the importance of foot traffic in meeting sales figures and setting leasehold rates. Any reader familiar with urban planning theory will also note that none of this is new, just new examples that are playing themselves out in real time.

District's benefit from an entertainment anchor that drives retail traffic: In East Hampton, "stores benefit from having a movie theatre in the center of Main Street's business district". On the other hand, in Southhampton, "the movie theater is on the edge of town". The difference in what landlords can charge in rent is ultimately based on what retailers can expect to sell, and higher foot traffic means higher sales. So in East Hampton, rents range from $110 - 140 per square foot, but in South Hampton, they are closer to $70-75 per square foot. A significant difference for any retailer, but of course the assumption is that more foot traffic brings higher sales - so the business can support a higher rental rate.
Sidewalk dining activates the street and attracts more people. Another point made was the fact that Southhampton rejuvenated "its commercial strip by allowing restaurant owners to put tables on the sidewalks, keeping the town lively even after sunset." Activity breeds activity, and the act of enlivening the sidewalk draws even more foot traffic. A colleague of mine runs a small Business Improvement District in one of New York's highest density tourist districts - but he has found that visitors do not often walk through his district, despite the fact that they walk past it. Why aren't they turning the corner to walk down his street? Part of the problem is that when they look down the street, they don't get a sense that it is worth their while. They can't see signs for many of the businesses - the signs lay flat against the building rather than protruding out (these vertical signs are known as "blade signs"). He is also working with City Planning to allow for sidewalk cafes that will activate the street, much as Southhampton has done successfully.
Is 100 yards is too far to walk? One business owner in the article mentions that they moved their store location 100 yards, and noticed a considerable drop in foot traffic. He says "it's only 100 yards, but it's literately night and day for us." Take a micro-look at your district. Does your retail change from block to block? Is there a significant drop in pedestrian traffic from one street to the next? As you think through your retail environment, keep in mind that the micro-dynamics of your district will play a major role in the success or failure of your neighborhood businesses.
Helping businesses buy their properties helps buffer smaller businesses from rent increases, particularly in 'hot' neighborhoods. As an owner in Bridgehampton notes, he would have been unable to afford the rents if he had not bought his building when he opened the business in 1982. Helping businesses buy their properties is an excellent way to ensure they are able to withstand the real estate pressures associates with neighborhood improvement. An in the event that they choose to close their stores, they have built equity overtime - a win-win for all.

Do you know your 'district orientation'? If not, here's why it matters...

2011-06-15T16:54:00.000-04:00

I am often called upon to help communities develop revitalization strategies for their downtowns - and the most common question I get asked is "how do we know what to do first?" What may have been the right set of first steps for one community, may not work in another, so it's sometimes hard to figure out how to prioritize your efforts and resources.

A professor from my days at MIT, Karl Seidman, is an author of a number of publications on urban commercial district revitalization strategies that offers a framework I find useful in my work. Karl starts by helping to unpack the question of “what kinds of intervention makes sense and when?” His field research on seven “urban” Main Street programs in three cities (Revitalizing Commerce for America's Cities) found that districts often fall into four ‘orientations’ depending on where each district is in its implementation efforts. If you can figure out your district orientation, you have a better chance of figuring out what kinds of activities you should take on first, second and third.

These orientations are useful because they help us avoid a far too common mistake made by practitioners: the tendency to apply known, familiar solutions to new challenges that require adaptive solutions. (For district managers in the Coro Neighborhood Leadership Program, this will sound very familiar!). What I mean is this - what typically happens is that a BID hires someone with a background in say, marketing, and all of a sudden all of the BID's activities are oriented towards marketing, whether or not these are right solutions to the problems at hand. Or the BID hires someone who really know real estate development, and lo and behold, all of the 'right' solutions for the district become about real estate. It is important to first take a step back and figure out what kind of district you are so that you can apply the right set of solutions to the challenges you face, rather than simply apply the only set of solutions you may be familiar with.

So with that, I offer Siedman’s framework below, with one exception - the addition of a ‘clean-and-safe-oriented district’. This additional category recognizes the critical contribution that neighborhood safety plays in neighborhood commercial district stabilization.

Development-oriented districts are areas in need of significant investment in physical improvements. There are often numerous vacant buildings and sites in need of development. Buildings and infrastructure have deteriorated overtime, and private investment is unlikely because few see opportunity for return without some form of public subsidy. Marketing and promotion cannot occur until the market is more stable and there is something of substance to market and promote.
Organization-oriented districts need help getting started. There is limited administrative capacity to take on any initiatives – and no established consensus around where to start or who will lead the initiative. These areas may have cultural or language barriers that make achieving consensus a challenge or they may suffer from ‘planning malaise’ or lack of leadership.
Promotion-oriented districts start from a position of relative strength. They may have clusters of strong existing businesses that are struggling to remain relevant in the face of neighborhood change. These districts need help growing the customer base, which may have changed or diminished over time. Retention-oriented districts often share many of the same attributes.
Retention-oriented districts typically have occupied buildings and few vacant sites. In these districts, the challenge is ensuring that the existing businesses benefit from development and escalating rents that often mark neighborhood change. These districts focus on providing resources and services to existing businesses. Promotion-oriented districts often share many of the same attributes.
Clean-and-safe-oriented districts struggle to manage the perception and/or reality of crime, which hurts local businesses in their efforts to attract customers. This challenge undermines nearly every effort to improve the district. Reducing crime and improving perceived safety is critical to neighborhood can often serves as the primary catalyst for change and engagement from residents and businesses alike.

So which district orientation are you??

Five Reasons Why Business Improvement Districts are Good Public Policy

2011-06-15T13:27:00.000-04:00

These days, it seems that Business Improvement Districts (BIDs) are increasingly under attack. While I can only speak anecdotally, I continue to come across communities facing challenges to BID formation, challenges that would have seemed unlikely just a few years ago.

It stands to reason that in the current economic climate, BID formation inevitably slows down as property and business owners express justifiable concern about their bottom line. Yet a wholesale rejection of BIDs is a short-sighted effort to staunch losses that only results in a deeper hole by reducing the resources available to stabilize and enhance downtown communities. Like any asset, downtown requires on-going improvements and investments to compete against newer, shinier shopping environments. Moreover, consumers continue to keep close track of discretionary spending, which means more competition for fewer dollars. It is precisely this cut-throat competitive environment that makes BIDs an extremely valuable tool for downtown in their efforts to attract shoppers.

Here are five reasons why BIDs remain a good option for downtown revitalization.

1. BIDs leverage additional monies for commercial district revitalization. BID staff become advocates for their districts, able to make compelling arguments on behalf of business and property owners for additional investment. They often set the stage for investment by doing the planning and consensus building often needed to attract public funding. 'Shovel-ready' projects that have public support are in the best position to attract limited public dollars. BIDs can also submit grant proposals, and the BID structure allows for the receipt and distribution of grant dollars that otherwise might go to other communities.

2. BIDs provide a mechanism for collaboration by local merchants. BIDs provide a valuable forum for merchants and property owners to discuss ways to work together more closely for their mutual benefit. Collaborative marketing and district-wide events are mainstays of many BID programs - and good marketing can only happen with the input of local business owners.

3. BIDs help stabilize and can help increase property values. And don't just take my word for it. In 2006, Philadelphia LISC and the William Penn foundation funded an econometric study of 265 commercial corridors in Philadelphia. The goal was to provide a quantifiable measure of the impact of various activities on the commercial district environment. The findings provide hard data to support the conclusion that BIDs are good for property values. What they found was that there was a consistent and strong relationship between real estate values and the formation of BIDs. In fact, a well managed corridor is a positive amenity, resulting in up to a 30% price premium for properties located within the district.

4. BIDs help drive overall retail sales for the district and retail sales growth for individual businesses. Another finding from the 2006 LISC/Penn study was the "strong relationship" between BIDs and retail sales for both the district and individual businesses as compared to districts without BIDs.

5. BIDs prevent the the free-rider syndrome. Downtowns are unlike single-owner shopping centers. In shopping centers, businesses pay Common Area Maintenance (CAM) charges for things like security, maintenance and upgrades overtime. This mandatory charge ensures that every beneficiary contributes contributes. As we know, many property owners, acting independently and in their own self-interest, often choose to forgo common contributions anticipating that their neighborhoods will pick up their slack - this is the quintessential 'free-rider' problem which can be avoided under the BID structure.

While BIDs are certainly not the panacea for all downtown ills, they provide a structure that is critical to both on-going management and accountability from all sectors. Even when times are bad - and perhaps particularly when times are bad - we cannot ignore the need for management and investment in our downtowns.

Five Tips to Designing a Great Facade Grant Program

2011-05-23T13:16:00.000-04:00

Façade programs are popular in part because they provide immediate and substantial impact that is visible to the public. As effective as these programs are, the field is littered with façade programs that are poorly designed and therefore go underused. The literature suggests that effective façade improvement programs include some or all of the following characteristics:

Be sure you are providing at least a 50 – 75% match - the higher match is necessary in districts where business owners are struggling and may lack the capital necessary to meet their match requirements.
Because most public programs are set us a reimbursements - it can sometimes be difficult to get facade money out the door. Property owners simply do not have the capital necessary to front the entire cost of the renovation and then wait to be reimbursed after the fact. In cases like this, patient capital is critical. A bridge loan or revolving loan program can help to address the lack of capital for property owners unable to front renovation costs. Non-profit lenders and community development intermediaries might be good partners in exploring these kinds of loan products.
If there are significant reporting requirements that cannot be simplified, the match has to be significant enough to make the application and paperwork worth it. Otherwise, most business owners won‘t want to deal with the hassle. The amount considered significant will differ by community, but the literature suggests anything form $25 – 50k is generally sufficient. And the smaller the individual grant, the easier they should be to use (read: minimal paperwork!)
If there are vague or no design guidelines, the program should include pro-bono or low-bono design services. When improvements go unsupervised are lack some sort of quality review, it can be difficult to determine when and where façade improvement dollars were used, rendering the overall impact on the shopping district negligible.

Blade signs along Atlantic Avenue in downtown Brooklyn, NY,
funded by micro-grants to local businesses

If funding is limited, consider micro-loan programs for signage only. For $2,500 - $5,000, you can fund attractive signs that make a significant difference to the overall look and feel of the district. I just love these blade signs along Atlantic Avenue in Brooklyn (see photo above). The local merchants association provided microgrants to businesses for these wonderful blade signs. Pedestrian can easily tell what stores there are from a distance - and they look great!

The Miracle of Union Square

2011-05-11T15:06:00.000-04:00

Union Square is one of New York's most renown neighborhoods. Known for it's amazing selection of restaurants and an increasingly diverse set of shopping options. It is a destination for foodies eager to taste delectables from the Union Square Greenmarket - one of the city's first farmer's markets.

It wasn't always that way. When now NYC Department of Small Businesses Commissioner Rob Walsh took the helm of what is now the Union Square Partnership over twenty years ago - the area was better known as 'needle park' - and a place to be avoided. What happened next is an inspirational story about community leadership, the importance of relationships, and the value of persistence. But let me not get ahead of myself. I was fortunate to moderate an amazing panel last week that was basically a conversation between Rob Walsh and Jonathan Fanton. Fanton is the former president of the John D. and Catherine T. MacArthur Foundation (i.e. the organization that anoints those 'genius fellowships'). Before his tenure at MacArthur, he was President of the New School University in New York City, a major institution in the Union Square neighborhood. It was in that capacity that he served on the Board of the Partnership. It was a pleasure to hear these two talk about their history and success in turning around Union Square.

Commissioner Walsh was kind enough to share his 'key lessons' from that experience with a group of Coro Neighborhood Leadership participants - most of whom run Business Improvement Districts in New York. So with credit to the commissioner, I'd like to share my own take on his key lessons with a broader audience.

Connect with anchor institutions - in the case of Union Square, it was the New School. In your community that institution might be a local hospital, or a major non-profit service provider. Take a moment to think about who your stakeholders are and invite them to the table. The Commissioner made it clear that sometimes you need to ask frequently and often before getting them to say yes, years even.
Embrace strong leadership and vision - it's easy to work on the tactical, but it's the long term vision needs to serve as the guide for those tactics.
Stabilize your neighborhood - very little can happen if your neighborhood is not safe and clean. If you need to focus your initial efforts on making this happen, that is probably the best use of your time and resources. If visitors don't feel safe, your other efforts have little chance of succeeding.
Make it memorable - once you've stabilized your neighborhood, work on making it an interesting and exciting place to visit and spend time.
Build your community - leadership and community engagement are also important to the revitalization effort. In Union Square, their efforts to improve the district also included efforts to improve the local public high school.
Build your brand - I started this blog off by talking about how everyone now knows Union Square as a culinary destination. That was part happenstance, but it was also by design. Today the Union Square Partnership puts on events that build this brand, including "Harvest in the Square", a tasting event that brings together the area's best restaurants.

To those who started this process so many year's ago - kudos!

Getting Commercial Brokers on Your Side

2011-05-10T15:22:00.000-04:00

Not every community has an active commercial brokerage community. In some communities, property values and rental rates are so low that the brokerage community might be nonexistent. There just isn't enough value to justify putting the time into making a deal. In these cases, the only way to drum up retail prospects and fill vacancies may be for district managers to actively prospect for new retail themselves. That includes working with property owners and showing retail spaces to prospective tenants of YOUR choosing. But more on that another time...

This post is not for the district manager who has no brokers to work with. This post is for those district managers who have a decent brokerage community and need to figure out ways to harness that community for the benefit of the district. The first step is to understand how commercial brokers work. There are two kinds of commercial brokers. There are those that work for property owners in search of tenants, and then there are those that represent tenants looking for space. And of course, there are brokers who do a little bit of both - but let's keep it simple. Your job as a district manager is not to meddle with this system - the last thing you want to do is be perceived as competition to your local brokers. Instead, you want to make sure they see you as a partner in their efforts, rather than competition for clients. So here are a few pointers:

Make it easy: brokers get paid when the deal is done, regardless of whether the lease is signed by a check cashing agency, or a cute boutique. If the property owner doesn't care who rents a space, then neither will the broker. So half of your job is to make it easy for the broker by providing leads for businesses that YOU want in the district. If you stumble across a retailers or restaurant that you think would be a great addition to your district, talk to the owner, ask them about their expansion plans, and then offer them a tour of your district. Coordinate that visit with local brokers so that the owner can see as many spaces of possible that fit his or her criteria.
Map your district: Brokers like maps. Retailers like maps. Create a compelling map of your district that shows where all the major traffic generators are. By traffic I mean PEOPLE. What major businesses or venues attract people? Are there hotels or offices that attract visitors or employees? Is there a Post Office or Library that brings people to the district. Take the time to map - and if possible - estimate how many visitors go to that destination a year. While you are at it, include major retailers and their logos on your map.
Market your district by telling a 'market data-based' story: Brokers market their spaces very well. They create 'sell-sheets' that provide basic information about the retail space. What they often don't have is very compelling district marketing material. In this day and age, this doesn't need to be printed en mass, you can print marketing material as you need it, or better yet, create a nice PDF that includes your district map, some compelling market data, and a clear statement describing the kinds of retail that you want and need.
Keep a prospect list, grow it and selectively share it: Make your prospect list a resource that is available to brokers when they need it. Over time (and these things do take time to build) identify a wish-list of local retailers - sometimes the best place to find these are other similarly situated districts), include contact information and site selection criteria. If brokers know you are keeping this list, you will be their first stop when they sign a client and start prospecting for tenants.
Know your market better than the brokers do: Collecting market data is all well and good, but the problem is that most market data is based on census data - which only tells the residential story. If your district includes a significant number of visitors or daytime employee, gathering information about the customer quickly becomes cost prohibitive for any individual broker to compile for any individual site. A better thing to do is to commission a detailed consumer survey at least every few years. Use this survey to collect information about where your visitors and employees work and live, how much they spend, where they shop and what other retail and restaurants they would like in the district. Turn this survey data into a report that can be distributed to the brokerage community - and include tidbits that help you build your story in your marketing material.
Develop relationships with your brokers: The world is built on relationships. Keeping up with your brokers and property owners will ensure that you have the inside scoop, and can ultimately help influence, their tenant decisions. But this only happens when you have developed a trusting relationship over time and they have come to value your judgement.

By serving as a repository of useful information, and a source of easy leads and deals, you will transform your brokerage community from a force that works against your district vision to something that helps advance your district vision.

Tsotchkes Galore

2011-05-04T15:25:00.001-04:00

Some random BID marketing tsotchkes

I love free marketing gear, don't get me wrong. I'll take a free t-shirt (ladies size please!) or pen anyday, but sometimes you have to wonder what kind of marketing tsotchkes really make sense, particularly these days when every marketing dollar matters. The image to the right shows two interesting examples of free marketing goods distributed by two seperate BID's in New York.

So, does a maraca really make you want to shop in the Fashion District? To be fair, the Fashion District BID also distributes cute little tape measures. Now the tape measures make alot of sense, but maracas? They might be a good choice for Mexicotown in Detroit, where a maraca would be in line with the district's identity, but in New York's uber stylish Fashion District? I'm not so sure.

And what about the jar opener? I could see that thing falling to the bottom of my utensil drawer and never seeing the light of day again. So before you spend any of your precious marketing dollars on useless tsotchkes, think about how they reflect your district's brand and identity and whether they will really drive retail traffic to your district before you buy.

What the strangest (or best) free marketing goods you've come by?

Boston welcomes it's first Business Improvement District

2011-05-04T15:03:00.001-04:00

After a bruising battle that the saw a number of downtown property owners 'opt-out' of paying the BID assessment (Massachusetts is the only state to include a 30 day opt-out period in its BID enabling legislation), it seems the organization is ready to get on its feet and celebrate the inaugural season.

The BID collects approximately $3 million in annual fees from commercial property owners and most of the funding is going towards supplementing existing city services, keeping the district clean and safe, and helping drive downtown traffic through event marketing. This summer the BID will host a summer series called Stepping Up Downtown!.

As BIDs continue to face scrutiny nationwide, the success of Boston's first BID will likely help determine whether other areas of the City will follow suit. Only time will tell - but we wish them the best!

How to screw up event marketing

2011-05-02T10:50:00.000-04:00

What happens when your district is not generating foot traffic to sustain your existing retailers? The impact is twofold: 1) your existing businesses struggle, and 2) you also have a heck of a time attracting new retailers to your district. When retailers visit a district and they see vacancies and struggling stores, all they see is risk. Retailers are like sheep. They like to follow other retailers, and in their mind there is nothing riskier than opening in a district where every other store is struggling.

For districts that are challenged, traditional advertising in form of newspaper ads is often not effective, because really, if you have a poor selection of stores, what are you going to market in the first place? Your goal should instead be to have an impact on existing stores and generate traffic, and ultimately RETAIL SALES. The only way to do this is with "event marketing". Event marketing is about planning and executing specific shows that bring people into the district on a regular basis. The goal is to ensure that visitors end up shopping in some of the stores.

This sounds simple, but you would be surprised. I have visited too many communities that miss the rationale of event marketing. Instead, they stage their events a distance away from their stores. The logic seems right at the time - they've got a great public park or open space a block or two from the district, so why not use it? The problem is that the stores do not benefit if shoppers are not in a businesses line of sight. Because a store that is out of sight is also out of mind. No wonder the businesses were griping about paying assessments to their business improvement district - they never seemed to benefit from the efforts of the BID!

Communicating the benefits of an Improvement District

2011-04-05T11:19:00.000-04:00

Forming a new Business Improvement District (BID) can sometimes be a long slogging uphill battle where District advocates devote countless unpaid hours in conversations with businesses and property owners to gain their input and approval. Building support for an Improvement District often means educating stakeholders on the benefits of the District and ensuring that all District advocates have a clear and concise set of talking points to use during outreach and when speaking to the press. Think of this like a political campaign - develop a set of talking points that everyone uses and stick to the script!

Below are a set of suggestions for how to go about introducing and educating your local stakeholders on the benefits of an Improvement District.

1. START BY DEFINING THE BID AND PROVIDING A FAMILIAR EXAMPLE OF SIMILAR ORGANIZATIONAL STRUCTURES
Not everyone knows what an Improvement District is, so put it in context. Here are a few examples.

Define a BID. A BID is an organization of property owners within a prescribed area who assess themselves to raise money for services and improvements that enhance business profitability and property values.

Compare a BID to something they know. There are two options here. For residents, you can suggest that BID’s are similar to a Home Owners Association, whose fees are used to maintain the appearance of common area assets in order to maintain property values. For other audiences, you might say that BID’s are similar to Shopping Mall Common Area Maintenance (CAM) charges. CAM charges are used to maintain and enhance the shopping environment for the benefit of businesses in the center and to ensure the value of the asset over time for the owner.

2. MAKE SURE THEY KNOW THAT THE ASSESSMENT IS AN INVESTMENT IN SERVICES AND IMPROVEMENTS THAT EVERYONE AGREES ARE NECESSARY

Communicate the need to maintain and enhance the district. In some districts where imminent decline is a concern, you can share your belief that a failure to invest now in improvements to the district puts property owners and businesses at even greater risk for disinvestment and falling property values.

Communicate that the BID is a mechanism by which more funds can be leveraged. Professional staff in place mean that someone is able to apply for additional grants and advocate for additional funds, both public and private.

3. SHARE BID FACTS....here are a few....

There are over 1,500 BIDs throughout the United States and counting.
The problem with voluntary groups is that there is often a 'free rider' problem. A mandatory assessment ensures that everyone is required to contribute, keeping contributions modest and fair.

4. ....AND DON'T FORGET TO MENTION A LOCAL SUCCESS STORIES

This story will differ by community, but find a local example of a similar district that will resonate with your audience. Arrange for a site visit and tour if possible.

5. BE CLEAR ABOUT THE COSTS.

In many cases, the assessment per property owner is modest. Breakdown the cost by month or day, and compare it to the return on investment should their property value increase incrementally.

6. MAKE SURE YOUR BID SERVICES ARE CUSTOMIZED TO YOUR DISTRICT NEEDS

The most effective BID's have developed a set of services and improvements that result from a consensus achieved through significant outreach, including focus groups, interviews, and surveys that allow for input from business owners, government officials and property owners. If you have done your homework, selling the BID services package will be more about telling people what they already want to hear.

Legislative Challenges to Special Improvement Districts in New Jersey

2011-04-05T10:45:00.000-04:00

Improvement Districts (BIDs, SIDs, SSAs, etc) are seeing challenges in New Jersey, where a new bill [A-3859] has been proposed that would require the reauthorization of a special improvement district (SID), every ten years by the majority of affected property owners. According to a legislative update from the New Jersey Managed Districts Association, the bill was amended on the floor of the Assembly and will be posted again for a vote by the full Assembly at its next voting session sometime in May. The bill in its original form would make it easy to dissolve SIDs by effectively counting absentee ballots as 'no' votes. The ammendments to the bill, offered in the last legislative session, address this issue, but also shorten the reapproval timeframe to 5 years from 10 years.

For more information see: Legislative Alert, New Jersey League of Municipalities [3/11]

The "Small Box" Trend Requires Some Rethinking

2011-04-04T13:32:00.000-04:00

It's exciting to see more and more news covering what I call the "Big Box to Small Box" trend. ["Big-Box Giants Downsize to Drive Productivity with Smaller, Urban Stores"; Retail Traffic, 3/30]. Clearly retailers are getting over what they once considered major obstacles to investing in urban markets. A 2004 survey by the International Council of Shopping Centers and the Business for Social Responsibility found that 88% of retailers cite 'insufficient concentration of your target customer' as a factor influencing the failure to establish stores in underserved markets. Seven years later, the growing interest in urban markets suggests that many retailers are rethinking this long-standing misperception. We can now add Old Navy, going from 25,000 sf to approximately 10,000 sf, and Sports Authority, going to a 12,000 - 15,000 sf model called S.A. Elite, to our growing list of retailers exploring urban formats.

Yet commercial district managers know that challenges remain. Big box retailers exploring "small box" opportunities in urban markets must overcome concerns that still keep them out of urban markets. As one Walgreen's executive shared with me a few weeks ago, their concern is less about product disappearing through the front door with customers, than about product disappearing through the back door, i.e. with employees at checkout or during shipping. Proper surveillance and inventory control can help to address these issues.

Retailers also have to get used to lack of parking. The ICSC survey found that 83% of retailers are concerned about 'inadequate parking'. Yet, the best locations in dense urban markets are not typically known for easy automobile access or ease of parking. Consider Bed-Stuy in Brooklyn -- the subway stop at the intersection of Nostrand Avenue and Fulton Street sees 12,800 boardings a day in a community whose retail leakage is estimated at $785 million a year. Yet amazingly, there is no national drugstore at this busy intersection.

And we all know that crime still scares away some retailers. 93% of retailers cite crime or the perception of crime as a reason for their decision to steer away from urban markets. This suggests that our jobs as commercial district managers will continue to play a significant role in improving the reality and perception of crime within our districts. Bed-Stuy Gateway Business Improvement District is tackling this challenge directly by establishing a Public Safety and Environmental Control program that identifies hotspots of criminal activity and works closely with law enforcement to develop strategic interventions, as Colvin Grannum, President and CEO of the Bedford-Stuyvesant Restoration Corporation notes in his regular Bed-Stuy Patch column.

As the retailing industry considers urban markets, they have got to realize that many issues related to the shopping environment are completely outside of their control, and that commercial district managers can play a role in maintaining the standards that many of these retailers have come to expect in more controlled shopping environments. Whether this includes managing public safety concerns, maintaining clean streets, or addressing the district vacancy rate, the role of commercial district managers will become increasingly critical to ensuring that the shopping experience inside the store is matched by the shopping experience outside of the store. Some industry experts posit that 30% of a shopper's desire to return to a store is based on what happens outside the store. If this is true, then retailers can ill afford to be lax about addressing the needs and participating in the efforts of their local commercial district management entity.

News and Issues Roundup

2011-03-30T12:38:00.001-04:00

Greater Greater Washington explores the pro's and con's of diagonal parking in Washington D.C. ["Diagonal parking: Does this quick fix get us what we want?", Greater Greater Washington, 3/28]

What happens to a commercial district after an earthquake and tsunami? Retailers in the Ginza shopping district in Japan find out. ["Less Appetite for Luxury", NY Times, 3/25]

What does it take to survive in downtown St. Louis? Downtown retailers struggling with storefront sales seem to find opportunity by selling on-line. ["Tough 2 or 3 years for downtown retail", St. Louis Dispatch, 3/13]

How many downtown residents does it take to start attracting retail? Harrisonburg, VA is finding out the hard way... ["What's the Downtown Retail 'Tipping Point?"', Harrisonburg News, 2/1]

Who is on "City" Target's radar for a smaller box store? One community explores what it takes to make Target's short list for it's urban format stores. ["Retail envy: Louisville needs downtown retail, but does Target need a new urban market?", Insider Louisville, 2/1]

Census Challenges Begin.

2011-03-28T14:04:00.000-04:00

As I predicted here a few months ago [The Census is Here! Is it Too Early to Worry about an Undercount? ], we would begin seeing challenges to the 2010 U.S. Census count sooner rather than later. Right on cue, Mayor Bloomberg announced the City of New York's intention to file a formal challenge right here in my own backyard of Jackson Heights, Queens. Serendipity? For sure.

According to the Mayor, “Jackson Heights is a good example of the problems we’ve discovered. According to the Census Bureau, the population of Jackson Heights decreased – that’s right, I said decreased – by nearly 5,200 people, or by about five percent, between the years 2000 and 2010." He goes on to note,“Everything we know about these neighborhoods tells a very different story. These are vibrant, vital communities. People who have tried to find apartments in these neighborhoods can confirm that there just isn’t an abundance of vacancies."

The Mayor focused on the fact that an undercount results in fewer federal dollars for the City. While important, that is only part of the reason why an undercount is a problem. For commercial district managers, a census undercount, or findings that suggests a population decrease, means more hours logged overcoming the misconception that there is decreased discretionary demand in your neighborhood. It means more time spend finding other, more credible, sources that tell the true story, that your neighborhood is teeming with people who have money to spend, but few places to spend it. A Census undercount means that retailers are more likely to forego urban opportunities, because when they pull market data, they may not like what they see at first glance.

We already know that getting retailers to urban areas is a challenge, which is why Census accuracy is so critical. In 2004, the International Council of Shopping Centers (ICSC) completed a survey of retailers in partnership with Business for Social Responsibility. When asked why they didn't invest in urban areas, the second most cited obstacle to investment was an "insufficient concentration of the retailer’s target customer". Too bad a Census undercount only serves to reaffirm these misconceptions.

Retail Insights: Spring 2011

2011-03-23T14:53:00.001-04:00

This quarter, Retail Insights looks at two interesting trends that seem to be converging. The first is an increase in small business lending, with a focus on how lenders are rethinking their lending criteria. In the long run, this will make it easier for many small businesses to secure loans to relocate and expand within our districts. The other is a growing interest from big box retailers looking to test 'small boxes' as a way to make a dent in urban markets. Both spell opportunity for commercial district managers seeking to attract and expand businesses within their districts.

Small Business Lenders Revisit Character
One of the things that prevented small business expansio
n over the past few years has been the inability to finance growth during the recession. This is because fe

wer banks were making loans as underwriting criteria got much more stringent. As a result, small business often suffered the most - their loans are notoriously among the most difficult to make and underwrite.

In the past, local banks had personal relationships with businesses owners and made lending decisions based on a number of factors – but most important was often the customer relationship. As the banking industry grew and those relationships eroded, small business loans were more frequently made based on the business owner’s personal credit score, with real estate used as collateral for the loan. In the past few years, real estate values have collapsed, which meant that so too did a small business owner’s ability to borrow against their asset. The good news is that there are some indications that banks are beginning to open their purses a bit and loan to small businesses. The Wall Street Journal recently covered the issue [“Banks Get Back to the People Business”, WSJ, 3/7/11] and found that more and more banks are looking beyond a small business owner’s personal credit score during the underwriting process. The American Bankers Association has begun creating educational programs for bankers on how to analyze a borrower’s character and use that analysis in their loan applications. For example, banks have begun to look at how businesses have survived the recession as an indicator of credit worthiness. This is great news because as businesses look to relocate, grow, or expand within your districts, they will have more access to the capital necessary to do so. Another implication of this trend is that district managers can begin thinking about how to helping establish and deepen relationships between local banks and local businesses through networking events and partnerships.

On-Line Spending: Opportunity for Business Districts?

We tend to think of on-line shopping as a threat to most retailers, both big and small. But if we view this challenge through another lens, there are clearly potential opportunities for commercial districts in this trend as well. As more and more customers get comfortable shopping on-line, retailers, in particularly big box retailers, are finding that they have much more real estate than they need. In some cases, they are seeking spaces that are more in-line with the real estate offerings along traditional

commercial districts (see big box to small box below). But perhaps more significant is the fact that shoppers will begin seeking more from their shopping experience than simply the desire to purchase. Going 'out' shopping is becoming more about the service and the experience - it is both an event and a leisure activity. Successful shopping districts are able to capitalize on this trend by creating an attractive ambience, what we sometimes call the 'third place', those informal gathering spaces that meets our very human desire to socialize and interact with our fellow human beings. Whether that third place is a public gathering space, or the local coffee shop, good district managers can sieze the opportunity to create an attractive alternative to the purely functional shopping experience offered by big box stores and strip shopping centers.

Big Box to Small Box
Increased on-line spending also means that big box retailers are looking at scale down to smaller format stores. Big box retailers are going on diets and shedding square footage they no longer need. As they explore smaller format stores, they are also realizing that these smaller stores allow them to more effectively penetrate urban markets. Traditional big box retailers like Staples and Best Buy, for example, now have store designs that range in size from 1,500 – 4,000 sf, sizes that are much more compatible with traditional business districts. And how could we forget the mother of all big box retailers, Walmart, who is rolling out a 15,000 sf small format store. Walmart executives admit that they have been losing market share to dollar store chains and a maller format store allows them access to markets that were off limits before.

Related Blog Posts:
[Big Box Retailers Test Small Spaces]
[Walmart Seeks Aggressive growth of smaller stores in urban markets]

Growing Resistance to BID Formation?
Business Improvement Districts (BIDs) are the holy grail of the commercial district management profession because they ensure a regular and sustainable source of funding for district services and improvements. When every property owner and/or merchant within a BID district contributes, the costs and benefits are equally shared among all beneficiaries. However, starting a new BID during difficult economic times is not always easy. Community resistance often forms when the BID assessment is perceived as a tax, rather than a fee for much needed services to maintain an area’s overall competitiveness as a shopping destination. While I’m not quite sure if this resistance has risen to the level of a trend, I have noticed more and more articles about BID opposition popping up in the news. What is ironic is that marketing and district improvements are needed now more than ever. As government services are reduced, business districts will have to meet the challenges of sanitation, graffiti removal, and security with fewer public resources. Keeping a district competitive under these challenging financial circumstances will become increasingly challenging if BID’s are not part of the solution.

Take the CDA 2010 Professional Development Survey!

2011-03-21T17:04:00.000-04:00

As a profession, the field of commercial district management is growing very quickly. Every month there are more Business Improvement District's created to add to the estimated 1,500+ that already exist. This doesn't even count the approximately 2,000 Main Street programs and hundreds of community development organizations that manage commercial revitalization activities. Between the staff, board members and volunteers at these organizations, there are thousands of individuals who require basic knowledge about commercial revitalization, yet often arrive at their first job without practical skills in the field.

Unfortunately, there are pitifully few places where folks can get practical training, and even less national consensus around what kind of skills are critical to success in the field. With untold billions of dollars being dedicated to improving downtown and neighborhood commercial districts throughout the country, ensuring that the professionals who are making strategic decisions about commercial revitalization are property trained is critical to ensuring that these funds are well spent.

In order to meet this growing need for professional development training, we have got to better understand the need. That starts with you. If you are a practitioner, volunteer or board member of an organization involved in commercial revitalization efforts in a downtown or neighborhood, please take this survey and help us understand what the training needs are.

Help us turn downtown and neighborhood revitalization into a discipline! CLICK HERE to take the survey now!

News Roundup: March 16, 2011

2011-03-16T16:08:00.000-04:00

"Retail vacancy rate stable, and that's a good sign, survey says." NorthJersey.com (3/14)
The retail vacancy rate for northern and central New Jersey's prime shopping highways remains stuck at recession levels, although recent leasing activity indicates better numbers are ahead.
Could better numbers be ahead for other commercial areas?

"Pop-up retail gains favor in D.C. with Garment District, Mount Pleasant Temporium", The Washington Post (3/6)
Temporary 'retail boutiques' are an outgrowth of the D.C. Office of Planning's Temporary Urbanism initiative to transform vacant commercial space into lively destinations that highlight the retail potential in emerging neighborhoods.
Retail pop-up fills vacancies, creates buzz and gives local entrepreneurs a place to test their retail concepts.

"Dollar stores offer bigger bang for buck", San Diego Union-Tribune, (3/14)
John Sanchez had never stepped foot inside a dollar store until last April. That’s when he was laid off from his job and was forced to make some drastic budget cuts, including getting back to basics for a buck. Now, even though he’s returned to work, it’s hard to get him to shop anywhere else.
Dollar stores are frequently the scourge of neighborhood commercial district revitalization professionals. Are we overreacting?

"City’s Bicycle-Friendly Momentum On Path To Success", Long Beach Gazette, (3/14)
In its quest to achieve the coveted designation of “Most Bicycle-Friendly City in America,” Long Beach has kept the forward momentum of improvement and innovation cruising into 2011 — but not without a derailleur or two getting caught in the spokes along the path.
From East to West Coast, bike paths are increasingly controversial. Do they help or hurt neighborhoods and local businesses?

AOL's new site, Patch, covering topics of interest to commercial district managers

2011-03-16T10:53:00.002-04:00

I have begun to notice a trend. As I search for news for this blog, I have noticed that Patch, a 'community-specific news and information platform' has been the source of more and more articles related to commercial districts. AOL sponsors Patch, and has invested heavily in content by hiring 800 local writers and thousands more freelancers to cover hyper-local news stories. Each Patch site, there are 100+ so far, is branded by the community it serves, and allows locals to keep up with local news, local business listings, and community events via a populated calender. Patch is yet another resource for promoting your businesses and your district. It can be used to find volunteers as well. Each site is run by professional editors and writers who live in or near the communities covered. Local businesses can request to be listed as well. You can also sign up for a newsletter that sends news, events, and business promotions directly to your email in-box. As the site grows, it will be an increasingly powerful platform for commercial district managers to get the word out about promotions and events.

The verdict is still out about Patch, but it is an intriguing effort that seems to be getting some traction, particularly given all the coverage I have seen on smaller community revitalization efforts - efforts that don't often get media coverage.

The marketing playbook as practiced by shopping center managers

2011-03-07T15:21:00.000-05:00

I've always argued that commercial district managers should consider their jobs similar in scope and outcome to shopping center managers. Business Improvement Districts in particular share similar objectives, including the goal of driving retail sales for existing businesses and helping to maintain and enhance property values within the BID boundaries.

During the economic downturn, our jobs as district managers were more vital than ever. Promotion and marketing are critical to attracting the shrinking number of household discretionary dollars out there. A recent piece in the Denver Post [Retail center "mechanics" do whatever it takes to maintain tenants, 3/1/2011] follows Allen Ginsborg, a principal at NewMark Merrill Cos, a California-based commercial real-estate firm, in his sometimes zany efforts to do whatever it takes to drive pedestrian traffic to the shopping centers that he managers. Some of those efforts include:

Dressing up a man in a Santa suit and dropping him from a plane
Putting on shows (dog shows, car shows, etc)
Setting up seasonal events (i.e. Haunted House for Halloween)
Sending out coupon mailers
Using social networking sites

His efforts don't stop at marketing and promotion - he also looks at ways to address vacancies (Bingo hall anyone?) and take on much needed physical improvements aimed at making the shopping center more convenenient and visible to passers-by. Whether that includes new highway entrances, additional signage or taking down trees that are obstructing storefronts. These are kinds of efforts that can really have made a difference to your businesses bottom line. In the case of Ginsborg, his efforts seems to be paying off - 36% revenue growth and a 95% occupancy rate.

These efforts should sound extremelly familiar to most business improvement district managers. Helping your businesses find ways to collaboratively market their goods and services to residents, employees and visitors; managing seasonal promotional events; utilizing social networking sites to share happenings in your district; these are all activities that should be part of any district managers everyday playbook.

Temporary stores fill vacancies and serve as an incubator for local entreprenuers

2011-03-07T12:14:00.000-05:00

After: A home for budding entreprenuers and an
exciting new addition to to the district

It seems pop-up stores continue to gain momentum in neighborhood districts. Between a recent uptick in consumer spending and rumors of a potential loosing of the credit market [see today's WSJ, "Banks Get Back to People in Business"] , these might be the beginning of better times for neighborhood business districts. I recently stumbled across a program offered by the D.C. Office of Planning called the Temporary Urbanism Initiative that is taking advantage of these trends by aggregating multiple local retailers into temporary pop-up spaces. The City has awarded small grants to local commercial district management entities to fund these spaces. On H Street, the 'Temporium' as they call them, houses 17 local designers. In the Shaw district, the pop-up houses 40 designers and artists in a formerly vacant 10,000 sf space. Finding vendors can be a challenge, which is why partnering with local community and artist groups is critical to ensuring a good tenant mix. At the Mount Pleasant Temporium, they have even added events to help draw retail traffic into the 900 sf space that houses 34 vendors. This is a wonderful way for a local commercial district management entity to accomplish multiple goals: fill a vacancy, support local entreprenuerial efforts, and drive retail traffic to their district.

Before: a vacancy in search of a tenant

For more informaiton, The Washington Post recently cited this initiative in an article: "Pop-up gains favor in D.C. with Garment District, Mount Pleasant Temporium", Washington Post, March 6, 2011

Big Box Retailers Test Small Spaces

2011-03-07T10:16:00.000-05:00

A 4,000 sf Staples store in Watertown, MA
located right in heart of the traditional business district.

The buzz towards 'small boxes' continues! A recent Wall Street Journal article ["As Big Boxes Shrink, They Also Rethink", Wall Street Journal] covers the trend among big-box retailers who are shifting to smaller stores, including Best Buy, Staples, and Office Depot, among others. For Commercial District Managers, the implications of this trend are significant. First, the trend towards smaller stores suggests that retailers will be looking for spaces that are more compatible with the kinds of spaces available within traditional commercial districts. For example, Staples is testing a 4,000 sf store in downtown Watertown, MA that carries 1,200 of the typical 8,000 items carried in a larger Staples. For smaller downtown districts with a decent office worker population, this model would be a great fit, allowing businesses and office workers the ability to make convenience purchases for the office. As one reviewer of the Watertown store mentions "I needed an ink cartridge and some paper - and I needed them QUICK" and the Staples store fully met her expectations. A small office supply store is the kind of addition to downtown the tenant mix that make traditional business districts more compelling. The article also mentions that Office Depot is testing a 5,000 sf concept. And the "Best Buy Mobile" concept is even smaller, at 1,420 sf (the average Best Buy is almost 40,000 sf).

There is another long-term trend to take note of here. As we all know, shoppers are choosing to spend more and more of there discretionary income on-line. As a new parent with severe limits on my time, I have to admit I am one of those people. And as I become more comfortable shopping on-line, the more I tend to shop on-line. It's a vicious cycle. As more and more shoppers like myself become comfortable purchasing on-line, it will take alot more to get them to visit a shopping district than it did before. Increasingly, the onus is on us to improve the overall shopping experience. That means ensuring that the district is at the very least clean, safe and attractive and that there are reasons to go to the district besides shopping, including interesting events and activities. These are all things that cannot be easily replicated by an on-line shopping experience - and where traditional business districts will always have an advantage.

Roundup: Commercial Districts in the News, February 28, 2011

2011-02-28T16:26:00.000-05:00

Art on First aims at luring tourists to downtown Napa, North Bay Business Journal
Numerous hotels and storefronts, along with the tourism improvement district are presenting the program as a means to keep downtown Napa and surrounding areas a tourist attraction, with activities that will draw more visitors to the city itself.

Cities consider forming a tourism special district, Ventura County Star
The partnership among the three cities would create a Tourism Business Improvement District where hotels, motels and RV parks would be assessed 1.5 percent of their total room rental revenue. The five-year assessment is expected to bring in about $1.2 million annually.

Dorchester free parking scheme set for long stay, Dorset Echo
A town in England has experimented with a parking voucher system that provides two hours of free parking for shoppers who at least spend £10 (approximately $16 dollars). The parking scheme has been hailed as a "runaway success".

Coke Gets the Mall, Pepsi Gets Downtown, Washington City Paper
PepsiCo is working with the Downtown Business Improvement District and the D.C. Department of Public Works to start a recycling program involving something called a "Dream Machine.

Sprinkles Gives Local Businesses a Sneak Peek, Patch.com
A small business in the Georgetown Business Improvement District plays 'good neighbor' by offering local businesses a baker's dozen of free cupcakes before opening it's doors to the public. Nice idea!

Engaging Property Owners and Business Owners in Commercial Revitalization Efforts

2011-02-28T12:47:00.000-05:00

One of the most challenging aspects of a commercial district manager's job is engaging property owners and businesses. Without property owner engagement, retail attraction is difficult to impossible. And without business owners, marketing and promotional efforts can miss the mark in your efforts to grow retail sales. While it can sometimes be difficult for us to understand why property owners and business owners are so reluctant to participate in our efforts, there are ways to engage property owners and business owners. So what's the answer? It starts with relationship building.

I a currently facilitating a new program by Coro New York called the Neighborhood Leadership Program. This program, funded by the New York City Department of Small Business Services, brings together 20 emerging and established leaders in commercial revitalization throughout the City of New York. It is a truly amazing group of individuals who are knee-deep every single day in the experience of managing commercial districts. So when this group of accomplished leaders started brainstorming about how to engage reticent building and business owners - you bet I took notes! Here are some of their ideas, along with some of my thoughts, about gaining trust and soliciting participating from community stakeholders.

A good compliment can go a long way. Flattery and deference are always helpful when starting a conversation. Find something authentic to compliment them about. I have a colleague who is quite successful at this. Whenever I walk his district and we bump into someone he knows, I am always impressed by how he takes pains to offer some tidbit of information about the person that is tremendously flattering and often deferential. It's amazing to see how these compliments leave these people beaming and ready to help and participate in any way they can. He is one of the most effective organizers I know, and one of the few people who can pick up the phone and ask anyone for anything - and they actually do it! That's alot more than I can say for most people!
Diplomacy helps. When you do need to offer criticism, be diplomatic and don't criticise harshly.
When asking, be specific. When approaching someone with an ask, be clear about how they can help and be focused and strategic in what you are asking. Is it time? Is it money? Is it their knowledge about something in particular? Unless you know them well, flesh out your ideas in detail before making the ask.
Visit frequently to see how things are going. Don't just go see your building and property owners when you need something. Go see them to frequently just to check in, to see how business is doing, and to find out what you can do to help them. You'd be amazed at how having your ear to the ground and building these relationships can help you improve your job performance.
Figure out what your shared goals are and find a way to address those needs through your actions. If store owners are concerned about security, and you also know that security issues are hampering the entire district, tap certain business owners to participate on your security committee. If a store owner is particularly good at window displays, ask them to help other businesses in the district. This example came up recently on a visit I made to a commercial district in Philadelphia. I was amazed to see one business owner take it upon himself to help others with their window displays. As a fellow business owner, his colleagues were more willing to take his advice. This is not to say that he did not face resistance. He shared with me that it was his mission to help one particularly reticent business owner with their display. What was his tactic? Visiting frequently and building a relationship! Sound familiar?
Tap their interests. Find out what interests them and find a way to engage them on that issue. Do something for them. Helping your businesses and property owners is a bit like building a reserve in a bank account. The more you invest up front, the more likely they are going to reciprocate when it comes time to request a withdrawal, i.e. their participation in something you are doing.

This list is clearly not exhaustive, but what is key is that building relationships and trust is the first step in engaging your property owners and businesses in your efforts. So good luck!

"CityTarget" makes plans to open in downtown Chicago

2011-02-22T15:08:00.000-05:00

In our on-going coverage of big-box entrants into the urban marketplace, we note that Target recently announced the opening of what they are now calling "CityTarget" at the landmark Sullivan Center in downtown Chicago ["Bull's eye for Target, city", Chicago Tribune] at some point in 2012. This marks the fourth urban format store in the U.S. The urban format is a bit smaller than Target's typical format and will include focused merchandise mix, including apartment basics, clothing and fresh food. The store will offer only 54,000 sf of selling space out of a total 125,000 sf of leased space. As a point of reference, the average Target includes 100,000 sf of sales space out of a total of 135,000 sf of leased space.

The ratio of back-of-house to selling space allows Target to place a greater merchandise selection on the sales floor, but will require more frequent restocking. Let's hope they get this right this time. The last time I walked into the Target in downtown Brooklyn, there were way too many empty shelves.

University Partners with BID to Improve Brooklyn Commercial District

2011-02-22T11:20:00.000-05:00

The partnership forged by the Myrtle Avenue Revitalization Project and Pratt Institute, a university located within the distrct, is one that I often mention when speaking about how partnerships in support of commercial district revitalization can result in a win-win for everyone. A recent NY Times article highlights the example. ["Pratt Institute Takes an Interest in Making a Neighborhood Nicer", NY Times, Feb. 15, 2011]. Pratt Institute has gone from a university that turned its back on the neighborhood to one that has made some serious investment on the corridor, whether it be in the form of leadership on the BID board or major capital investments such as Myrtle Hall (above), a $54 million building that will change the face of the district, adding vitality and most importantly, retail traffic in the form of students, on the Avenue.

Round-Up: Commercial District News, Feb. 21, 2011

2011-02-22T11:03:00.000-05:00

A community group in Baltimore explores a local currency to support small businesses.
"Group Proposes Alternative Current to Support Local Economy", The Baltimore Sun, Feb. 21, 2011

Will the closing of Border's provide an opening for small bookstores? "Closing of Borders Could Revive Mom-and-Pops", Wisconsin Radio Network, Feb. 21, 2011

The politics of Business Improvement Districts are not always pretty. Not all BID's are well recieved once they have been created. "Rift in West Racine follows petition to terminate BID". The Journal Times, Feb. 21, 2011

BID 'Census' Provides Insight into Standard Practices

2011-02-14T10:43:00.000-05:00

The International Downtown Association (IDA) just released the U.S. BID Census. Commercial district management entities can use this information to compare their activities with their counterparts around the nation.

A few additional notable findings as they relate to typical BID budgets and programmatic priorities include:

Cleanliness and maintenance are a priority for most BIDs. According to the survey, three out of four BIDs provide litter and graffiti removal and more than half do rubbish collection and/or sidewalk washing, usually through contract.
Marketing and promotional activities are priorities for most BIDs. Common marketing programs are: advertising campaigns (86%); maps and area information (80%); holiday decorations (76%) and festivals (71%).
Security programs exist, but are not common BID activities. Relatively few BIDs have any form of security-related program. Of those that do, 25% provide uniformed "ambassadors". However, 81 BIDs (40%) also offer "ambassadors" as a marketing and hospitality service.
When BID's get into the business of retail leasing, they do so through marketing. Business recruitment and retention is done primarily through marketing (82%). Other related programs are: market research (62%); active recruiting (57%); and performance reporting (50%). About 30% of BIDs offer financial incentives to new or expanding businesses.
Funding capital improvements through debt service is uncommon. Only ten (10%) percent of BIDs reported funding debt service to pay for capital improvements.

The survey findings are available for purchase, but a short synopsis is available for free by clicking here.

One-on-One with the Owners of Pamela's P&G Diner and Winners of 'Best Chain on Main'

2011-02-07T15:25:00.002-05:00

Gail Klingensmith and Pam Cohen tell me why investing in commercial revitalization is good for business, and what to do if you are interested in bringing a Pamela’s P&G Diner to your community.

For more on the winners, click here. For the on-line gallery hosted by the industry trade magazine Retail Traffic, click here.

***
How would you describe your dining concept?

Gail: We specialize in full-service breakfast and lunch 7 days a week. Everything is made to order. It’s not fine dining but it’s fast and furious.

Why is contributing to community revitalization important to you?

Gail: One of the reasons is that both Pam and I both grew up near thriving commercial districts. Pam grew up in the Squirrel Hill area of Pittsburgh where we have our first restaurant. We always loved the concept of walking to shops, the ability to get up and get out and walk for your coffee, walk for your breakfast and it used to be walk to the bookstore. We both love living in the city. Investing in these neighborhoods is the only way to keep them alive.

Pam: We like to deal with neighborhoods and we like to become involved with the community. This is not a get rich quick scheme. It’s good for everyone.

How do your efforts help improve the district?

Pam: Now that we have been around we have become an institution and a destination in the neighborhoods where we are located. We bring a substantial amount of people into the neighborhood. If Other independents benefit from our customers shopping before or after they eat.
Gail: In the beginning, when we first had one store, we were the one's who benefited from being near a destination store. In the very beginning, our Squirrel Hill location was near Little’s Shoe Store. People would drive from everywhere in the area to go to Little's. Once at Little’s they would come to us. Now we play that role for other independents.

Pam: In the Strip District, when we first went down there, it was primarily a 6 day a week business district. Nothing was happening on Sunday. Very few locations were open. At first we had the entire area to ourselves. But eventually there was enough foot traffic to our store on Sunday that gradually other businesses in the area started opening up and now there are places where diners can shop on Sundays as well.

What can other businesses learned from your success?

Gail: Take a chance.

Pam: Investing in a neighborhood helps build loyal customers.

In your Strip District location, are there additional improvements you’d like to see?

Pam: Frankly, Neighbors in the Strip has been making a lot of those improvements already. They are trying to bring in a new market and they recently attracted a grocery store. They are also starting to bring back people to live in the area. That success speaks to the impact that Neighbors in the Strip has had on the community.

Gail: Neighbors in the Strip is by far the most supportive community group we have come across. Maybe that’s what’s important to revitalization - having a group like Neighbors in the Strip to welcome new businesses and supports new businesses. They welcomed us. We didn’t know anyone. This group supported us the whole way through.

Pam: It’s been exciting to see the improvements happen, in particular in the Strip District.

Gail: One of the things that would be beneficial for all of us is more parking, although it’s a double edged sword.

Are you interested in expanding and opening up new locations?

Pam: We are always interested in growing.

What do you look for in a neighborhood?

Pam: Usually we find a neighborhood we like and start to research it first before we decide to open a new location. We look for sidewalks and people walking around. We pretty much cut across all demographics and income in terms of where we locate. We are in some of the higher end neighborhoods and also in blue collar neighborhoods that are trying to revitalize.

Gail: The building and neighborhood have to speak to us. Our most recent location is in an old car dealership with an old marble floor. We did a full rehab at that location. Pam is an artist and she sees things that I don’t.

Pam: We have stores that range from 800 sf to 4,000 sf. I think what works best is about 2,500 – 3,500 sf.

Where would you consider expansion?

Gail: We have two young women we are mentoring that are interested in growth and so we are open to more than just the Pittsburgh region. We have thought about D.C. around and are open to other cities through the region.

Pam: We are always open to hearing from communities in and out of Pittsburgh. We are looking for neighborhoods, not shopping centers.

If someone thought their neighborhood was a good fit for Pamela’s P&G Diner, what should they do?

Gail: If someone wants a P&G diner, they can email us personally.

Leasing Information:
Contact Gail or Pam via email: gaak@aol.com or paamie@aol.com

Independent Restaurants Hit Hard by Recession

2011-02-02T11:39:00.000-05:00

The recession has been hard on independently owned restaurants, according a recent restaurant census conducted by The NPD Group. They survey found that the number of U.S. restaurants declined by -1 percent, or a loss of 5,551 restaurants, from a year ago. However independent restaurants drove the decline, with their number of units dropping by 2 percent during the period.
“These past two years have been particularly tough for independents, which don’t have the resources to compete with the chains,” said Greg Starzynski, an NPD food-service specialist. “Over the past few years, we’ve lost several thousand independent restaurants.”

The good news is that while visits to restaurants declined by 1% over the year, this is an improvement over the 3% decline for the previous year.

Buy-Local Campaigns Boost Business Revenue

2011-02-02T10:23:00.000-05:00

The fourth annual Independent Business Survey, conducted by the Institute for Local Self-Reliance, a non-profit research and educational organization, has some good news for those engaged in 'buy local' campaigns. In 2010, active 'buy local' campaigns helped boost average revenue for participating businesses by 5.6%, compared to 2.1% for those without a similar campaign. These campaigns were particularly helpful over the holidays.

Survey respondents also noted that 'buy local' campaigns help build customer loyalty, bring new customers into a business, and result in increased local media coverage. According to a clothing retailer in Asheville, NC who was cited in the report, "the buy local campaign in our area [run by the Asheville Grown Business Alliance] is only a year old, but in that year we've noticed a signficiant change in people's attitutes towards locally owned and independent businesses. People are shifting their spending habits and are focused on keeping Asheville unique and thriving." For a look at the entire report, click here.

Seeking Nominations for MetLife Foundation Community-Police Partnership Awards Program

2011-01-26T16:29:00.000-05:00

LISC and MetLife are seeking nominations for The Metlife Foundation Community-Police Partnership Awards. This award program is a great opportunity for communities to recieve recognition for their work improving community safety. I really enjoy reading about previous award winners, many of whom are excellent real life examples of how commercial district managers can address safety issues that may be affecting the viability of their districts. For more information about the awards and for an overview of past winners, click here. The submission deadline for 2011 applications is Feb. 28.

The awards are the result of a partnership between the MetLife Foundation and the Local Initiatives Support Corporation (LISC) to recognize, sustain and share the work of innovative partnerships between community groups and police to promote neighborhood safety and revitalization.

Awardees will receive:

Monetary grants ranging from $15,000 to $25,000.
Case studies about award-winning partnerships will be disseminated throughout the community development and law enforcement industries.

Cash grants will be awarded in the following two categories:

Neighborhood Revitalization Awards (Six at $15,000-25,000): These awards celebrate exemplary collaboration between community groups and police that yields crime reduction as well as economic development outcomes, such as real estate development, business attraction and job growth.
Special Strategy Awards (Five at $15,000): Community and police partners who have achieved significant accomplishments in one of the following areas will receive awards: Applied Technology, Aesthetics and Greenspace Improvement, Diversity Inclusion & Integration, Drug Market Disruption, Gang Prevention & Youth Safety, Seniors & Safety

Not all Chains are Created Equal

2011-01-25T20:46:00.000-05:00

The Washington City Paper cites our 'Best Chain on Main' competition in a recent piece entitled "Subway Economics: Why D.C. Needs More Chains". What most people don't realize, they argue, is that some of the regions most beloved 'mom-and-pop' stores are in fact chain stores. Ace Hardware, for instance, sells license agreements to small operators, one of whom owns seven small hardware stores in the D.C. region. Most would never know that these stores are all owned by the same individual, because each store bears the name of neighborhood on the awning. This strategy allows independent retailers to benefit from economies of scale, while contributing to the local vibe that makes every neighborhood unique.

In light of Walmart's desire for entry into the D.C. market, the paper argues that these smaller independent chains should be encouraged to grow and thrive. Richard Layman, a D.C. blogger whose blog Rebuilding Place in Urban Space recently cited our contest, also speaks to how his position on chains has grown more nuanced over time. Throughout his professional career, he has come to realize that not all chains are created equal, and that chains can help a district improve its competitive position within the market by offering shoppers a diverse and attractive tenant mix. We tend to agree - but recognize that this is not always a popular position...

Retail Insights: Mobile Marketing and the Impact of Public Sector Budget Tightening

2011-01-18T14:35:00.002-05:00

This season we look ahead to see how retail trends might impact the work of commercial district managers in the coming year...

1. Bulk Text Messaging and 'E-Marketing'
Text messages and mobile marketing in general are quickly emerging as cost effective ways to market commercial districts. When you consider that texts have an open rate of 98 percent – compared to 22 percent for email, and that 90% of test messages are opened within four minutes of being sent, the gravitation towards mobile marketing is a no-brainer.

Bulk-SMS services send text message coupons, discounts and event reminders to customers that opt-in to receive them from businesses. Services like this can range from $24/month to send 300 messages, to $149/month to send 2,000 messages.

Mobile marketing is also a particularly good way to attract younger customers. If younger customers make up a good portion of your district’s customer base, or if you are trying to grow your market to include younger customers, text messaging could be an excellent way for you to focus your efforts.

The Mobile Marketing Association has an interesting set of case studies on their website for those interested in learning more. I particularly like the story of Ace Hardware, a small format hardware store found on a number of commercial corridors, particularly in the Northeast. Ace Hardware utilized mobile marketing to award loyal customers with four promotions over the holiday season. The efforts resulted in an 8% increase in-store traffic.

2. Groupon or Group Off?
This season has been the season of Groupon. For the uninitiated, Groupon is a service that sends a daily email to members about a ‘great deal’ from a local business in the city they are in. The deal is only valid if a minimum number of customers sign up for the discounts. Groupon then charges 30-50% commission on the value of each coupon sold. So is it worth it? The debate rages on. A recent survey of businesses conducted by Rice University suggests that of those who have taken the Groupon leap, 42% would not participate again. The New York Times also examined this issue in a November article entitled “Is Groupon Good for Small Business?” which is worth a quick read. Bobb Phibbs, a retail consultant for small and medium-sized businesses, rails against Groupon in a post “Groupon Review: Worst Marketing For Your Local Business – Case Study”.

Despite the lack of consensus on whether Groupon is good for businesses, the investment sector is jumping on the Group-on bandwagon. Groupon recently turned down a Google offer to purchase the company for $6 billion dollars. And now there are rumors of a public offering. All of this on the backs of small and medium-sized businesses – the target audience for many of Groupon’s offers.

3. Stores Within Stores
From small stores to large stores, retailers are finding ways to decrease costs by sharing spaces. This trend seems to be happening at every price point in the market. From Edwin Watts Golf shop inside a Sears in Houston, to Earnest Sewn and Flower Girl on the Lower East Side, to a bar within a drugstore in hip Williamsburg, NY. This is an interesting way for retailers to create the kinds of co-tenancies they want and need to keep shoppers returning to their stores.

4. Big Chains go Urban with Smaller Format Stores
In September, Target announced that it would focus less on new store development, and more on remodeling existing stores and testing smaller format stores with a focus on urban settings. With Walmart and Target leading exploring ‘urban strategies’, other chains will inevitably begin giving cities a closer look.

As exciting as this sound, the challenges of urban retail remain, including the challenges finding sites and the costs of development in dense urban areas. Yet as Walmart and Target can attest, if there are enough shoppers in any market, retailers will jump through whatever hoops they have to to open stores. Which is why a bigger challenge is on the horizon...convincing some retailers that there are enough customers to warrant an investment in an urban market. Which leads us to…

5. Growing Concern Over a Census Undercount
The release of the 2010 census will spur a cottage industry of census undercount analysis. Because federal funding is so closely tied to population counts, there is much to lose if a community believes it has been undercounted. Undercounts cost states critical federal dollars – and with state budgets already stretched to the max, many will be taking a closer look to see if they were somehow short changed in the most recent census efforts. In fact, in December, the State of California already claimed a census undercount. Let the second guessing begin!

The impact of an undercount will have a quiet but insidious impact on efforts to attract retail to urban markets. When census projections are off, retailers undervalue market opportunities and overlook locations in urban markets. The job of convincing and selling the reality of these markets then falls to business district management entities and economic development agencies. But unfortunately, their budgets are also being slashed…

6. Shrinking Public Funding for Downtowns and Commercial District Revitalization
The cuts to commercial revitalization efforts are widespread and growing. New York City saw a 33% decrease in funding for their Avenue NYC grant program in Fiscal 2010 as a result of cuts in funding from tax levy dollars. These small grants for everything from planning and market analysis to façade improvements.

The situation is not better 3,000 miles away in California, where recently elected Governor Jerry Brown is proposing to do away with Downtown Redevelopment Authorities. These Authorities have proved critical in revitalizing downtowns – providing funding for critically vital infrastructure investment and incentives that effectively allow downtown to compete with suburban sites. In light of budget challenges, the Governor is calling for the wholesale shut down of these authorities. This is a warning call to economic development agencies across the nation. Preventing deferred maintenance in the form of upgrades to aging infrastructure will increasingly become the responsibility of the property owners and business owners whose investments are at risk. Which leads us to…

7. The Rise of the Improvement District
The fall in State and local funding for commercial revitalization will be a call to action for businesses and property owners who recognize the need to fill the void. With the dwindling public funding, and with aging infrastructure at stake, businesses and property owners will attempt to find ways to help themselves. These efforts will take the form of Improvement Districts (aka Business Improvement Districts, Special Improvement Districts, Neighborhood Improvement Districts, etc.) These districts all follow the same concept. Within a defined area, property owners and business owners contribute to a fund for services or improvements to the district. These assessments are typically based on a formula that includes the property value and/or linear feet of street frontage.

Cities will be putting their limiting funding to advance BID efforts that help local communities develop sustainable funding for operational and program funding of commercial revitalization efforts.

Pittsburgh is one City taking NIDs by the horns. They are developing a Neighborhood Improvement District toolkit website, with valuable guidance on how to start and maintain a NID. This website is still in the works, but it promises to be a great tool for communities in Pittsburgh and beyond.

If Pittsburgh is any indication, the attempts to start Improvement Districts will not be without their critics. As businesses tighten their belts, many will be resistant to anything perceived as additional taxation. BID organizers need to get ahead of the curve and communicate that a BID assessment is not a tax, but rather a fee for services and investment.

AND THE WINNERS OF THE BEST CHAIN ON MAIN ARE....

2011-01-12T11:21:00.003-05:00

The Commercial District Advisor (CDA), in partnership with the Local Initiative Support Corporation (LISC), is pleased to announce the winners of our first annual 'Best Chain on Main' competition!! Click here for the press release.

These businesses were selected by a nationally recognized judging panel for their successful business model and their contribution to commecial revitalization. Congratulations to all of our winners!

In the coming weeks we will be profiling the winners on a dedicated website sponsored by Retail Traffic, and interviewing the business owners. So stay tuned!

First Place Winner: Villa

The first place winner is Villa, an urban-inspired apparel and footwear retailer with 26 locations throughout the Mid-Atlantic Region.

“Villa succeeds by combining profit and socially responsible business practices” says Farah Jimenez, President & CEO of People’s Emergency Center Community Development Corporation (PECCDC), the neighborhood-based non-profit leading local commercial revitalization efforts along Lower Lancaster Avenue in West Philadelphia, where one of Villa’s stores is located, and the entity that nominated Villa. “Villa’s arrival in 2008 significantly advanced our commercial revitalization efforts. Their gleaming storefront served as an example that helped inspire other businesses and property owners to improve their storefronts and window displays. Since then, we have completed 15 façade improvement projects in our district – 8 on Villa’s block alone.”

“Villa is proud to receive the top honor as the 2010 Best Chain on Main,” says Jason Lutz, Villa’s President and CEO. “This award exemplifies Villa’s strong commitment to the communities we serve— by providing our customers with quality merchandise and excellent service, by supporting neighborhood initiatives, and by setting a positive example through good storefront design. We believe the respect we show our communities through these efforts is a cornerstone of our success.”

Second Place Winner: Pamela's P&G Diner

Pamela’s P&G Diner is recognized for their “Strip District” location, a historically gritty, industrial neighborhood just northeast of downtown Pittsburgh. Pamela’s P&G Diner is an anchor in the district, attracting visitors from the entire region and drawing foot traffic that invariably helps other local businesses. According to nominee Neighbors in the Strip, a local community group leading commercial revitalization efforts, Pamela’s also takes the lead in donating to worthy causes at its Strip District location. They consistently supports community efforts by sponsoring block parties, providing breakfast for more than 35 photographers during the organization’s annual photo walk and photography contest, and donating to other local causes.

The judges were particularly impressed by the attention to interior and exterior design detail – each location is designed and themed to enhance neighborhood ambiance and contribute to neighborhood character. The judges also recognized Pamela’s P&G participation in local commercial revitalization activities.

“We are proud of our commitment to walk able Main Streets” says Gail Klingensmith, owner of Pamela’s P&G. “Wherever we locate a store, we always make sure to belong to the local business group. We take pride in the fact that our stores have become a destination on Pittsburgh’s urban Main Streets.”

“They have been great partners since they opened about six years ago. For our annual Art and Stroll event, they helped close the block and brought in a 50’s band” says Becky Rodgers, Executive Director of Neighbors in the Strip. Rodgers adds “they are always first in line when we ask for help, donations, support or sponsorship. We are so pleased to see them getting the recognition they deserve.”

Third Place Winner: The Fresh Grocer
The dearth of fresh food options in urban areas is well documented. Philadelphia-based independent grocer The Fresh Grocer is helping to fill that market gap. The Fresh Grocer has been targeting urban markets in the Philadelphia area since 2001 at University City at 40th and Walnut. Their stores have helped catalyze commercial revitalization activities in many of the markets where they locate.

“These stores have spurred a lot of economic development in the areas” says The Fresh Grocer spokesperson Carly Spross, adding “our Northeast Philadelphia store is in an area that had been without a supermarket for 40 years.” “We also focus on hiring locally. In our newest locations, we have hired 98% of employees from within 2-miles of the store.”

The judges were impressed with The Fresh Grocer’s commitment to providing fresh food in underserved urban areas, their attractive displays and interiors, and their work in the local community. At their 56th and Chestnut store, they partnered with a local elementary school to incentivize higher attendance rates. At the end of the marking period, they provided $10 gift cards to children with perfect attendance rates. In the beginning of the initiative they gave out about 10 gift cards, but according to Sprouss, they gave out 85 gifts cards during the last marking period.

Honorable Mention

Honorable mentions were awarded to Mugshots Coffee House and Café, a coffee shop with 3 locations in Philadelphia, PA, and Gothic Cabinet Craft, a furniture retailer with 33 locations in and around New York City.

Mugshots Coffee House and Café: The first Mugshots Coffee House and Café opened over 6 years ago. They now have three locations in the Philadelphia area. Their newest location on Girard Avenue in Brewerytown opened in November of 2009 with support from The Merchant Fund’s ReStore Retail Incentive Grant program, among other grant programs. Owner Angela Vendetti is a local resident with a deep personal interest in seeing the neighborhood revitalized. She notes that Girard Avenue is still a street in need of investment, and that retailers remain hesitant to open stores in the neighborhood. However, she noted that the arrival of Mugshots has helped stir local buzz. Since Mugshots opened, a day spa and pharmacy have opened, and restaurants are beginning to add to the retail mix.

The judges were impressed by the impeccably renovated façade featuring brick, ornamental metal, French doors, and large original plate glass windows. These details make the storefront stand out as a model façade improvement along the street. The interior also reflects the attention to design, with a focus on restoring the original plan oak flooring and other period details. “The store is a gem” says Patricia Blakely of The Merchant Fund, who provided funding for the façade. The judges also commend the owner for a standout, high quality investment in a low/moderate income neighborhood, and anticipate that this investment will spur other similar investments in the area.

Gothic Cabinet Craft: Gothic Cabinet Craft’s affordable, solid wood furniture has been a New York staple for almost forty years. The winning location, 82-18 37th Avenue in Jackson Heights, NY stands out for the care taken with merchandise displays and their large transparent windows that give pedestrians simple eye candy on a street otherwise cluttered with newsstands and dollar stores. The store manager also offers the community prominent window space to display student art work sponsored by the Jackson Heights Beautification Group, a local community group. Additionally, most of their furniture is built locally in Maspeth, Queens, providing valuable industrial jobs within the City. We congratulate the winners and hope their stories inspire your efforts to work with local businesses in support of your commercial revitalization efforts!

The judges were impressed by Gothic’s willingness to locate in underserved outer borough markets, where their clean, attractive merchandise displays often stand out on otherwise visually cluttered streets. While there are other small, budget furniture stores near the Jackson Heights location, Gothic’s arrival in Jackson Heights has helped elevate the quality of furniture offerings in the district and has also created improved opportunities for window shopping.

Round-Up: Outdoor Eating

2011-01-11T15:24:00.000-05:00

As the next winter storm fast approaches, I dream of outdoor dining in warm weather. Perhaps now is the time to help some of your eating establishments think through simple ways to provide outdoor eating and boost their sales to boot! Here are a few examples for inspiration!

Beacon, NY

Montague Street, Brooklyn, NY

East Village, NY, NY

Grand Rapids, MI

Great Barrington, MA

Kingston, NY

Owner Wants Out. Now what?

2011-01-11T09:12:00.000-05:00

This is a challenge that almost every business district manager will eventually have to face, particularly as baby boomers age and many who started their successful businesses are reaching retirement. Perhaps it is no coincidence that I have now been approached at least twice in the past few months by district managers concerned about a local business owner who has expressed a desire to sell their business. In both cases, the businesses in question were important contributors to the overall retail mix, and the loss of those businesses would have significantly hurt the district.

So what do you tell the business owner looking to move on? If you face this problem, it may come as a surprise to that there is a business brokerage community out there focused on helping businesses get bought and sold. Engaging a reputable business broker is important, and you should find one that is certified by the International Business Brokers Association - and who comes well recommended. The IBBA website is a good resource for articles and information for those interesting in finding more about business sales as well. There are also websites like BizBuySell.com and BizQuest.com that specialize in business sales and purchases where an owner can list their business. Earlier this week, I also noticed a short piece called "How to Sell Your Business" recently published in The New York Times on-line edition by Barbara Taylor, a business broker. It is a good primer with a list of additional resources as well.

Selling a business is not like selling a home. The level of due diligence that prospective owners require is significantly greater - and the value of a business, particularly a small business, is often inextricably linked to its owner. Case in point - NBC Nightly News recently covered the challenges that Ann of Ann's Snack Bar, a Atlanta burger joint known for it's "Ghetto burgers", is having trouble selling her successful business. This destination business has lines outside the door. But with no buyers, Ann's might not be around for much longer. This would be a huge loss to surrounding business - and we hope for the sake of the district that she gets the help she needs to find a suitable buyer. Helping your owners find the resources they need to prepare their business for sale is an important way in which you can help - and one that could very well help the business remain in your district.

The Census is Here! Is it Too Early to Worry about an Undercount?

2011-01-10T12:31:00.001-05:00

Census figures have just come out and the long standing argument that the census undercounts urban areas is bound to become part of the story. In fact, the State of California is already prepared to argue that they were undercounted in 2010 by 1.5 million.

Cities are where the undercount typically happens. That is because 'hard to count' populations reside in urban areas. In fact, the last census is estimated to have resulted in an undercount of 1 million people of color in New York alone. The undercount not only affects the amount of Federal dollars heading to New York, it grossly under represents to retailers the opportunities for business, as most retail market analysis is based on census figures. If those figures are off, then businesses will come to inaccurate conclusions about market potential in urban areas. Consider that an undercount of 1 million individuals at a median income of approx. $22,000 per person represents $1 BILLION in unrecognized income - and you realize how much is at stake.

The International Council of Shopping Centers (ICSC) completed a survey of retailers in 2004, in partnership with Business for Social Responsibility, and asked them why they didn't invest in urban areas underserved by retail. The second most cited obstacle to investment in underserved markets was an "insufficient concentration of the retailer’s target customer". A Census undercount contributes to that fallacy.

Yet not all retailers are avoiding urban markets. In fact, this September chain behemoths Walmart and Target unveiled “urban” strategies – and the announcements cited both the diminishing opportunities in the traditional suburban marketplace and the unrecognized opportunities in the urban marketplace.

Will a 2010 Census undercount further reinforce the stereotype of limited buying power in urban areas, or will the success of stores like Target and Walmart put the debate to rest?

Sharing Retail Space - More than Just Sharing Costs

2011-01-09T22:45:00.000-05:00

Sharing retail space is not an uncommon approach to reducing costs among retailers. I recently toured the Lower East Side Business Improvement District with representatives from the City of New York's Small Business Services and was excited to see a nice example of shared space. The Lower East Side is historically known as America's original bargain district. Today its identity is in transition, as some of the original garment stores co-exist beside new entries into the market. One of those new stores is Earnest Sewn, a back to basics men's clothing store that fits right in with the district's historic identity as a garment district and newer identity as a hip place to shop, east and visit. We got to meet the owner and hear about his growth (this is their second store, the first is in New York's Meatpacking District). What intrigued me was the boutique flower store is tucked in a corner inside the store. At first it didnt' seem the most logical fit, until you looked around and noticed how wonderfully the floral and plant arrangements complimented the merchandise. The owner mentioned that the shared space arrangement is something that they have replicated in their other location. I took some pictures to share...enjoy!

Are you using social media to drive "real" traffic to your downtown?

2010-12-17T12:43:00.000-05:00

Your position as a commercial district manager is about utilizing economies of scale. District management entities are in an excellent position to serve as the portal for social media - serving business owners who don't want to have to deal with learning how to effectively use and maintain relavent social media context. I came across a recent news article [Read more: How Eight Major Franchises Are Using Social Media For Customer Service] about how franchises are using social media for customer service. The same concept can and should be applied to commercial district managers in their social media efforts. Franchisees pay franchise operators for the marketing support they provide - making it easy for individual franchise owners to particate and benefit from the social media strategy that their corporate parents manage and maintain on their behalf. There is no reason that these strategies can't work for commercial district managers.

Some examples that are particularly appropriate include:

Tasti D-lite offers "treatcards" that allow customers to accumlate points that can be redeemed at the store. This is linked to Foursquare and Twitter. Customers who register their card get extra points with every purchase.
Dunkin Donuts offers occational specials and free items via it's Twitter account
Church's Chicken launced a Twitter account. Customers who signed up were matched by a $1 donation to a pledge fund. This sounds like a great way to build a Twitter account quickly, and give to a local cause at the same time. I'm sure this could be leveraged to get some good local PR as well.

In general, these franchise operators are using Twitter and Facebook to send out marketing information, specials and other benefits on behalf of their many franchisees. The same concept can be applied to a commercial district social media strategy on behalf of its many businesses. Here are a few downtown's that have Twitter accounts for some ideas...

Downtown Alliance, New York, NY: http://twitter.com/downtownnyc (who wouldn't want to hear a choir at South St Seaport?)
Downtown Boulder, Inc, Boulder, CO: http://twitter.com/downtownboulder (nice offer of 1 hour of free parking for those with holiday cheer!)
Downtown Los Angeles, Los Angeles, CA: http://twitter.com/dtla (I love the tweet for free tacos!)

Go ahead and post a link to your downtown twitter account for others to view!

More Holiday Promotion Ideas...

2010-12-08T11:57:00.002-05:00

These just keep on coming...here are a few additional holiday promotional ideas. I like these promotional programs because they suggest good relationships with local retailers and are specifically designed to drive traffic into stores. Both are from Business Improvement Districts (BIDs) in New York City.

Holiday Coupon Book
Union Square Partnership works closely with neighborhood businesses to offer promotions through a holiday coupon book available at a local information booth and at participating restaurants and retailers. Shoppers can also go directly to the BID website to see the wide variety of specials available and download discounts directly. From discounts on meals to eyeglasses to yoga…each retailer defines the promotion they are comfortable with.

Barcode Promotions
The Downtown Alliance is taking their holiday marketing to a whole new level. They are using Scanbuy 2-D barcode technology to direct shoppers, diners and other visitors to their shopping destination of choice. Posters for the promotional event are located throughout the district—as well at bus stops and on the Downtown Alliance’s free bus service, the Downtown Connection. 2D barcode technology allows shoppers to scan bar codes using their smart phones. Users can download the ScanLife code reader app texting SCAN to 43588. These bar code direct users to shopping and dining guides and a special holiday page featuring specials, event listings and more on the Downtown Alliance’s holiday Web page.

The Downtown Alliance is also offering a “Downtown Culture Pass.” The pass offers three-day unlimited access—with gift shop discounts—to local museums and tourist destinations. A good idea for increasing visitation to the district, with the added benefit of a spillover effect for local restaurants and retailers.

Any one else have good ideas to share with readers?

Did "Small Business Saturday" Make a Difference?

2010-11-29T15:11:00.000-05:00

I came across a decent balanced analysis of American Express' Small Business Saturday campaign on http://www.newsy.com/ . The response from small business owners seems mixed. It certainly seems like a good idea to raise awareness of the impact of spending in local stores - but I do wonder whether the campaign did anything to change customer shopping habits or if it was just good PR. What do you think? Did the campaign work? Or do you have suggestions for how American Express can improve next year?

More Holiday Promotions: Boston's "Holiday's on Main Streets"

2010-11-27T22:09:00.000-05:00

The City of Boston has always been ahead of the curve in its efforts to support traditional neighborhood commercial districts. This holiday season is no exception. This week Mayor Thomas Menino announced the "Deck the Windows of Boston Main Streets" contest in an effort to recognize the best holiday window decorations by small business owners along their twenty designated 'Main Street' districts. For a look at the flyer, click here.

I like how the City is encouraging business owners to decorate their windows and create a festive holiday atmosphere in traditional business districts. This is just one component of its expanding "Holidays on Main Streets" program. In addition to the contest, the city has established free holiday parking and maintains a website announcing local holiday events along each of the Main Street districts.

Holiday Marketing: Beyond the Basics

2010-11-22T10:02:00.002-05:00

Christmas Tree. Check. Menorah. Check. Holiday lights. Check. Businesses have come to expect these basic services over the holidays. They know that a festive atmosphere helps drive sales - and holiday sales are critical to making sure they end the year in the black.

Beyond these holiday basics, what else can a commercial district management entity do to help local businesses thrive over the holiday season? In the neighborhoods of Kingsbridge, Riverdale and Van Courtland in New York, a local community development corporation, KRVC, is taking holiday marketing to the next level with a holiday shopping guide and shuttle bus betwen the districts. Piggybacking on Black Friday, which is traditionally the Friday after Thanksgiving, KRVC is encouraging residents to shop local on Sunday, providing dedicated parking donated by Staples, the national office supply retailer, and offering a free shuttle with dedicated stops throughout the three participating districts. Sponsors include State Farm Insurance and Chase Bank branches in the neighborhood. Participating businesses recieve promotion, and in return, do something special that day in their stores. The event has recieved local news coverage, and local businesses express high hopes that these new customers convert into return sales. This is an exciting event and an extremelly proactive way for a local commercial district management entity to help drive sales over the holiday season. Take a look at the event poster by clicking here or cutting and pasting the following link [http://www.krvcdc.org/pdf/Shopping%20Guide%20Map.pdf].

Target goes 'Urban' and Big Box vs. Small Box

2010-11-18T14:32:00.001-05:00

This is a follow-up blog to a previous post on Walmart’s emerging ‘urban strategy’. Target has also announced that it will be focusing its efforts on urban areas, including remodeling existing stores and focusing on smaller format stores more appropriate for urban markets.

How small is small?
Target has indicated plans to introduce a smaller store formats in the range of 60,000 to 100,000 square feet. Compared with its typical format of 125,000 to 180,000 square feet, this is small, but for most urban markets, finding that much square footage can still be a challenge, if not downright impossible. They plan to open the first small-format store in Seattle in 2012 – with plans to expand to at least 10 additional cities, including San Francisco and Baltimore, in the coming years. The stores will continue to carry a smaller selection of everything from fashion to home furnishing, but will focus on daily needs. These new Target stores will also include groceries. Target is rolling out a store within a store concept called “P-Fresh” that offers groceries within a 10,000 – 12,000 sf format.

Will this format work for or against traditional business districts?
Not every business district can support, or wants, a Target in their vicinity. The square footage requirements, not to mention the parking requirements, do not make this concept suitable for most traditional business districts. Where smaller format ‘big box’ stores do work are dense urban areas where parking can be reduced because of high mass transit usage. In New York City, Target has successfully development new stores – very profitable ones at that – where parking is limited and in some cases non-existent. In other markets, this is simply not possible.

Big box or small box on our commercial corridors?
A recent "Livability" survey by the Municipal Art Society found that far from shunning chain stores, most people want a healthy mix of retail in their neighborhoods – including chains stores. Not only that, but they actually prefer chain stores to mom-and-pops when shopping for certain goods, including food and apparel.

But not all chains are alike. Smaller chains, like Dunkin Donuts, Subway, Walgreens Drugstores, etc. are more in keeping and appropriate in traditional commercial districts and often help draw more pedestrian traffic to commercial districts – helping mom-and-pops increase sales as well.

Additional research into commercial districts suggests that there is a marked difference between the impact of ‘big-box’ chains like Target and ‘small-box’ chains like drugstores on traditional commercial districts. A seminal study of all of Philadelphia commercial districts - completed two years ago by Philadelphia-based Econsult - found that while big box stores do increase trips to the district, they do not always help surrounding businesses grow their retail sales [For more on the study, click here for the Executive Summary]. The study also found that “big-box stores…are moderately harmful for real estate values” and “large-scale national chains are associated with lower retail sales in some circumstances.” It seems that people want to shop at big-box stores, but don’t want to live too close to them. Which means that most urban districts might want to take care before putting out the welcome sign for big-box stores.

On the other hand, small-box stores, and pharmacies in particular, were found to play a positive role on commercial corridors. The study found that “chain pharmacies are beneficial by all measures in a corridor, and are most beneficial when they are in, not near, a mixed corridor. Chain pharmacies …should be seen as an amenity to a neighborhood.”

What is your take on the chain store?

"One" Approach to Commercial District Revitalization

2010-11-13T11:16:00.000-05:00

Managing commercial districts where multiple properties are controlled by a bevy of different owners is a little bit like herding cats - difficult to say the least. Successful district management is further challenged by absentee owners that are difficult to reach and engage in the commercial revitalization effort. One alternative strategy for commercial revitalization is the 'single-owner' model. This is when a one developer begins amassing a critical mass of buildings along a commercial district. This approach allows the owner to manage the area much like a shopping center asset - taking great care with tenant mix, controlling improvements to the public realm, varying leasehold rates to attract and keep a good mix of tenants, and creating and marketing a unique district identity.

This week, the New York Times highlighted New York developer, Greg O'Connell in his efforts to apply this strategy to Mount Morris, New York [Resurrecting a Village by Buying Up Main Street], a rural town in upstate New York. In the case of Mount Morris, O’Connell is following in the well tread footsteps of urban visionaries such as Dana Crawford, who started buying property in downtown Denver in the 1960's and created Larimer Square. Or Rosyln Hill (pictured right), who is credited with turning Northeast Alberta Street, in Portland, Oregon, around starting in the 1990's.

This approach is not for the faint of heart. It requires significant vision, not to mention a healthy amount of capital for investment. Besides that, when does this approach work and why?

An undervalued district with good bones. These visionaries often begin by surreptitiously buying undervalued assets - primarily attractive historic buildings in pedestrian-friendly commercial districts. The trick here is to buy the properties very cheaply. The only way to off set the expenses associated with renovating historic buildings is the low cost of purchase.
Great care crafting a distinct tenant mix. A visionary owner who takes great care attracting and retaining a unique set of businesses. In Larimer Square, Crawford started by leasing spaces to antique stores. In Portland, Hill focused on galleries and designers. This often means offering attractive rents and renting to non-credit tenants - i.e. mom-and-pops that offer distinctive goods and services.
Requiring tenants to adhere to a set of rules and regulations. In Mount Morris, O'Connell requires his tenants to remain open one evening a week, leave their lights on at night, and change their window displays at least four times a year. In Portland, Hill did not allow her tenants to use metal bars on their windows or lock their doors during business hours. These rules are often similar, in spirit at least, to the rules that tenants must abide by in local malls, where open and closing hours are often written into leases and fines can be levied if tenants do not comply.

As appealing as this approach may be - not every property owner can pull off this kind of transformation. When owners lack vision and see their properties as cash cows, renting to the highest bidder without thought to the quality or the balance of tenants, they effectively undermine the value of their asset.
The single-owner approach is also not one that can easily be replicated in high-value urban environments. When property is expensive and overvalued, it can be difficult for a single owner to purchase the critical mass of properties necessary to make a difference in crafting tenant mix or managing district identity. It can also be difficult for developers, who may have paid dearly for these assets, to invest and improve the properties as they require. The need to produce cash flow through rent begins to trump the ability to keep rents low to encourage interesting and creative retail in the spaces.

While the single-owner approach is not for everyone, there is alot to learn from those visionary urban pioneers who are able to pull it off.

The Do's and Don'ts on Pitching Stories to the Press

2010-11-10T12:03:00.000-05:00

Media saavy commercial district managers know how to turn their good work into free press. And free press for your district beats paid advertising any day. The Commercial District Advisor turns to Anat Gerstein, of Anat Gerstein Inc., to help us learn how to effectively pitch stories to the press.

Anat's firm serves the non-profit sector, and she recently moderated a panel discussion on how to get the press to cover your story. Panelists included Fernanda Santos from the New York Times, Beth Fertig from WNYC Radio, Gail Robinson from Gotham Gazette, and Shannon Troetel from NY1 News. The workshop was sponsored by the Nonprofit Coordinating Committee and hosted by the New York Times. Here are some of the do's and don'ts discussed by the panelists:

DO

Give reporters a heads up about upcoming events so they can plan accordingly
Have clients/real people available to discuss the issue (they want to hear from these people more than they want to hear from the Executive Director)
Your homework! Make sure you know what the reporters cover and how they cover it before you pitch and tailor your pitch to fit the reporters needs, not your own! Click here for a simple guide on creating a targeted media list
Provide a background for the story. Location isn't only important for TV stories, its also important for radio and print reporters like Fernanda Santos who want to get a broader understanding of the story and the people

DON'T

Follow up only to ask if the reporter received your email
Pitch old news
Call when reporters are on deadline (usually the late afternoons and early evenings)

You can find more tips on pitching the press here. For daily communications news and tips for non-profits, follow Anat on Twitter @anatgerstein

Helping New and Old Businesses Ride the Wave of Neighborhood Change

2010-11-10T11:17:00.000-05:00

Like many commercial districts, Astoria, a tight-knit urban neighborhood in Queens, NY, ["A Small Business Barometer", New York Times, Nov. 8, 2010] is a changing neighborhood. Yesterday's immigrant residents make room for today’s mix of residents – who often arrive with a different set of spending habits. Helping local businesses ride the wave of change is often part of a commercial district managers job.

Change can be difficult - and the recession has helped speed up the cycle for some businesses who were already facing a shrinking customer base. I sometimes get asked by commercial district managers how they can help existing businesses keep up with these changes in demographics. Part of the answer is helping local businesses keep their finger on the pulse of these changes – which may mean reworking their product mix and repositioning their stores to meet a new segment of growing demographic. Commercial district managers can serve as intermediaries in this effort, sharing important market and demographic information via newsletters and/or regular presentations to business owner's where critical information and market data can be shared and used to grow retail sales.

Opening new businesses is yet another challenge, made more difficult by some of the very typical problems that businesses face in communities across the nation. Below are some of the challenges cited by business owners in the NYTimes article, coupled with a few suggestions for how commercial district managers might help overcome them.

Difficulty getting banks loans and finding affordable financing. Can the commercial district manager identify non-profit lenders or government agencies who can provide financing where private banks cannot?
A lengthy and unpredictable permitting process. Small business owners are often cash strapped - and the longer the doors are closed with expenses piling up and no revenue coming in can cripple a business before it is even open. Can the commecial district manager, through existing relationships with governement officials or knowledge of the process, help facilitate permitting, or at least educate a new business owners on what to expect so that the process doesn't take any longer than it needs to? Can the commercial district management entity and it's board of directors advocate for a streamlined permitting process to help small businesses?
Deciding what merchandise mix makes sense for a neighborhood means knowing the community. As one business owner asked “The big question for us is, are people going to buy a $100 frame or a $300 frame?” Can the commercial district management entity commission regular marketing studies and share this data, and an analysis of how to interpret and act on the data, with local business owners?
Help managing the vagaries of community approval, including in community resistance to a liquor license, slowed opening of a restaurant by months and added significantly to legal costs. Can the commercial district manager, who likely has cultivated a good relationship with community leaders, help anticipate challenges to permit requests and thereby help the business prepare adequately for public presentations and meetings?

These are just a few ways in which commercial district managers can help grease the wheels of economic development in the district. We'd love to hear other suggestions from our readers.

The Seeds of Trendy Districts

2010-10-25T12:06:00.000-04:00

A colleague just sent me this must read piece in Crain's New York called "Musty Streets Now Hot Strips". These great images tell the story of once seedy districts that have all turned the corner towards 'cool'. Here are some of the elements that helped seed the beginning of these great commercial district turnaround stories...

Food First:
"Fashion follows food,” says Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail leasing and sales division. “These are the [two] that add the sparkle that creates the buzz and excitement.”

Cheap Rent:
In almost every case, these districts saw a confluence of low rents and landlords willing to make deals. Low rents allow small business owners to take risks they otherwise would be unable to take in other locations. The challenge is often how to maintain affordable rents once the area has become a hot destination.

Proximity to a Cultural Draw:
In more than one case, the proximity to cultural institutions and events helped ensure steady traffic among potential patrons. When entrepreneurs see growing demand for complimentary goods and services, low rent allows them to pounce.

A Growing Residential Population:
A growing residential population is not only a source of customers, but in some cases a source of local entrepreneurs as well.

Merchants Giving Back and Building Loyalty:
A local merchant community that is connected to the local residential community is also a good sign (in one case, local merchants helped put together a fundraiser for a local school). This helps to reinforce customer loyalty and suggests that excellent customer service is an expectation, not an afterthought.

Resources: The CDA Facebook page is a great resource for images of commercial districts from around the nation. Check out the album for Fort Greene, Brooklyn, one of the districts covered in the Crain's article. Consider sharing pics of your own district!

Tenant Mix Can Make or Break Your District

2010-10-19T10:54:00.000-04:00

Today I share with you the cautionary tale of Atlas Park in Queens, New York, a promising outdoor mall that is now in bankruptcy proceedings. Although a mall, the lessons here are important to commercial district managers, who often overlook the importance of tenant mix to the overall success of their districts. They focus instead on marketing, promotional events and improving the public realm – all important elements of a commercial revitalization strategy - but at the end of the day, even when all of those elements are in place, the wrong tenant mix can make or break a district.

What Happened to Atlas Park?
The Shops at Atlas Park was built in 2006 as a high-end, open-air mall located in a decidedly middle-income neighborhood in Queens, NY. In the beginning, management likely targeted high-end stores in the hopes of differentiating the mall from nearby malls with a more workaday appeal.

When it opened, expectations were high. The mix included an eight-screen Regal movie theater, and high-end retailers Jos. A. Bank, Florsheim and J. Jill, as well as a gourmet specialty food store. As a resident of nearby Jackson Heights, I was excited to discover Atlas Park. The landscaping and aesthetics, including a beautiful outdoor plaza with lush landscaping, were like something out of a movie set. On our few excursions, my husband and I were pleased to see live outdoor music performances and a small carousel for the kids. We looked forward to visiting again and enjoying outdoor dining during the warm months. But our excitement quickly soured when we realized that besides food, there was nothing else there for us. The shops missed the mark – they seemed to be targeting a crowd that didn’t reflect the reality of who their shoppers really were. Every time we visited Atlas Park, we saw more and more vacancies. As attractive as the shopping center was, there wasn’t enough interesting retail to keep us window shopping, much less buying, for more than 20-minutes. Not good.

Today, the shops are in bankruptcy proceedings. The vacancies meant that the owner couldn’t keep up with his debt service payments, and according to recent news articles, the new owners are desperate to reposition the property with a whole new tenant mix more in keeping with the local resident demographic. A recent article in Crain’s Business [Queens mall is getting re-stored: Shops at Atlas Park, far too upscale for workaday Glendale, will start over again] quotes a local community leader Gary Giordano as saying “some of the thought process was that these would be high-end stores”…”but they're in a middle-income, working-class neighborhood. I'm not sure there's much of a demand for those types of stores there.”

Although it’s not quite possible to ‘start over’ when you don’t own or control properties in your district, the message here is that you can’t underestimated power of tenant mix to make or break your efforts to improve your commercial district. And while more challenging, it is in fact possible to influence tenant mix through a variety of strategies. For example, my firm is currently working with a Business Improvement District to execute a leasing and retail plan we helped devise. We took a good look at what the district was already known for, identified the market dynamics and likely shopper profile, and defined a strategy to position the district as a destination for great ethnic food and, interestingly enough, a good selection of home goods stores. Today we are working together with a few key property owners who have bought into the concept, and have begun to identify and reach out to a set of qualified prospects that will help round out and improve the retail categories and tenant mix we have already identified. This level of proactive tenant recruitment for private properties is sophisticated and a bit unusual – but is a critical component of driving retail sales and increasing shopper visits to the district – something that will help all district businesses in the long run.

Tailoring Merchandise to Meet Local Demand

2010-10-18T15:54:00.001-04:00

It should come as no surprise that even a successful department store like Macy's is still learning and implementing what many would consider a lesson from 'Retailing 101'. ["With Stores Nationwide, Macy's Goes Local: The big department store chain lets each store cater to local tastes", Bloomberg Businessweek]

Recently, Macy's announced that it would begin working more closely with its stores to allow managers to more closely tailor store merchandise to individual markets. For those of us working in urban markets - the failure of many national retailers to meet the needs of the local market is legendary, and sometimes humorous. I have heard stories from corporate executives themselves about how their stores are sometimes off the mark when it comes to meeting the demands of local clientele. Take the Payless Shoe store on 125th Street. Payless executives had high hopes for the store when it opened. They thought they had done their research. They hired bilingual staff and had bilingual signage to attract what they believed was the core customer base. When the store was not meeting sales projections, no one could understand why...that is until they visited the store. The local clientele was primarily African-American, and while the store was located close to "Spanish Harlem", in New York, a few blocks can mean skewing towards a completely different type of customer. When Payless took these differences into account and changed their tactics, store sales started meeting expectations. I love this story because it exemplifies the challenges that national chains face, despite their deep pockets, and the opportunties that local retailers have if they pay close attention to their customers. Nothing beats a deep knowledge of the market and the ability to give customers exactly what they want, when they want it, at the right price point.

The Best Chains on Main: Deadline Extended to December 1st!

2010-10-11T12:36:00.001-04:00

The Commercial District Advisor, in partnership with LISC MetroEdge, is still accepting nominations for the ‘Best Chains on Main,’ a nationwide competition that seeks to recognize those chain (and chain franchise) businesses that are making their urban business districts better places. Not only do they provide excellent service and maintain clean and attractive stores, storefronts and merchandise displays, the ‘Best Chains on Main’ help other businesses by attracting customers and contributing positively to the overall shopping environment. These quality businesses have a strong positive influence on how their neighborhoods are perceived, how safe people feel, and whether residents choose to spend their dollars locally. In particular, we are seeking chains that do not shy away from investing in more challenged business districts that other retailers typically avoid. These stores have a ‘chain effect’ on the neighborhoods they serve and help form the foundation of healthy and thriving commercial districts nationwide.

Help us Find and Recognize Great Businesses!
Nominated businesses will be judged on the following criteria: Exterior Appearance, Interior Appearance, Customer Service, Willingness to Locate in Low- and Moderate-Income Communities, and Donation to Local Causes. Nominations for both smaller regional chains as well as national chains are welcome. Franchise chains are also eligible. To be nominated, a store must have at least two locations.

To nominate a business, simply click here! For your nomination to be complete, you must also submit two or more pictures of the business that show it at its ‘Best.’ Photos can be sent to us at mrao@larisaortizassociates.com with the subject line, ‘Best Chains Contest Photos.’ Nominations will be accepted until Wednesday, December 1st.

A Top Notch Panel of Judges
Submissions will be judged by an expert panel of retail, real estate, design, and economic development professionals, including:

Cynthia Stewart, Director of Community and Government Relations at the International Council of Shopping Centers (ICSC), the global trade association for the shopping center industry.
David Bodamer, Editor-in-Chief of Retail Traffic, the nation’s leading business-to-business publication on retail real estate trends.
Jeffrey Finkle, President and CEO of the International Economic Development Council, the world’s largest membership organization serving the economic development profession.
Ken Nisch, Chairman of JGA, one of the nation’s leading retail design, brand strategy, and architectural firms.
David Feehan, President & CEO of Civitas Consultants, former President of the International Downtown Association (IDA), and editor of “Making Downtowns Work.”
Joe Getz, Principal of JGSC Group, downtown retail consultants.
Jake Cowan, Business Manager at LISC MetroEdge, the nation’s pioneering urban market research firm located at the Local Initiatives Support Corporation.

To download the press release for this competition, please click here.

In-Fill is Hot!

2010-10-06T12:02:00.000-04:00

Everywhere I turn these days I read about retailers and developers 'discovering' urban markets. ["Developers, Retailers Focusing on Infill Areas," The Arizona Republic]. For those of us working in these communities for over a decade now, the opportunities were always there. We called these placed 'underserved', or in the case of grocery stores, 'food deserts'. So it's exciting to see communities with higher densities now seeing interest from retailers and developers who frequently overlooked these neighborhoods, citing safety concerns, too few customers, lack of purchasing power and high construction costs as impediments to development. What those of us in the field always knew is that density equaled buying power, and while national retailers often eschewed these locations, regional chains were often gobbling up real estate and doing very well - albeit under the radar. Now that the big guys are interested...I wonder how the dust will settle.

Walmart Seeks Aggressive Growth of Smaller Stores in Urban Markets

2010-09-22T15:06:00.001-04:00

More and more retailers are seeing sluggish US growth and beginning to tap opportunities in urban markets - markets that have previously gone underserved. Hold your breath...Walmart is now among them. (Wal-Mart to Aggressively Roll Out Smaller Stores). The national retailer seems to "scouring" urban communities looking for spaces of less than 20,000 sf - a far cry from their typical protype of around 150,000 sf. Their recent small prototype is called "Marketside" and includes a focus on fresh food. According to the article, there are now four of these prototypes and they average 15,000 square feet each. It seems Walmart isn't letting "Fresh and Easy" (a 15,000 sf grocery store developed by British-based Tesco, the third largest retailer in world) get away without a run for its money. Another Walmart prototype called "Neighborhood Market" includes a mix of food, pharmacy, beauty, etc. in about 42,000 square feet.

Watch out for more retailers trying to tap underserved urban markets. This Friday Target plans to detail it's own urban strategy...I'll be sure to keep you updated!

Great Professional Development Resources (some free!) for Commercial Revitalization Newbies

2010-09-22T10:20:00.000-04:00

There is no single path that leads to a career in commercial district revitalization. People end up in this field from a myriad of backgrounds. As a result, practitioners may come from marketing, communications, urban planning, or law, to name a few of the more common ones. So how do we make sure that these commercial district management professionals all speak the same language and have the tools and information necessary to achieve results? One of our goals at the Commercial District Advisor is to support the creation of a nationally recognized certification in commercial district management – but we recognize that is a long term goal. In the meantime, what do you do if you are a ‘newbie’ to the field. What are the best books and articles that can help you get started? I’ve compiled a few books below (some of which are available for free on-line) as a starting point. But readers should be sure to share their own favorite books. ..

LISC Commercial Markets Advisory Service, “Commercial Revitalization Planning Guide: A Toolkit for Community Based Organizations”. This is probably the best free resource out there. It is a basic “how-to” manual for practitioners based out of community development organizations. The manual includes practical step-by-step instructions and a good set of document templates for use.
Fannie Mae Foundation, “Revitalizing Commerce for America’s City’s”. The author, Karl Siedman, is a professor/practitioner based at MIT. Karl is also my go-to guy on economic development policy for commercial revitalization. What I appreciate about this book is the recognition that a single framework for successful commercial district revitalization is elusive. Karl defines district revitalization efforts by four types of orientation: “development-oriented”, “retention-oriented”, “promotion-oriented” and “organization-oriented”. Knowing what kind of district you are can help you determine how to allocate resources more effectively.
“Making Business Districts Work” Ed. Feehan, Feit This book is a very good summary of the set of skills and information that newbies need when they start work in this field. Feehan was the former president of the International Downtown Association. Available via Amazon.com and other on-line outlets.
Larry Houston, "Business Improvement Districts". Larry Houston is one of the granddaddies of the field. While this book could stand some updating, it is a good basic read that withstands the test of time. Available via Amazon.com.

These are some of my favorite, but I'd love to hear other suggestions from readers...

Larisa Ortiz named one of the "Top 50 Urban Policy Wonk Bloggers" for The Commercial District Advisor!

2010-09-03T15:26:00.000-04:00

It's always good to get a smidge of recognition! Our editor and top blogger, Larisa Ortiz, was just named one of the Top 50 Urban Policy Wonk Bloggers by The Public Servant blog. She's in great company. The list includes other good bloggers that you should definitely check out.

New Resource for Town-Gown Issues

2010-09-01T11:36:00.000-04:00

I just heard about an interesting new resource for communities trying to build relationships with their local educational institutions. The International Town-Gown Association was recently started by Clemson University and looks to be a good (and hopefully growing!) resource for commercial district practitioners. The site includes information best practicies and information that looks very promising.