Durable Growth

From today to TOD – retail

photo from the author

photo from the author

In a pair of recent posts (here and here), I wrote about the difficulties of integrating transit-oriented development (TOD) into communities that have a drivable suburbia slant.  The two previous posts addressed how providing parking for transit users can conflict with a desire for mixed-use development near a transit stop.  I also wrote about a transitional solution that the City of Petaluma hopes will provide a working compromise and the hurdles that the solution must yet overcome.

But parking isn’t the only element issue that creates transitional difficulties.  Some are even more intractable than parking.  Such as retail.

A favored vision of TOD enthusiasts, and of urbanists in general, is streetfront retail.  The image they evoke is of the communities of the 1930s in which our parents or grandparents were raised, with rows of locally-owned storefronts marking the downtown.

Consistent with this vision, ground floor retail, underneath residential or office space, is a key element in many urban planning codes and conceptual plans.

But three key elements have changed since the 1930s.  First, cars have become far more pervasive.  And we’ve constructed a world in which the incremental cost of car usage is so small that few feel constrained in how many miles they drive.

Second, drivable suburban development has met the retail needs of the car drivers.

Third, the internet is capturing an ever increasing share of retail.  About 18 months ago, a planner told me that internet sales were only about 3 percent of all retail sales.  When one considers that cars and food are among the largest sources of retail sales and that both are relatively immune to encroachment from the internet, perhaps the number was correct.  But it seems evident that the internet’s share of retail will continue to increase, perhaps even finding business models that can capture shares of car and food sales.

Many have rediscovered, or never forgotten, the value of shopping downtown for a handful of screws or a sheet of sandpaper.  But most, when looking for a new power drill or belt sander, will drive to a home improvement store or shop on-line.  And the absence of those big-ticket, big-profit items from downtown undermines the commercial viability of downtown retail.

Developers have long understood that cities were seeking more retail than the market could support.  I’ve worked on multiple projects where the space designated by the code as streetfront retail was given transitional titles of “live-work” or “interim residential”.  A commitment was given that the space would become retail as soon as the market could support it.  But no developer believed that change would ever happen.

Within the past week, an architect told me of designing residential space with 14-foot ceilings to meet a city requirement that the space be easily converted to retail at a later date.  The developer didn’t believe that the space would ever be anything other than high-ceilinged residential.

Perhaps most tellingly, a developer acquaintance recently tried to sell an entitled, but unconstructed, mixed-use project.  The potential buyers were consistent in their determination of the project value.  Approximately $35,000 per residential unit.  And no value for the streetfront retail.  Although the buyers would build the retail, they expected to discount rents significantly in order to keep the spaces filled.  So they couldn’t project any profits.  At least they weren’t considering retail a negative asset.

And if you need yet one more example, look at the vacant spaces in the Theatre Square project in Petaluma, especially in the locations away from the primary pedestrian routes.

The Petaluma Station Area plan met the problem head-on.  The team headed by Opticos Design of Berkeley that developed the master plan knew that retail would be dodgy.  Especially in a city that recently gave the green light to two drivable suburban shopping centers.  Not surprisingly, the Opticos team found that the market didn’t exist for retail along the full street frontages.

In the words of the Final Draft report, January 2013, “Retail cannot be supported at every building, but if the current conditions change such that more retail can be supported, the code should be sufficiently flexible to allow that use.”  (For those who are reading along, this is from page 3-17 of the Petaluma Station Area Master Plan.)

The effect is that the initial buildings, if they comply with the master plan, will have some retail, but not as much as would have been required under the current code.  Instead, much of the street frontage will be residential.   (Techniques such as stoops or small private gardens will be used to transition between the public space of the sidewalk and the private space of the homes.)

If retail conditions change, later buildings might include a higher proportion of retail.  Although I suspect that Target and Amazon will be actively working to prevent that possibility.  And will likely succeed.

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. – Dave Alden (davealden53@comcast.net)

Written by Dave Alden

Dave Alden

Dave Alden is a Registered Civil Engineer. A University of California graduate, he has worked on energy and land-use projects in California, Oregon, and Washington. He was also the president of a minor league baseball team for two seasons. He lives on the west side of Petaluma with his wife and two dogs. The blog that he writes can be found at http://northbaydesignkit.blogspot.com.

7 comments to From today to TOD – retail

  • Dave,
    I have really been enjoying your very articulate and well though out articles related to the Petaluma SMART Station Area. Keep up the great work!

    Dan Parolek
    Opticos Design

  • Dan, I’m just giving due credit to you and your team. I look forward to watching your recommendations proceed through the remaining steps. – Dave

  • […] Bay Area Shows the Path Towards Transit-Oriented Development (1, 2, 3, 4, […]

  • Part of the answer has to be thinking of and promoting types of businesses that will work in that situation. Businesses like restaurants, convenience stores, coffee houses, bars, and nail and hair salons can compete with the Internet and with suburban-scale retail, and commonly use those sorts of spaces. Mailbox / shipping centers and dry cleaners also are desirable and are more useful the closer they are to home.

    What other possibilities exist for retail uses that are either experiential, or hyperlocal? “Paint your own pottery” may be a niche, but niches like that can help build our local economies and help keep eyes on the street in these retail areas.

    • Aaron, thanks for writing. I have a local friend with whom I often exchange lists of the types of businesses that will survive a Target/internet world. Most of our ideas match yours, but neither of us had ever mentioned mail centers. That’s a great idea. And perhaps the expanded use of urban mail centers is a path for survival of the Post Office.

      Also, I’d expand your dry cleaner idea to include laundromats. If micro-units gain traction, then moving clothes washing out of the home will make sense.

  • Alai

    Thanks for the article– it makes sense. I do think it’s important to take into consideration how the internet and other developments will affect the need for retail space, and it’s smart to consider both how downtown retail was successful in earlier times, and what’s changed since then.

    A couple of comments: first, I think it’s just fine to build flex-space. If there’s one thing that cities and towns used to have, which is in short supply these days, it’s flexibility. Nowadays, zoning and planning and codes all work together to create a civic environment that’s incredibly inflexible, and that has real costs that are often not recognized. I think flexibility is a key component of an interesting, dynamic, and economically successful city. So I welcome flex spaces, even if they’re only used for residential for now.

    I do think parking (in the form of parking mandates) are key. If you require the retail spaces to provide parking, you may as well forget the whole idea, because they’re not going to be able to compete with the big box stores on the periphery. If you require every resident to buy parking, it’s also a blow to the local retail. One of the major advantages of local, walkable retail is that it can be used by residents who decide to forgo the expense of vehicle ownership and storage– to the advantage of both residents and merchants.

    • Alai, thanks for writing. I completely agree with you on both flex-space and parking. It’s a new world into which we’re stepping. And it’ll require new ways of thinking.