New urbanist retail gathers momentum

Until very recently, retail has been a mostly unrealized dream of the New Urbanism. The promise of integrating residential and commercial uses is an essential ingredient in the recipe for traditional neighborhood development (TND), but few new urbanist developers have had enough households or deep enough pockets to gamble on larger-scale retail centers. New Urban News’ first comprehensive look at retail development reveals that the dream is beginning to come true. We identified 28 projects with significant retail in various stages of completion, 18 of which already have more than 15,000 square feet of retail space built. A few established projects, such as Seaside and Mizner Park in Boca Raton, Florida, have had a strong retail presence for more than five years, but most of the other developments on the list have been built in the last two or three years (see table page 5). With this flurry of activity, the New Urbanism enters a crucial phase, a time when the viability of mixed-use neighborhoods will be put to the test. New urbanist retail expert Robert Gibbs predicts that some of these first-generation retail centers will fail either because a sufficient market does not exist or because the centers are not planned in accordance with conventional rules of retail (see interview on page 10). It is too early to make any overall assessment about how well the new retail developments work, both in terms of their financial viability and in terms of their ability to create lively social environments. New Urban News’ informal survey presents a varied new urbanist retail landscape where no single development formula applies and where several trends are at work simultaneously. Emerging town centers The most prominent trend is the growth in town centers, ranging in size from approximately 15,000 square feet all the way to 600,000 square feet of retail space. A prime example is Market Square in Gaithersburg, Maryland, which connects to both the nearly completed TND Kentlands and the newer Lakelands (see page 7). At completion, Market Square will have 250,000 square feet of retail space, all in single-use buildings. Most of the project is built and leased. Developer John Beatty explains that the decision to not build apartments above the retail was made because apartment buildings were already nearby and because Kentlands’ master plan envisions the retail area as a “gateway” center. The town center along High Street in McKenzie Towne in Calgary, Alberta, also employs a single-use model in which some buildings have two stories and others are fitted with 1 1/2-story facades. Bill Bird, a development manager at Carma, the developer, says market research indicated that people wanted to live near, but not in, the commercial center and adds that the potential conflict between commercial and residential parking also caused the developer to avoid mixed-use buildings. Seven buildings on both sides of the street have been completed, totaling more than 90,000 square feet of retail space, 84,000 of which have been leased. Two more buildings with 16,000 square feet of retail are under construction. High Street opened for business in the summer of 1999. The bulk of the parking is placed behind the buildings, although diagonal parking on both sides of High Street creates a fair number of spaces out front. Among the 17 stores on High Street are a health food store, a liquor store, a bank, a coffee shop, and a pub. “Our strategy has been to find recession proof tenants for the town center,” says Bird. “Malls can provide the higher end goods that are more subject to economic fluctuations.” At the termination of High Street is one of the biggest grocery stores built in a TND, the 37,000 square foot IGA Garden Market which opened in April, 1999. IGA’s customer base includes not only the 3,000 residents of McKenzie Towne, but also the approximately 15,000 people living in the adjacent town of McKenzie Lake. As of September, the supermarket was not yet operating with a profit, Bird says. One of the latest town centers to open its doors is in Orenco Station, a transit oriented development (TOD) in Portland, Oregon. The one-block main street area has a distinctly urban character, with three mixed-use buildings facing a major thoroughfare and a series of live-work town houses oriented to quieter residential streets and a town park at the termination of the main street. The three-story red brick buildings have shops and restaurants on the first floor and loft apartments above. The live/work units feature work spaces on ground floors slightly below street level. The first 15,000 square feet of retail were officially completed in late October, but several restaurants, a Starbucks, and a wine shop were already in operation before that. “All the businesses, except for Starbucks, are locally owned,” says Bob Boileau of FFA Architects. Town center by arterial In Orenco Station, as in Kentlands, McKenzie Towne, and a growing number of TNDs, the town center is located near a busy, arterial road, a positioning that some experts consider essential to the viability of the retail. “We’ve been able to get an over-abundant amount of restaurants and amenities,” says Boileau, adding that Orenco Station “has great visibility from a retail point of view.” In Kentlands, locating the “town center” near a busy street meant placing the center on one side of the project, an increasingly common design pattern for TNDs. Even the best planned transit oriented and pedestrian-friendly developments are likely to depend on traffic flow for the viability of retail. Gibbs suggests that a retail center needs at least 25,000 cars passing by it on a daily basis to attract enough customers, and even small neighborhood stores should be located near a major vehicular entrance point to a new urbanist project, he says. The corner store hangs on Despite the growth in town centers, the corner store remains an important initial amenity in many new urbanist developments. “You don’t have much of a place if you don’t have a store like this,” says Robert Kramer, developer of Haile Village Center in Gainesville, Florida, referring to the project’s 1,200 square foot Village Market. The store has not had an easy road to success, however. One independent proprietor failed soon after the store opened in 1996, and sales still lagged after Kramer took over the management. Only when the market recently moved to a new location did sales rise 40 percent. “A lot of the success has to do with the store’s relation to the sidewalk and the visibility,” says Kramer. “From the street you can see people behind the counter.” The profits are still not great enough to secure Kramer full market rent, but he expects the store to completely pay its own way soon. Several other neighborhood stores have faced similar struggles in sparsely populated TNDs. The 2,000 square foot market and cafe in Southern Village in Chapel Hill, North Carolina, sits in the middle of a residential neighborhood and has been through four operators since it opened in 1995. Bryan Properties subsidized the rent for three years and has charged rent on a sliding scale for the last year. Now that Southern Village has 600 occupied houses, “the store is doing the best it ever has,” says project manager Jim Earnhardt, adding that the new operator has become “a community character” whose presence helps attract prospective buyers. Despite the initial struggle, Earnhardt says he would build a corner store if he had to do it over again. “It showed the residents we were doing something different.” In Middleton Hills, a TND in Madison, Wisconsin, project manager Paul Brunsell considers running a neighborhood store part of the cost of doing business in a TND. Moze’s, the local store, was intended to be a full-fledged grocery store, but weak sales and food spoilage problems forced Brunsell to downscale it to a combination convenience/wine store. Nevertheless, Brunsell continues to support the corner store concept. “It helps lot sales and it gives people what you promised them,” he says. At least one corner store has been outright closed. Cathy’s Market in Belmont Greene, Virginia, has been turned into a residence after a new developer took over the project and declined to subsidize the store’s operation. A few neighborhood markets have found relative success almost from the beginning. Gooding’s market in Celebration near Orlando, Florida, benefited from the rapid growth of the town and also had the advantage of a chain store’s buying and distribution power. Modica’s Market in Seaside ran in the red for a few years, but the town’s growing popularity as a resort made Modica’s an important resource and destination for tourists. The trend in some newer TNDs is to build a combination cafe and convenience store or to build the two next to each other. A cafe draws customers to the grocery shelves, facilitates social interaction, and is easier to run profitably when few homes in a project have been completed. Such combinations are found in Avalon Park (Orlando, Florida), in Beachwalk (Michigan City, Indiana), and in Civano, (Tucson, Arizona), among others. Developer Nate Bowman of Vermillion (Huntersville, North Car-olina) is bringing in a pizza pub first and a corner store later. “The singles who live in my town homes want a place to hang out more than they want to walk to a corner store,” he says. Store types Beyond coffee shops, other services such as barbers/hair salons, video stores and dry cleaners have proved popular and viable choices for new businesses in TNDs. Such businesses respond to residents’ daily needs and encourage repeat visits. In Harbor Town in Memphis, Tennessee, the laundry and grocery have been consistently successful, whereas a book store had to close its doors. More upscale specialty shops work best in new urbanist town centers with high pedestrian and vehicle counts. New urbanist retail of greater density The growth in new urbanist retail has not just been in conjunction with TNDs. Some town centers have been constructed before surrounding neighborhoods were in place, while others have found success in or adjacent to downtown areas. In Mashpee Commons on Cape Cod, Massachu-setts, developers Buff Chase and Douglas Storrs transformed a conventional strip mall into a downtown core with more than 280,000 square feet of commercial space and residential units over the retail. The project’s steadily improving performance has attracted a full range of national, regional and local retailers. Abacoa Town Center in Jupiter, Florida, is another example of a mixed use district going up before a TND is built immediately around it. Of the planned 400,000 square feet of retail, 92,000 square feet are under construction in two or three-story buildings on the center’s main street, with apartments above the retail. The Town Center already has tenants committed for 70 percent of its retail space, the first of which will move in next spring. Mizner Park in Boca Raton, Florida, is one of the best-known and most successful new urbanist retail developments. The project has a density five times higher than the rest of the city and a mix of large and small retailers, restaurants and entertainment venues. JoAnn Root, marketing director at Crocker Realty Trust, the developer, says Mizner Park serves not only locals but also attracts a large number of tourists for whom shopping is part of the vacation experience. Retail is also an important component in dense new urbanist development such as Pentagon Row in Alexandria, Virginia, Addison Circle north of Dallas, Texas, and Riverside near Atlanta. In Riverside, retailers and restaurants have found a lucrative niche market on the mixed-use town square which gets traffic both from residents and workers in the adjacent nine-story office building. This period of experimentation by designers and developers of new urbanist retail has resulted in a tremendous variety of new projects. Some of these have disregarded conventional retail rules and may pay for that in time. However, the New Urbanism now offers a range of models to study, not just for new urbanist practitioners but also for developers of conventional retail centers. New urbanists are leading the resurgence of main street retail by building environments where shopping becomes reconnected to neighborhoods and social networks.