Thursday, January 31, 2008

Chain Stores

After our discussion last week regarding the live/work developments at Santana Row and Emeryville, and the retail development at 4th street in Berkeley, I continued to think about what it was resonates so poorly with me about these places. It is almost an unconscious, visceral reaction, when on paper these are the types of places that I would support – pedestrian friendly, mixed-use, safe, etc.

Beyond the issues of whether it is prudent building such development outside of existing public transportation infrastructure (at least, outside of bart/light rail lines), one of the other main problems I personally have with these developments are the domination of retail space by chain stores. On the one hand, I can see the benefit of such stores for developers and the general public. Given their pre-existing business infrastructure, I assume they are more willing to sign leases earlier in project development when compared to smaller retail. They bring a known quality to a retail environment – both consumers and developers generally know what they are getting. And often, they bring in consumer options that are cheaper than locally owned retail. Perhaps most importantly, chain stores seem to dominate the American retail market – perhaps it is naïve to advocate against them.

On the other hand, politically-active residents in Berkeley generally advocate against them and I can understand why. If we want Berkeley to be reminiscent of Cambridge, Hayes Valley or SoHo (as Patrick Kennedy has advocated for), all of these places have a retail that is difficult to find elsewhere (though Cambridge is certainly changing). They become retail destinations across a broader region because they offer stores that consumers can’t find in their local strip mall. When I think about what I would want to see in the downtown, it is more locally-owned and unique retail. On this note, I think that the 4th street development has been fairly successful. With stores like Builder’s Bookshop, Margaret O’Leary and Papersource, the developers have provided some unique and local retail options.

For this week’s readings, I looked into the Berkeley code to see whether the city has enacted any zoning regulations or other policies to either prevent chain stores from locating in the city or to encourage local retail. From the Planning and Development departments “Economic Development and Employment Element” of the General Plan[1]:

The City has successfully used the Use Permit process and its zoning code to limit the encroachment of [chain and big-box] businesses that threaten the sometimes delicate balance in neighborhood, commercial, and downtown areas. For example, the City used the Use Permit process to enable the Berkeley Bowl, a unique Berkeley grocery store, to relocate to a new, larger site in South Berkeley. Although the City is not able to govern business ownership types or establish zoning regulations that directly benefit Berkeley-"owned" businesses, the City does use other zoning strategies, such as limits on number of businesses of a certain type that can locate in a particular area. In addition, the City uses economic development programs, such as targeted business lending, to support local businesses and encourage new businesses that will serve local residents in underserved neighborhoods.

The “limits on number of businesses of a certain type” refers to a quota system established to preserve the balance in five retail districts in Berkeley, including the downtown.[2] The system maintains a rigid quota – if there are enough existing “restaurant” or “clothing stores,” then additional stores of that type are not permitted to locate within the district. This can prevent chain stores from moving in if “enough” retail to meet the quota already exists in the area. However, there is some evidence that the system hasn’t been effective. The Berkeley Planet and the Oakland have noted that the zoning ordinance has been selectively enforced,[3] and that the restrictions also make it harder for local businesses to stay afloat.[4]

It might be worthwhile to take a more in-depth look at this part of the zoning ordinance. Perhaps like the art district requirements, the quota system is contributing to the vacancy rate in the downtown. We might consider looking other options for promoting small-scale, locally owned stores, including strengthening the programs to provide loans to small businesses, increasing support of the “Shop Local, Shop Berkeley” initiative, further zoning restrictions on “formula business,” creating neighborhood-serving zones, and limiting the foot-print of retail[5] (It seems like Berkeley might already do some of these – we could see how well they are working).



[1] http://www.ci.berkeley.ca.us/contentdisplay.aspx?id=476

[2] The others are Solano, the Elmwood, Telegraph, and North Shattuck

[3] http://www.berkeleydailyplanet.com/article1.cfm?archiveDate=09-27-05&storyID=22403

[4] http://findarticles.com/p/articles/mi_qn4176/is_20070614/ai_n19288080

[5] http://www.newrules.org/hta/hta0101.htm

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