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Five keys to successful retail in a transit-oriented development
23 Mar 2011
By Robert Steuteville
Read More: http://newurbannetwork.com/article/five-keys-successful-retail-transit-oriented-development-14358
Five years ago, Fruitvale Village was a handsome mixed-use development adjoining a BART station in a modest-income section of Oakland, California. Yet for all its visual appeal, the project was encountering trouble in some respects. “More than 20 percent of our commercial office space was vacant cold shell,†and 5,500 square feet of retail (four of the 23 retail spaces) were unoccupied, says Jeff Pace, chief operating officer of the Unity Council, the development’s prime driver. Retail is the Achilles’ heel of some transit-oriented developments (TODs), as New Urban New reported in a December 2006 about Fruitvale Village.
Even today, the Village serves as a warning against counting on commuters to make the shops prosper in TOD projects — especially if the stores and eating places are not on a convenient pedestrian path between the transit station and the parking areas that many commuters use. But the 257,000 sq. ft. project, situated in a part of Oakland that’s about half Latino, offers insights into how the retail component can adjust. Between 2006 and 2009, the nonprofit Unity Council, through its Fruitvale Development Corporation, filled nearly all the vacant storefronts, Pace says.
From Fruitvale’s experience, Pace has found “there are at least five factors that lead to successful retail anywhere, but in particular at a TOD.†He identifies them as follows:
1. Location: “Retail needs to be where people are, unless you are building a megamall with box/department store/grocery store draws,†Pace says. “In a parking-restricted, walkable urban area, retail needs to be located near job centers, transit centers, or dense housing. Preferably all three.....
2. Density: “Retail needs to be supported by either dense housing or dense jobs (dense being relative to the amount of retail being installed), preferably both. While the dense housing piece is taking time here (for macroeconomic reasons), we’ve been very successful at filling the Village with people working, going to school, visiting community centers, or receiving community services.....
3. Don’t build too much retail too soon: “Everyone wants a lot of retail for the jobs, the sales tax, the small business opportunities. Retail doesn’t exist in a vacuum, however, but in the context of the center and the neighborhood. If you build too much, you’re either going to have vacant space or under-performing tenants, or both.....
4. Mix retail and services: “We evolved from a pure retail strategy on the ground floor to one with a mix of traditional retail and community and professional services. For example, we have a State Farm insurance office, and our children’s counseling clinic and high school both have ground-floor facilities as well as second-floor facilities.....
5. Recruit quality retailers: “Our first crop of retailers included some home runs and a lot of strikes. Fifty percent of our original (2004) ground-floor tenants are still here and thriving. Twenty-five percent of our ground-floor tenants are expanded community services. Twenty-five percent are new retail tenants since 2006-2007. Our well-documented early problems in 2004-2006 were with warm bodies we had signed up in 2004 who weren’t necessarily ready to operate a successful small business in a new mixed-use project.....
23 Mar 2011
By Robert Steuteville
Read More: http://newurbannetwork.com/article/five-keys-successful-retail-transit-oriented-development-14358
Five years ago, Fruitvale Village was a handsome mixed-use development adjoining a BART station in a modest-income section of Oakland, California. Yet for all its visual appeal, the project was encountering trouble in some respects. “More than 20 percent of our commercial office space was vacant cold shell,†and 5,500 square feet of retail (four of the 23 retail spaces) were unoccupied, says Jeff Pace, chief operating officer of the Unity Council, the development’s prime driver. Retail is the Achilles’ heel of some transit-oriented developments (TODs), as New Urban New reported in a December 2006 about Fruitvale Village.
Even today, the Village serves as a warning against counting on commuters to make the shops prosper in TOD projects — especially if the stores and eating places are not on a convenient pedestrian path between the transit station and the parking areas that many commuters use. But the 257,000 sq. ft. project, situated in a part of Oakland that’s about half Latino, offers insights into how the retail component can adjust. Between 2006 and 2009, the nonprofit Unity Council, through its Fruitvale Development Corporation, filled nearly all the vacant storefronts, Pace says.
From Fruitvale’s experience, Pace has found “there are at least five factors that lead to successful retail anywhere, but in particular at a TOD.†He identifies them as follows:
1. Location: “Retail needs to be where people are, unless you are building a megamall with box/department store/grocery store draws,†Pace says. “In a parking-restricted, walkable urban area, retail needs to be located near job centers, transit centers, or dense housing. Preferably all three.....
2. Density: “Retail needs to be supported by either dense housing or dense jobs (dense being relative to the amount of retail being installed), preferably both. While the dense housing piece is taking time here (for macroeconomic reasons), we’ve been very successful at filling the Village with people working, going to school, visiting community centers, or receiving community services.....
3. Don’t build too much retail too soon: “Everyone wants a lot of retail for the jobs, the sales tax, the small business opportunities. Retail doesn’t exist in a vacuum, however, but in the context of the center and the neighborhood. If you build too much, you’re either going to have vacant space or under-performing tenants, or both.....
4. Mix retail and services: “We evolved from a pure retail strategy on the ground floor to one with a mix of traditional retail and community and professional services. For example, we have a State Farm insurance office, and our children’s counseling clinic and high school both have ground-floor facilities as well as second-floor facilities.....
5. Recruit quality retailers: “Our first crop of retailers included some home runs and a lot of strikes. Fifty percent of our original (2004) ground-floor tenants are still here and thriving. Twenty-five percent of our ground-floor tenants are expanded community services. Twenty-five percent are new retail tenants since 2006-2007. Our well-documented early problems in 2004-2006 were with warm bodies we had signed up in 2004 who weren’t necessarily ready to operate a successful small business in a new mixed-use project.....