Thursday, December 10, 2009

Ask the CarLess Guy Vol. III - Retail and a Homeland Marshall Plan

Recently I have received some questions within the comments section of recent posts, some were aimed at me, and others more general. I began to respond to them in the comments, but realized they might be better off here. Both questions regard retail success, one directed towards the one-way to two-way roads and the other is about chains vs. local retailers.
Question 1 - Reader Himanshu asks:
Philadelphia's downtown has one-way streets yet retail seems to thrive there. Walnut St is a great example. On the other hand, Market Street east of City Hall is two ways and yet suffers mightily. The issue is perhaps more complex than simply one-way vs two-way. I suppose overall street size, something you have discussed on your blog in the past, is also important. Walnut St almost feels like an alley compared to many streets in Dallas!
This is true. And, if memory serves South Street is one-way as well is it not? Either way, it's a very narrow street which is the point you are getting at. First things first though. With cities, complexity always rules the day making it virtually impossible to be both succinct and comprehensive, which is why I'm guessing very few people get cities on a very deep level. I mean, who really wants to read all of Space is the Machine, basically Bill Hillier of Space Syntax's grand 360-page manifesto of his life's work. Or, that everybody OWNS The City Shaped, because it looks so great on the bookshelf but who has actually read it? /Sheepishly raises hand in both cases.

Cities, if you buy the fractal nature of cities theory, which I do, are both infinitely complex, yet remarkably simple because there are so many factors participating and influencing each decision, yet the physical results are remarkably similar the world over. But, you are correct, it is not the ONLY determinant factor, but it is one of the critical ingredients that only help, not hinder.

The first thing RETAIL requires is CONVERGENCE, or to put it in the over simplified terms of an over simplified auto-oriented status quo, "access." By nature, a 2-way street will have more "convergence" or passersby than a one-way street and provide the increased locational predictability for the tenant, which I'll discuss later. The future of retail will require the convergence of streets, which one can see quite simply 2-dimensionally in a Baroque layout of streets as opposed to the Grid.

Let's take a look at Paris, DC and NYC as as gradated degrees of each to illustrate this point. First, Paris is one of the most obvious examples of Baroque planning and the creation of very obvious points of 2-D convergence. What this (and convergence) in general does, is that it creates very predictable and obvious points where the most people will be passing by, which is exactly what retail needs.

Next, we'll look at DC. Everybody is aware of the L'Enfant plan, but what many may not be aware is that the original L'Enfant plan was much more like Paris than the current iteration. The reason is because Thomas Jefferson favored a grid pattern because of the implied equality (or democratic nature) of each street, whereas Baroque planning creates very strong and clear hierarchies, a caste system of streets if you will, where certain streets will ALWAYS have prominence. The end result is a compromised hybrid where Baroque formality is overlaid upon a grid, kind of like a Republic rather than a pure mob rule Democracy. Rather fitting no?

Now lastly, NYC, and more specifically Midtown Manhattan which is predominantly a very rigid grid system, but with one key distinction of course. And that is Broadway. Not coincidentally where it intersects the grid at the most acute angles, it creates the most important spaces in the City, ie the crossroads of the world, Times Square, and very dramatic buildings, like the Flatiron building.

SunBelt Cities however, have similar systems except horrendously bastardized versions. In DFW, there is still a grid (mostly b/c the city is relatively flat and for the simplicity of real estate transactions/entitlement), but it is set on an approx. 1-mile square increment and there is a clear hierarchy of streets, ie the dendritic highway/arterial/collector/local system.

While we have talked ad nauseum about the chicken/egg feedback loop of road subsidies and suburban development, the facts on the ground today are that these are all designed STRICTLY for the automobile. And the Sisyphean goal of Level of Service 'A' streets and the supply-side nature of the solution to achieve that goal, have led to increasingly wider streets, which brings me to the next point.

Which is SYNERGY, and the key component to synergy is distance and complementarity of uses. To simplify the point, I'll reiterate what you said about the Walnut street being much narrower than a typical Dallas street. Cross-shopping is a key component in ambience in the creation of a destination of a place. People like getting all their shopping done in one place, but they also prefer doing it on a cool, interesting place composed of a variety of shops and experiences in one area rather than a mall (which is the 20th century version of a shopping street) or the one-stop shopping of a WalMart.

Mall developers and architects (disclosure: I used to work for the architects responsible for probably more malls than any other firm in the world), if they have a redeeming quality is the boiling down dimensionally of the shopping experience. By this, I mean every foot/every inch is understood for how far apart stores should be, how wide the Mall or "shopping street" should be to encourage wandering from one to the other, how far will people walk, or that a constantly deflecting axis makes people walk further as well as continually changing storefronts.

But, in the end, malls were still missing something, which has brought about their demise. And, IMO, this was due to the private, securitized, and "controlled" nature of malls (ya know, beyond the whole drive-in experience of malls).

The interesting irony here is that one-way streets are able to be narrower than a typical two-way street (duh, because it will have half the lanes), which is why Peter Calthorpe often compromises and creates one-way couplets as the key arterials through his plans. He does this to limit the distance to cross the streets and ensure that building uses can still interact with those across the street.

This was a by-product of DOTs only accepting very few and limited formulaic street types and widths. Fortunately, however, that is changing, because streets need to be context-sensitive and we shouldn't have to throw the baby out with the bath water. Narrow, two-way roads will typically be better for retail, and as part of a gridded road system allows for the traffic to be diffused, providing choice to the driver. (Note: this doesn't mean strict rectilinear grid. Intersections per square mile is generally a good guide for street/intersection density.)

The other part of convergence comes into play as well, and I'll call that 3-dimensional convergence. 3-D CONVERGENCE refers to multi-modal transportation and rather than just being in plan view, looking at street networks from above and pinpointing hierachies of cross-streets and intersections, this can be looked at in section. West Village in Dallas is a good example here.

If you looked at this area in section, you would see a subway running below 75, you would see a trolley running on the street, and you would see residential above the shops/restaurants. There is convergence created not just by McKinney/Blackburn/Cole/Lemmon and the exits from 75, but also by the transit stops, as well as residents WALKING down the stairs to the street. This is why West Village/CityPlace as well as (eventually) downtown, will be the primary retail areas within twenty years. As I wrote previously:
They are currently below the LoMac area which is a joke of tangled spaghetti arterials, deep setbacks, narrow sidewalks despite having nearby freeways and the MATA trolley line. This area is exactly the end result when getting the details right is paid zero attention and the only effort is to cynically deliver "product to the market" not places for people. This means that the value of this place is ultimately limited whereas in CityPlace and Downtown, it is infinite.
Lastly, the difference between your examples and nearly all shopping in the SunBelt is the nearby residential baseresidential base, which is the key difference b/w your examples and the majority of Dallas streets, the neighborhood and urban fabric remains largely in tact - which gets me to the next section...
Question 2 - Reader Peter asks
i'm still not all that clear on that 'local businesses vs. chains' study/argument. what is 'economic impact' and why does it matter? and if chains are so bad, then why is chain-hating SF in such bad shape? and what of this 'job growth'? what does that actually mean? anything? does it mean that if we let/encourage the opening of four independent stores instead of one big, box, we'll see more people hired? does that go on indefinitely or is there some equilibrium point?
The first answer is, unfortunately, very little retail, chains or mom and pops, are doing well, which is two-fold. First, we're out of fake money. Living off credit and second mortgages, etc. is over. The other part of that can be positive: we're at a transitional time.

I'm intuiting that "chain-hating SF" is that way, because 1) there is a long history of family-owned business, particularly restaurants in San Francisco. But, the key fact of the matter, is that with locally-owned businesses, a greater percentage of their money is spent within local communities. For example, if I own a shop that purchases widgets and doo-dads to make gadgets, the majority of my purchases (or my personal profits) are spent locally. I'll have to dig up the reports on this, but IIRC the % of revenue spent locally by chains vs. locally owned businesses was something like 40% to 90%. For example, all of WalMarts profits get electronically zapped in the middle of the night to Bentonville, AK, which then get redistributed to shareholders throughout the world.

The other issue is, while WalMart claims to bring in "new jobs," a congressional study released about ten years ago (and I'll have to dig this one up as well), stated that for every two low-paying jobs that WalMart "creates," they are really replacing three higher paying jobs. The math makes intuitive sense if you subtract all that money that gets beamed to Bentonville.

The problems with this are that people will 1) scream, "that's consumer demand," which is true...sometimes. I'm a full believer that WalMart is no monster, but rather a natural byproduct of the world we have constructed. The real question is do we wish to remain working for $5/hr and buying garbage goods in a miserable experience of a store? and 2) that at least for the time being, chains like WalMarts or Targets were necessary "anchors" to allow small, locally owned-businesses to succeed based on that synergy, particularly for downtowns or so the thinking went.

What the WalMarts and Targets of the world need to address, is can they continue their global supply chain business model in an era of $20/gal gasoline? I use $20 only b/c it is the title of a new book. The real point is that with increasing demand for oil (particularly from China, India, and Brazil) and stagnant or decreasing ability to supply at low cost, while oil producing countries are beginning to use more and more of their own oil (for example Mexico is a net importer for the first time EVER), there is no place for oil prices to go but way up.

The last point is that because of road building subsidies and sprawl and all that yadda yadda, we are a country that is spread too thin. Local governments don't have the tax base to support themselves, let alone pay for the upkeep, maintenance and proposed new infrastructure projects. Functioning, sustainable communities require a certain amount of density. Retail requires density as well, and moreso than density, they require locational predictability.

Because the residential base was smeared so thinly across the toasted SunBelt countryside, retail followed, spread as equally thin, meaning many stores than necessary - only chains w bare minimum profit margins AND extreme leverage when it comes to negotiating prices from suppliers - see WalMart, could compete. Mom and Pops 1 can't compete without being embedded in neighborhoods and their costs can be higher b/c they can't buy in mass bulk like chain.

As Lewis Mumford correctly saw in the 1950s we were constructing "anti-cities," and now we are at the point of reckoning for all the worthlessness we have wrought. We are all misplaced and it will take incredible leadership to pull this country into one concerted direction. Fortunately, I have a lot of faith in the Millennials once they fully exert their enormous power over the conflicted dichotomies of baby boomers.

A healthy community (at least for the time-being) will have both chains and locally-owned businesses, b/c chains will be able to pay the highest rents in the prime spots, ie the touristy areas, BUT, mom and pops as I alluded to with holes in the wall, are still viable, because 1) often supported by viral "word of mouth" (or twitter) they provide a better experience for the "consumer" AND they generally provide a higher quality product. Mom and Pops can succeed in dense urban neighborhoods because the consumer has choice. 2) they have a residential base within walking distance...they can be tucked away but still have the "rooftops" to support thier biz

As for job growth, I would be speaking for CoolTown Studios here, but I'm of the opinion that the only place for job growth is from entrepreneurs and startups. Yes, many will fail (especially because in the last ten years we have essentially stripped away all of the safety nets making the entrepreneurial spirit this country was built upon (ie American Dream), all too risky), but many others will succeed b/c so many needs/demands are not being met by the status quo, not to mention all of the talented people possessing innate entrepreneurism, feel so grinded down by the machinery of their corporate institutions.

The key to job growth and economic recovery is in education, job training, and startup businesses combined with a vast relocation and reconstruction of our cities into more dense, walkable, livable interconnected collection of diverse neighborhoods.

Look at it this way, we keep looking at the Stock Market as if it is some kind of indicator of recovery as it slowly inflates with federal subsidies. However, the market is full of Fortune 500 companies that have peaked in the 20th century economy and are receding due to the inherent flaws in corporatism. We're investing money in companies that have no choice but to shrink? When the power of global capital really needs to be put to work on main street rebuilding housing and teaching people how to run a business that could be set in the ground floor of that new building where the growth possibilities, when multiplied thousands or million times over, could borderline on infinite.

As Kunstler put it in Geography of nowhere our cities like Detroit and Dallas look far more like they experienced WW2 than do Dresden and Heidelburg, this may take a level of concerted effort along the lines of a Homeland Marshall Plan for housing construction and walkable infrastructure, but that makes a lot more sense than shoveling money at banks that have already burned us several times does it not?