The application to change the zoning for the pad adjacent to Target reignited a debate of sorts about the impact of Target. The Vanguard is at least attempting to get the city to quantify a notable shift from retail to restaurants and more entertainment-oriented commerce in the downtown over the last six years.
We came up with five pretty recent ones, plus a number of longstanding retail businesses that left for whatever reason. However, it is not clear just how much of that is based on Target and how much is the economy and shifts in the economy. After all, the bookstores leaving have as much to do with the shift of how people buy books or no longer buy books.
The two stats that need to be borne in mind are the drop of monthly shopping trips to the Davis Downtown, which is 9.09 percent, and the drop in shopping trips to neighborhood shopping centers – down 21 percent which is tremendous and potentially devastating.
Some have put the blame on the downtown itself, suggesting that the buildings are in disrepair, have been neglected; owners have failed to make upgrades and improvements over the years.
They point to political problems as well, protecting downtown, blocking retail elsewhere in town, giving property owners in the core a virtual monopoly on retail rental space.
As they note, this has allowed for high rent and demands on tenants to pay for improvement and upkeep.
If that is the problem, then we can look to the loss of RDA (Redevelopment Agency) money in that light. The city will no longer be able to pump money into major redevelopment in the city core – at least until the state figures out some new and scaled down version of RDA.
But I am far from convinced that this is the correct assessment. After all, we have seen some innovative new development in the downtown – however, little of that ended up being retail, other than the AT&T Store.
Why is it that the current configurations have allowed restaurants and entertainment to thrive in the same dilapidated downtown that will not allow retail to thrive?
The problem goes a lot further than a simple unwillingness on the part of the businesses, the government leaders and the community to redesign the downtown.
The real problem is that it seems like our downtown is incompatible with modern retail – a trend that I find most unfortunate.
Think about where most people these days buy their retail, non-grocery products. You go to a big, nationalized chain department store, a national specialty store, a big box, or the internet.
In most ways this is not the best model for local economic development because more city cores are small and not amenable to the square footage that these types of businesses require.
As we have noted, local businesses tend to employ local people to work, they put their money in local banks, and they buy their products in local stores. That not only keeps the money local but it allows for a multiplier effect.
Target takes more money out of the community than it puts it. Sure, there is the sales tax revenue, but for the most part the products are purchased from out of the area and shipped here, the money goes to their corporate offices, it goes to banks outside of the area, few of the upper brass live locally, and therefore very little money stays here and the multiplier effect does not happen locally.
Other communities have added retail on the edges of town to the clear detriment of the internal core. Two clear examples are Woodland and Vacaville, which have high vacancy rates in their downtowns as a consequence of building new retail developments elsewhere.
Arguments against this point conflate the issue, which is not retail sales per capita, but rather effective land use policies.
Moving forward are a number of questions. The easiest thing to do is to follow the trends. Most communities have succumbed to the allure of big box and peripheral retail development. Many have seen their urban core erode. Some of those eroded cores have become blight and problems.
Perhaps Davis is fine with an approach that sees the downtown as largely an entertainment and dining hub with some fine restaurants that can attract people from throughout the region.
To be sure, there are cities that I would come to in order to eat, but I’m not sure Davis is yet one of those places.
If, on the other hand, we want a more mixed and balanced core, then we have to be innovative. Without redevelopment, that means innovative while getting business owners and businesses to come on board and invest.
The city has engaged the green guru to look at economic development. I know most of the city’s focus has been on the creation of high tech spinoffs and working with the university, but most of that will not produce the types of point of sales revenue that the city needs to build its sales tax base.
I thought it was a lazy mistake to go for the quick fix of Target to stop sales tax leakage. I think that is a way of the past, actually, that will become obsolete. It is wasteful, and it captures some sales by cannibalizing local business that would actually produce a greater return for each dollar they bring in.
And it’s wasteful in a global way that we are trying to buck. In the end, investing in good strong local retail that is economically and environmentally sustainable might be the way to go. But it is going to take commitment and resolve to get there.
—David M. Greenwald reporting
For all I know, brick-n-mortar retail is going the way of the dodo. But how do you explain the fact that billions are still being invested into retail businesses and developments? Indeed, there were at least 3 experienced, urban, infill developers seeking to develop mixed-use properties in Downtown last year? One of them was on the verge of spending money on preliminary architectural work until the City backed out of it’s preliminary commitments to construct the needed parking.
There are many ingredients necessary to create and foster a successful shopping district. The 2 most elemental ingredients are shoppers with spending power and retailers providing the desired goods. Does the Downtown have enough of both? If not, what needs to be done to correct the deficiency(ies)? These same questions need to be asked of our struggling neighborhood shopping centers.
-Michael Bisch
I would be interested in knowing how Davis Ace is doing. If they are doing well, they might serve as a model for other commercial developments.
Davis Ace is the model that Target followed. They each developed and own their facilities outright. This is not a model that many others are capable of following in this era in an urban environment, expecially not with the myriad of Davis development hurdles (among them political).
-Michael Bisch
I have rarely found anything in a retail store downtown that I couldn’t get for half the price somewhere else and without the parking problems. Downtown retail seems to be to be woefully out of touch with what people want and need. I honestly don’t know how that could be corrected without letting some chain stores in.
What’s prohibiting some chain stores from coming Downtown?
-Michael Bisch
“but most of that will not produce the types of point of sales revenue that the city needs to build its sales tax base”
Basically car sales and warehouses, right? Is there any model out there where “green development / enterprise” has brought in a significant amount of sales tax?
Land is too expensive in Davis to generate a good sales tax base, except maybe in South Davis. Luckily the citizens of Davis know that without more sales tax, they have to tax themselves, and seem willing to do so.
I suggest that the city council address and take action on the parking situation in downtown first, then assess the neighborhood shopping centers to determine (1) the impact of Target, and (2) the needs of those sites and how they can be helped. Mark West may be right: looser zoning and less micromanagement may be appropriate (I actually don’t know, since I haven’t seen the development agreements governing those centers.
Then, and only then, would it be appropriate to loosen the zoning for Second Street Crossing.
That means the council has to communicate with the business owners and property owners downtown, and also with the neighborhood centers’ owners. It means there has to be a retail business strategic plan for the city that conforms to the General Plan and involves all stakeholders. What we have right now is an ad hoc process: someone proposes something, another group blocks it, and now a developer seeks a specific change for one site — all without any overall strategy in place.
David wrote:
> As we have noted, local businesses tend to employ
> local people to work, they put their money in local
> banks, and they buy their products in local stores.
> That not only keeps the money local but it allows
> for a multiplier effect.
I have not asked any Target employees where they live, but I’m pretty sure Target does not fly them in from China and that the percentage of “locals” working at Target is similar to most “local” businesses…
> Target takes more money out of the community than it
> puts it.
This is true for 99% of all retailers. Davis does not have a huge manufacturing base so almost all retailers will buy the things they sell from outside the area and take “most” of the money they get from selling the items and send it out of the area to pay for the items.
I’m a fan of small locally owned business, but one thing that a lot of people forget is that the state will get most of the sales and income tax it is owed from Target and other big national chains while getting maybe half what is due from most small retailers (not to pick on bars, but in my years in the restaurant and bar business very few owners declare and pay tax on most if not all the cash they take in). Of all the small family owned business I have knows there always seems to be someone doing some work for cash under the table, while I bet that not many people at Target or Starbucks are working for cash (and not paying taxes)…
[i]”while getting maybe half what is due from most small retailers”
[/i]
Your insinuation that small retailers are cheating on their sales taxes is flat out insulting. “Maybe getting half what is due”? Give me a break.