A few years ago I had the conversation, with business leaders in Davis, that the Davis community had opted against the peripheral mall route as a way to generate revenue. That was part of the early push for an innovation park on the edge of town as a way to translate university backed and funded research into private sector innovation – a process known as technology transfer.
Last summer, in a series of articles, we pointed out that Davis greatly lags in per capita retail sales and thus sales tax revenue. But, in a way, Davis may end up fortunate to have avoided the urban wasteland of “greyfields.” Still, Davis has not resolved its revenue problem and it now has its own share of vacant store fronts in the downtown.
A fascinating article in Atlantic CityLab gives us some food for thought.
As they point out, “The proliferation of half-vacant shopping centers and abandoned malls on the fringes of cities has become such a pervasive problem that we have a new word for it: greyfields.”
The article points out that the retail sector has lost around 30,000 jobs just in March, “with thousands of store closings projected through 2017. At this pace, store closings in 2017 are likely to surpass the Great Recession year of 2008.”
The meltdown has claimed both small independently owned businesses and once-powerful retail titans like Macy’s, JC Penney and Sears – which are all in the process of closing hundreds of locations. “As these big anchor stores lose their grip, so go the smaller ones. Without big names to bring in customers, mall and shopping center owners are finding their business model slipping away,” they write.
This appears to be an massive economic shift which threatens to upend local economies reliant on retail sales tax. The article notes, “E-commerce is booming, with a startling 50 percent of American households having an Amazon Prime membership. It’s the stores you have to drive to that are in trouble, reflected in rising retail vacancy rates in many metro areas.”
The article notes, “Some may find pleasure in the aesthetics of dead-and-dying malls, but they pose big challenges for the communities around them: Besides functioning as ugly, life-sucking border vacuums, defunct shopping centers represent lost tax dollars for cash-strapped municipalities.”
The article offers three ways that cities “could fend off the retail meltdowns in their midst.”
First, they suggest easing land-use restrictions, arguing, “In many cases, the greatest barrier to the redevelopment of these greyfields is self-imposed: The zoning simply won’t allow much beyond conventional big box retail.”
This likely doesn’t apply in a place like Davis that has, with one exception, avoided big-box retail. They note, “In many cases, you will find that arterial roads—those most likely to host greyfields—are zoned exclusively for suburban-style big box and strip-mall developments. These districts often require an ocean of parking and massive setbacks from the road while prohibiting common non-retail uses, including residential, light industrial, and occasionally even office space.
“The perverse result is that developers can’t turn these greyfields into the denser mixed-use developments that residents and city managers alike yearn for. Even without new development or rehabilitation, it is often difficult to repurpose old retail developments.”
Second, they argue to rethink economic incentives.
They note that, for decades, “economic development often meant using tax incentives and public resources to lure in large national retail chains, whatever the cost.”
At the time, at least for some communities, this made for a political perspective where the politicians could bring in a massive new mall or a Walmart, have a huge ceremony and signal to the voters that jobs were on their way.
But the downside is that “cities and towns gave out millions of dollars in tax breaks and free land, while building out roads and utilities on the edge of town. Given the massive amounts of public infrastructure needed for many of these developments, conventional suburban retail developments are often a drain on tax coffers in the long-term.”
They write, “Contrary to what many city officials may think, the lesson of the retail meltdown is not that we should switch from subsidizing brick and mortar retail to subsidizing e-commerce with the same old mixture of property tax abatement and free infrastructure. Rather, the lesson is that cities should be very cautious about plowing public resources into attracting specific firms. Today’s Amazon distribution center could easily be tomorrow’s dead mall.”
Finally, think corner stores, not big boxes.
They write, “For many city planners, the enormous size and stability of large-scale suburban retail developments were seen as strengths. After all, if everything goes according to plan, they make tax collection and regulatory enforcement easy.
“As the retail meltdown reveals, however,” they write, “these developments are far more fragile than previously anticipated. In dynamic urban economies, smallness, accessibility, and a high-quality experience are more important.”
Instead, they argue, “Unlike rows of interchangeable national chains on the edge of town, a more diverse ecosystem of small locally owned businesses can rapidly respond to consumer need while offering experiences that can’t be replicated through e-commerce. Policymakers should make life easier for entrepreneurs by keeping regulatory compliance as easy as possible.”
They conclude: “For cities that bought heavily into subsidizing large suburban shopping centers, this transformation of American retail will be painful. But the silver lining is that the meltdown might provide the impetus for city leaders to make desperately needed policy reforms. Keeping greyfields zoned for malls and strip developments isn’t helping anyone.
“Time has tested the subsidization of large retail developments in the name of economic development, and the results aren’t encouraging. More than ever, cities need to take the challenges that face small entrepreneurs and developers seriously. Easing the restrictions that city officials built around the status quo of suburban retail would be a great start. That half-vacant mall on the edge of town isn’t coming back. But if we get the policy right, it might be replaced by something far more valuable,” they write.
The nice thing is that Davis has avoided this meltdown just as it avoided the catastrophic housing market collapse and foreclosure crisis by smart planning. Now the city needs to take advantage of its positioning with the university to go to the next step and head into the next section of the economic model – economic development, technology transfer, knowledge-based economy, and the high-tech market.
—David M. Greenwald reporting
Your article was about retail, and none of this last sentence has anything to do with retail. The city needs to avoid policies that harm existing retailers.
I just met with an existing retailer who opined that they had no reason to invest in the City until it starts to grow again. The current growth is not sufficient for their needs. Probably not what Don has in mind with his quote.
This is the approach that created our deficiency in per capita sales tax revenues. In order to protect existing retail, we blocked the expansion of retail options throughout town thus reducing our ability to adjust to the changing environment. We also artificially inflated the value of land downtown such that when a long-term owner finally sold the new tax rate made the properties unattractive for tenants, leading to empty storefronts.
The City needs to develop policies based on the current best-practices for creating and maintaining vibrant, attractive, walkable shopping districts. This likely means changing zoning to allow for mixed-use multi-story buildings, not just downtown, but at all the neighborhood centers as well. Existing retailers need to evolve with the new direction. 1950’s thinking won’t cut it anymore.
David
I would suggest that “technology transfer” also is nothing new. We have been discussing this in Davis for at least five years ( or so) and that is long past when it was adopted in other areas. While I think that this will be good on a small scale for startups coming out of the university, I think that the larger model that you seem to favor may not be the “next new thing” that you foresee. There will come a time when the “innovation park” model will meet the same fate as the big box stores and malls. With the current rate of change, I suspect that may be sooner than later.
Nothing hurts our retail more than not having enough parking so that shoppers can transport their purchases home. The concept of reducing parking (particularly in the downtown) just reduces the number of shoppers due to the inconvenience of them not being able to park to get to the stores to shop, which in turn reduces sales, which reduces the yield of sales tax while also diminishing the chances of survival of what few retail stores we have left.
The only issue I would have is that the very retail that is failing is primarily malls and big boxes that are buildings surrounded by vast parking. The problem is that the world is changing and we are not adjusting to those changes. Why would I drive to the mall when I can get exactly the product I want for cheaper from my computer?
Eileen, in all the discussions I’ve read, here in the Vanguard and elsewhere, I haven’t heard anyone who has argued for reducing the existing parking in downtown. I’m not sure where you have heard a “reduce the current parking in Davis” argument? Can you help me out of that confusion?
David,
You actually are helping me make my point that since it is hard enough for brick and mortar stores to survive due to on-line shopping, we need to make what we are fortunate enough to have of a store you can get to when you need it. For instance, let’s say like my yard drip system has sprung a leak and I need the repair parts now, not in a few days by on-line shopping which also adds shipping materials and energy costs.
I cannot imagine what it would be like to not have a Davis Ace Hardware to get to in minutes. Also, when I need bark chips to help keep in moisture for my plants, I want to buy locally to not only keep the sales tax in town, but to avoid trucking in the same bark from Woodland (or beyond) to help reduce our carbon footprint.
My point is that we need to allow Davis Ace Hardware to have access to their store by providing nearby parking that will not cost their customers. Davis Ace Hardware is simply doing the logical and necessary action of providing the needed free parking for their customers.
Matt,
Yes, let me help you with your confusion. The point is that customers are far less inclined to go to a store where they will need to pay for parking to purchase goods, then going to a store where there is free parking. Davis Ace Hardware is simply trying to help their customers by providing the free parking that downtown customers will soon be denied by the City’s new parking policy to charge for parking in the City parking lot’s.
The outcome of the City’s new parking policy fees would only result in reducing sales at Davis Ace Hardware, but then, in turn also reduce sales tax to the City. So it is a lose-lose situation for Davis shoppers and the City.
So, fortunately, Davis Ace Hardware is taking action to try to compensate for this bad situation. Davis Ace Hardware has the good judgement and is willing to invest in providing the needed free parking that is being removed from them and other nearby stores who will also be negatively impacted. I for one, am grateful for Davis Ace Hardware for doing what they can to fix this problem.
Eileen, in all those words you haven’t answered the question, so I will re-ask it, ” I’m not sure where you have heard a “reduce the current parking in Davis” argument?
Other than the pocket parks in front of Burgers and Brew and The Lofts, where has the number of parking spaces in the Davis downtown been reduced?
Matt: You’re also not answering questions, at least from me. (For example, see other article, regarding Davis ACE proposal.)
To respond to your question, regarding “reducing” parking in Davis:
Some are proposing just that, via the elimination of “parking craters”. Also, some of those same “development-minded” folks don’t want to replace that parking on-site, NOR do they want to contribute to a fund to replace it elsewhere. Instead, they would prefer to cannibalize existing spaces (via restrictions on “who” can park there), without taking responsibility for the increased demand that they are creating.
Some (like you) are supporting that plan, to eliminate/restrict the ability of some groups to park in existing spots.
None of this bodes well for existing businesses.
Oh – and worse still, some have the gall to try to prevent a key downtown business from creating their own parking (again, see Davis ACE article, today).
And those same people claim to be pro-business (and have frequently submitted arguments regarding “private property” rights), while simultaneously stating that they are also concerned about “city finances” and the need to support businesses.
I find this deceitful and disgusting. I am not sure what their motivation is, but I suspect that it has to do with setting precedents, regarding parking related to redevelopment.
Eileen Samitz said . . . “The point is that customers are far less inclined to go to a store where they will need to pay for parking to purchase goods, then going to a store where there is free parking.”
That is your opinion Eileen, but is it an opinion that is consistent with the laws of microeconomics?
— I have been told by Davis Ace (on numerous occasions) that the typical customer visit duration for their customers is between 20-and 30 minutes.
— The current parking fee at the E Street parking lot, which City staff has confirmed averages a usage rate of 95% of capacity, is 50 cents per half hour.
— Is adding 50 cents to your bark chips purchase (currently either $4.99 or $5.49 per bag) going to cause you to seek out a different supplier for your bark chips?
— What alternative bark chip retailers would you consider as an alternative to Davis Ace?
— How would your travel time/mileage to those alternative vendors differ from your current travel time/distance to Davis Ace?
— Would the bark chips price per bag at the alternative source be lower or higher than $5.49 a bag? NOTE: Just for grins I checked the price at one alternative source and their price per bag was $9.99.
Bottom-line, the microeconomic realities are that adding 50 cents of parking to the average purchase during the typical 20-30 minute visit to Davis Ace would not cause any meaningful number of customers to seek a different retail source for their bark chips.
Have you done any “research” to determine the destinations (and time needed to visit multiple downtown businesses) of those who are parking in the public lot in front of ACE? Again, how does your plan support the “park in one spot” and visit multiple locations concept? Would some customers and employees then park in close-by neighborhoods, which do not (yet) have restrictions?
If you’re still proposing restrictions in the surrounding neighborhoods, how many spots per resident would be “allowed”? Would that include visitors? Again, what is the cost to implement and enforce this? Would hoped-for fines cover the cost?
How much revenue would “50 cents” per car (your number) generate, compared to the cost of enforcement? Would you depend upon hoped-for fines, to make up the difference?
I visit Ace all of the time for various projects. Most of the time I spend more than 30 minutes.
Keith, then according to the information I have been provided by Ace, you are an outlier. You are used to being an outlier in this town, so I imagine being seen as one by Ace will impact you as much as rain impacts a duck.
My own personal experience with Davis Ace is approximately 100 purchasing visits a year. I can count on one hand the number of times my visit to them was more than 30 minutes. Which is why their statement about average customer visit time reonated with me. It also explains why they have so many cashiers. Their customers come into the store knowing what they want … they quickly get it … and want the time efficiency of the checkout process to be just as expeditious as their shopping was.
Gosh, how will all the anti-automobile crowd shop if there is no place where they can walk or ride their velocipedes? Seriously guys, there is so much middle ground here that any normal community could easily find a balance between the interests of local retailers and the need to develop new revenue streams.
David is largely correct,” Davis has avoided this meltdown,” although I think that the reasons are more complex than David cares to discuss here. Going forward, the willingness of all parties to focus on defined goals rather than personal peeves can/will determine whether your town remains a bucolic sanctuary or fiscal realities are allowed to become so grim that rampant development sweeps it into the past.
It’s an interesting time and flexibility is key. Do we need to plan for a scenario where in the future downtown retailers become places where, for example, you can try on a shoe last to ensure fit and then provide your exact measurements for a personalized pair of shoes that will be delivered by the manufacturer to your door? Or where a new downtown retailer becomes a manufacturer by adding 3D printers to their locations to print a retail product developed at UCD? Home delivery is likely to increase in the future as well, and downtown retailers can take advantage of that.
Leanna
I think that you have hit upon an important point. So far the discussion has centered around the personal preferences of the commenters based on how they utilize the downtown. I welcome your input on how the future may look. As one small example, I know that my children’s concept of what is convenient and desirable is very different from the descriptions of commenters here. They do not see it as desirable to drive their own car to shopping ( other than grocery). They would much rather walk, ride their bikes, or for a longer trip to downtown take an Uber/Lyfte than have to deal with taking their own car. Much of their shopping is done on line. For items needed more quickly than a couple of days, same day ( often within a couple of hours) delivery can be arranged for a price. Please note that taking one’s car for a single shop hop also comes with a price whether or not we have to pay for parking.
I think that part of the issue is a changing mindset about private automobiles in general. When I was growing up, my car meant freedom to me. I had an emotional attachment to the idea being able to go wherever I wanted whenever. My children do not seem to have this emotional attachment to their cars. I suspect that regardless of the boomer attachment to our automobiles, the social/technologic dynamic is changing and it would be a good idea to take that into account for future planning.
Tia: In general, for those with houses more toward the edges of town, trips to downtown are viewed quite differently, compared to those living nearby. (However, from your post, it appears that your children might be an exception.)
Uber, Lyft, and delivery do not “eliminate” driving, and can be more inefficient (in more than one manner), compared to using a personal vehicle.
Another “shift” is also occurring (regarding vehicles), away from internal combustion engines.
Just for the record, I drive FAR less (e.g., per year) than the “average” motorist. I also (almost always) accomplish more than one task, when choosing to drive.
I also depend on personal vehicles when traveling to other towns.
Public transportation is great for commuting to work (e.g., to Sacramento), but not so much for other purposes.
This is exactly what is going on with all the presentations on ‘new directions’ for redevelopment, looking at the current best practices based on that changing dynamic. The idea that we need free and available parking everywhere comes from that past emotional attachment to cars and the ‘need’ to drive everywhere. As you correctly point out, that is changing, which leads to the understanding that there are better ways to utilize our scarce and valuable land than to cover it with parking lots.
Matt,
You completely mis-state my comments. My comments and examples were that I want to purchase in Davis, and prefer to not be forced to need to purchase outside of Davis if our community were to lose Davis Ace Hardware. My example included wanting to continue buying bark chips locally at Davis Ace hardware makes the most sense not only for the sale to give to a local store to keep it healthy, but also for the benefit of gaining the sales tax for Davis plus reducing our carbon-footprint. This is just one example to illustrate the need to have our City’s “general store” continue and thrive, and the benefits of that. So you comments are going off on a completely different tangent.
And on the amount of time spent with shopping trips. I enjoy my shopping trips and experiences downtown, particularly at Davis Ace because they provide so many average needs for everyday items needed for average households.
Eileen, nothing in the laws of microeconomics is in any way contrary to what you have said. What those laws of microeconomics clearly illustrate is that in the example you have given — that because you are having to pay 50 cents for parking, you will choose to go outside of Davis to purchase your bark chips — is so small it is nothing at all. Such a decision on your part would make no sense.
If you answer the simple questions I posed to you, you will make it crystal clear that it would make no sense for you to make that decision.
You’d end up spending more on one trip of gas than the cost of parking.
Yes, which everyone will figure out. Most of those worrying that paid parking will kill downtown are acting our of a fear of the unknown. Experience elsewhere shows that those fears are unjustified. People shop where they are treated well and where they can find the things they want at a reasonable price. Anyone who would drive to Woodland to avoid paying $0.50 in parking fees isn’t the valuable customer that a good company really wants.
The decision about where to shop is not a microeconomic choice based on fifty cents here and there. It is a series of decisions based on quality, selection, professional advice, accessibility, and much more. It is best represented by the kind of flow chart below.
Accessibility and parking are major factors for certain types of retail purchases. And it isn’t actually a rational cost-based decision. It’s a perception of inaccessibility, an accumulation of shopping trips that seem inconvenient building up to a gradual decision to start shopping elsewhere. It’s one of the reasons big-box retailers like to locate on the edge of town, even when they could build a store in town. Target’s 17 acres of parking is very enticing to an older person who doesn’t want to navigate the downtown parking labyrinth. As more of those shoppers find it inconvenient, sales drop. If they start deciding to go out of town, so much the worse for the city’s finances.
I agree wholeheartedly Don, and it is all of those factors that make a 50 cent increase in the total cost of a purchase at Davis Ace so meaningless. Lots and lots and lots of satisfaction factors overwhelm any dissatisfaction that a 50 cent increase in price may cause.
It isn’t the 50 cents. That is totally irrelevant to most people. It’s the perception that it is harder to park downtown, harder to get close to the desired store, more of a hassle to load the purchases. Anything that makes that harder for the customer, particularly for a business that focuses on do-it-yourself home improvement, will be harmful to that retailer.
Agreed
The logical solution, that will work for the off-street lots as well.
Again I wholeheartedly agree Don … and the difficulty in parking downtown is substantially affected by (1) employees of downtown businesses parking in spaces that are in front of (or in close proximity to) the stores they want to get close and load the purchases from. (2) students, faculty and staff of UCD who do not use the UCD-provided parking lots, but rather use downtown parking spaces, as well as nearby neighborhood parking spaces that would be more productively be used by downtown employees under the X Permit program.
If we eliminate the impact of those two factors, substantially more shoppers will find it easier to park downtown, easier to get close to the desired store, and less of a hassle to load their purchases.
I will note that this is not just the US. I am in China and they are losing retail at a tremendous rate. People who used to start stores are only starting restaurants or foot massage places.
Jim
To what do you attribute that loss in China? Is much of it due to loss to the internet ? What other factors do you see at play ?
On a slightly different note. My daughter is currently in Viet Nam. She has sent me a number of photos from various sites including Hanoi. What is quite remarkable is the number of small scooters, and the paucity of private automobiles. Clearly, the way that we have organized our cities is not the only way to do so. I cannot help but feel, much to Leanna’s point, that we are clinging too firmly to a model that our communities elders feel is “right” but may not be in our community’s best interests in the long run.
Tia,
It’s all TaoBao which is similar to ebay rather than a single player like Amazon.
To your point I have wondered why scooters were not more prevalent in Davis. When they build student housing on the old trailer park on Pole Line likely scooters will be more popular.
There is no dedicated parking for scooters and motorcycles. They have to share spaces with cars (which are likely to eventually bump into them and knock them over when parked on the street, causing damage to the scooter or motorcycle). In a parking lot, a scooter or motorcycle is forced to occupy an entire space.
You can’t carry much on a scooter or motorcycle, they’re dangerous, and not comfortable during poor weather. They’re even more dangerous and uncomfortable if one needs to travel on high-speed roads (e.g., outside of Davis).
Some motorcycles get worse gas mileage than modern, efficient cars. (And, I don’t think they’re subject to the same level of smog control and monitoring as cars.)
If you differentiate between scooters and motorcycles (e.g., to park in certain spots), standards would need to be developed.
I’ve owned several motorcycles over a period of time, when I was younger. (Not in Davis.) Somehow, I lived to tell about it.
As a side note, I recently read an article regarding a “stealth” (electric) motorcycle for the military. (Mostly due to the relative lack of noise, in dangerous territory.) Of course, electricity-assisted bicycles (and possibly scooters?) are already available. Again, however, with many (and perhaps more) of the same limitations of traditional bicycles, scooters and motorcycles.
The internal combustion engine appears to be on its way out (for all vehicles – including cars), eventually.
I find it fascinating that in progressive Davis we are arguing over parking. Which makes me wonder if any one under 40 believes our problem is not enough parking.
David: Probably depends on where they live, and where they need to go.
Also, “most” people don’t remain under 40 years of age, in the long run. Lifestyles and viewpoints change, as one gets older. (For example, I’ve read that millennials are starting to seriously consider leaving the Bay Area. Probably even more true, for those who want to start a family.)
On a broader level, I understand that the population (on average) is becoming older.
Very true that people don’t remain a certain age, but there are generational habits and predilections that remain stable over time.