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Strategies for Vacant Buildings in Your Downtown
Downtown vacancies are always an issue. Almost every city has at least one property that a downtown manager would like to fill but can't. Why? The reasons are varied: poor economic conditions, difficult property owners, zoning and code restriction...the list goes on and on.
So, what strategies are out there? TDA posed the question to our members and researched what cities outside of Texas are doing to turn the tide on vacant downtown properties.
Texas
One member sponsored a "Downtown Property Showcase" in April and over 50 people showed up to view the available properties. Staff placed "Can you imagine your business here?" signs in front of all vacant properties. Two properties were leased following the showcase, one "difficult" owner chose to put his property on the market and an investor made an offer on an unavailable property.
Another member partnered with their local Realtor organization to sponsor a tour of downtown buildings as part of their monthly meeting. Over 75 realtors showed up for the event (an iPad was offered as a door prize if folks took the tour and stayed until the end). While there are not current vacancies in this downtown, developing relationships with local realtors will pay off
Kent Dussair of CDS Market Research proposes working backwards. First conduct a thorough assessment of the building's physical attributes, surrounding land uses and neighborhood conditions to determine the most likely uses. Then prepare a targeted marketing package that connects the building's assets with the needs of potential users. An up to date appraisal is needed so the building can be properly priced for rent or sale. Then local real estate brokers can identify realistic prospects.
Baltimore, Maryland
In 2010, the Baltimore Downtown Partnership announced that if people proposed creative ways to use vacant commercial space - even short term ideas - the nonprofit would not only help them find a building, but give them as much as $10,000 to get the project off the ground. Of approximately 100 applications submitted, about a dozen proposals were selected and included a bagel shop, an artist collective, a designer clothing store and a martial arts studio. Baltimore has also experimented with setting up temporary businesses in vacant buildings. In 2005, the city allowed artists to set up a gallery on the ground floor of a building that was slated to be razed for luxury apartments. When the deal fell through, the gallery ended up staying for years the site, rent-free.
http://www.godowntownbaltimore.com/
RFP: Operation Storefront
http://www.godowntownbaltimore.com/Publications/Operation_Storefront_RFP.pdf
Kalamazoo, Michigan
Downtown Kalamazoo Inc. just graduated their first business from their Retail Incubation Program in June. The program provides mentoring, training and rental assistance for entrepreneurs in the central business district. Start-up businesses that graduate from the program are offered reduced rent so they're able to build cash flow in their early stages of development. They also participate in a training program administered by the Small Business Technology and Development Center and professionals in customer service, sales, marketing, inventory control and human resources.
http://www.downtownkalamazoo.org/Do-Business/Grants---Incentives/Retail-Incubation.aspx
New London, Connecticut
New London had a one-third vacancy rate among its downtown structures in 2008. Leaders realized they had to look at all of the options for potential development and identify what the city could do to help. The city responded to concerns it didn't allow enough uses in its downtown and increased the list of allowable uses. City leaders also considered waivers for different fees and streamlining the process for developers and owners. One resident proposed changing the tax structure, so that vacant properties were assessed higher taxes than neighboring properties that were occupied. Three years later, New London was featured in an article comparing its success with a neighboring community that hasn't been able to focus downtown development.
West Palm Beach, Florida
The West Palm Beach Downtown Development Authority (DDA) announced a The Great Shop Showdown contest in June 2011. The purpose of the contest is to encourage entrepreneurs to submit their retail business concept for consideration and to open a storefront along Clematis Street in West Palm Beach's Downtown-Clematis District. The Grand Prize Winner will receive free rent for 12 months of a 5-year lease, free marketing and advertising services, inclusion in the business section of the West Palm Beach Go and DDA websites, exposure to various media outlets and media outreach via press releases, media advisories and social media, start-up funding through a local bank, free monthly retail mentoring services, and free one-year membership with the local chamber of commerce. The contest has garnered national media attention since it was announced.
http://www.westpalmbeachdda.com/the-great-shop-showdown
Other communities have considered additional measures. Napa, California contracted with a consultant to analyze local shopping needs and develop a plan to entice regional and national chains. Redwood City, California relaxed zoning restrictions that prohibited offices from locating in ground floor locations downtown. Jacksonville, Florida property owners made their vacant spaces available to artists rent free to encourage arts development downtown.
There are a lot of options out there, but you need to select the one that will work best for your downtown and community.
