Strategic Planning for Stagnating Strips

"It isn't so much that hard times are coming; the change observed is mostly soft times going." -Groucho Marx

Groucho hit the nail on the head with respect to America's aging automobile-oriented commercial strips. Changing demographics and shifting residential preferences have created a 'tweener' space between urban and suburban. This space encompasses most inner ring suburbs and their associated strip shopping centers. A 2008 study by the Center for Urban Environmental Research found that fifteen percent of these inner suburbs have reached a crisis point based on deteriorating economic conditions including declining retail sales and property taxes. These neighborhoods are at a tipping point. The 'soft times' of household growth and destination spending have gone, but the future is not necessarily bleak if municipalities and community organizations collaborate to take charge of re-envisioning the neighborhood for the future. A roadmap for assisting this alternate future is provided below, using case studies from several proactive Midwestern communities.

Image courtesy of Flickr user zol87

First, Survey the Territory

Not all inner ring suburbs are created equal. Despite the similarities in age of housing stock and overall development patterns, these areas represent a broad spectrum of demographic patterns. Distinguishing factors include the health of the center city that they surround, overall growth patterns of the larger metropolitan area, and fundamentals of housing supply and affordability in adjacent municipalities or neighborhoods. Identifying a community's current role will help inform the new vision and provide a benchmark of progress. Data collection should incorporate information about the commercial strip itself, its tenants and real estate and information on the surrounding neighborhoods. Some of the major elements examined should include:

• Current Trade Area. Who is shopping at the successful stores? In many older strips, pockets of loyal shoppers may come from farther flung areas to visit a familiar store, creating a larger than expected trade area. There may also be a certain demographic subset that is attracted to the existing stores. Identifying these populations can help identify potential complementary tenants and inform marketing programs for existing businesses.
• Retail Supply and Demand. What is being offered on the corridor, and how does it compare to what is being purchased? Overall trade area demand also illustrates the amount of retail space that is supportable in the corridor. Typically, this will be less than the square feet of existing space.
• Physical Space. What is the makeup of stores that are occupied versus those that are vacant? Retail tenant preferences have changed, and many spaces may not meet the needs of today's stores. Some too-large or dated spaces can be reformatted, but others may more suitable for conversion to other uses.
• Overall Land Use. What is the density of development in the corridor versus the rest of the city? Typically automotive strips are extremely low density. This can be an advantage, as such properties cost less to redevelop. Boosting density will enhance vitality and improve area market potential.

The Re-Visioning Process

Once you have a firm grasp on what is in the corridor, and what is working, the next step is to develop a vision for the future. There are opportunities to create alternate visions, but this isn't the time for rose colored glasses and visions of out-suburbing the suburbs. Stakeholder input and community feedback are especially useful during this stage. Creating public consensus regarding broad project goals (i.e. should the project emphasize property value increases, local business startups, quality of life improvements, etc) is a critical indicator of future project viability when it comes to funding and measuring success. Potential big picture strategies that the community can help craft include:

• Divide and Conquer. Most 1950s/60s strips long and monotonous. To create targeted opportunities and focus efforts, create sub-districts along the main corridor to support desired activities. Distances from one-fourth to one-third of a mile are the right size to be experienced and remembered by a visitor. Green Bay, Wisconsin, used this strategy in the economic restructuring plan for Military Avenue. The section of the corridor with the highest traffic counts and viable national retail was identified as the hub for future retail redevelopment, while adjacent quieter areas would focus on restaurant and professional services uses in pedestrian oriented redevelopments. Creating these distinct nodes and identifying specific physical and design guidelines for each provided the first step toward creating marketable entities and a public message regarding desired development.
• Re-allocate Space. Based on the findings from the market analysis, identify opportunities to re-allocate commercial, retail and residential ratios to meet current and projected market demand. The City of Monona, Wisconsin, when evaluating the Monona Drive Corridor, determined that minimal new retail square footage was supportable given future spending projections and surrounding retail needs, while additional of office space and multifamily residential units could be supported. Further analysis of corridor property values, demographics and traffic patterns identified four locations where mixed-use and higher-density development would have the greatest impact. The city formed a redevelopment district and purchased a number of parcels at these locations with the intent to pursue redevelopment as the market improves.
• Reduce Red Tape. Identifying target locations may not be sufficient if zoning reinforces the status quo. Many districts require rezoning to accommodate a desired vision. A key part of the Bluemound Road Redevelopment Plan in the Town of Brookfield, Wisconsin was a recommendation that the Town create new corridor-specific zoning ordinances with associated design guidelines to facilitate increased densities and mixed-use design that would not have been allowable under previous ordinance language. By making desired development the standard rather than the exception, developers face one less hurdle in undertaking a redevelopment project, which are typically more complex to begin with.

Get the Word Out

Once the overall vision has been identified, reach out to existing community networks. Inventory existing community resources. Be sure to include existing business and political leadership as well as other often overlooked groups such as educational partners and local financing organizations. The established cadre of locally-owned businesses is a significant force if given the appropriate tools and training. Affordable spaces tucked into declining retail centers are also frequently home to the 'creative class' of artists, designers and other potential sources of innovation and initiative. Tapping into these existing networks can provide a ready-made marketing platform. Lastly, don't forget the surrounding neighborhoods. Include them in the plan, let them know that their needs are being addressed and help them upgrade the residential infrastructure to maintain and enhance the local consumer base. Programs such as no-to low-interest loans, fast-tracked approval for basic upgrades and other strategic enhancement programs can be a low-cost way to leverage participation from this key group.

Maintain Momentum

The final step is to collectively develop an implementation plan. This plan should come complete with action items, a timeline and benchmarks for measuring progress in the short, medium and long term. Ideally some initial projects will create a visual sign of progress, but plan for a decade-long lead up to true economic change. Assign responsibility for each of the major tasks and create a formal structure for overseeing progress. A business district, neighborhood association or other governing body can serve this role, with adequate political support. Despite the significant amount of work required, cities and communities have much to gain. Increased property values, attractive neighborhoods and marketable districts send a strong message of commitment and progress to existing and potential residents and businesses. Emerging and 're-emerging' neighborhoods have always provided a haven for innovation and inventiveness. Mobilizing and capitalizing on this type of activity takes initiative and requires creative policies and a long term approach, but consistent hard work can create an economically viable neighborhood within the economy of the future.

Errin Welty is a market analyst at Vierbicher, working with public and private sector clients to create market-based solutions to solve economic and planning issues. Errin has significant planning and real estate experience, having been on staff with downtown organizations in both St. Cloud, MN and Denver, CO, and a founding member of Wheat Ridge 2020, an economic development organization focused on revitalizing one of Denver's original inner-ring suburbs. She recently relocated to Madison, Wisconsin from Denver, Colorado, where she was manager of Grubb & Ellis' research and marketing department, responsible for real estate and economic forecasting and planning assistance for developer and landlord clients representing a variety of property types.