No. 204 FEBRUARY 2004

T H E M O N T H L Y JOURNAL o f T H E N A T I O N A L T R U S T ‘ S N A T I O N A L M A I N S T R E E T C E N T E R®

Protecting By now, many community leaders LOCALLY OWNED : recognize that when chain retail sprawls unchecked, main street PLANNING TOOLS loses, not just jobs and businesses, for curbing chains but the very essence of what and nurturing makes the district unique. Small, homegrown independent businesses CAN businessses. prosper, however, when planners use the right tools to manage economic growth in the region. by Stacy Mitchell This month, we report on some of the most promising new regulatory strategies available.

© Josh Bloom — Doug Loescher, Assistant Director, NMSC in this issue

National Main 16. Streets Conference Gear up for this year’s National Main Streets Conference in Albuquerque, New Mexico, May 9-12, by checking out the tours we have planned. Come to the Land of Enchantment and explore historic neighborhood business districts and landmarks stretching from ancient times—pueblos and petroglyphs—to the recent past— roadside signs and architecture along Route 66. con’t from page 1

One afternoon not too long ago, more than 200 residents of Hood River, Oregon, linked arms to form a giant circle around their downtown. They sought to demonstrate support for locally owned businesses and opposition to a proposed Wal-Mart supercenter. By encircling an area roughly equal to the footprint of the store, participants hoped to illustrate just how large the development and its {}impact on the downtown would be.

The event was one of several CRG organized meetings highly visible public education and events, wrote letters to initiatives organized by the newspaper, hung posters Citizens for Responsible around , and launched a Growth (CRG), a grassroots website. Bit by bit, they built group that formed to block a case against large-scale chain the 185,000-square-foot super- stores. Their argument came

center and generate support partly from the heart. They Mitchell © Stacy for a countywide ordinance talked about Hood River’s Communities that protect their distinctive character and maintain one-of-a-kind banning stores over 50,000 vibrant downtown, about a square feet. sense of community, about lost businesses are more interesting places to live and to visit. They also tend to open space. But they also made attract a skilled populace, the kinds of people considered to be key drivers of © Stacy Mitchell a sophisticated and detailed job creation and prosperity. economic argument, much of it drawn from information they’d are adopting size limits and a role. Land-use and transporta- gathered on the web (see side- other kinds of land-use polices tion policies have fueled sprawl bar, “Resources,” page 6). that restrict the growth of and undermined the viability CRG won a partial victory chains, support downtown of older commercial centers. when the town and county revitalization, and create an Chain store developers routine- voted in favor of the measure environment in which locally ly receive multi-million dollar capping stores at 50,000 square owned businesses can thrive. subsidies that are rarely offered feet. But the new ordinance to local businesses. State and would not apply to Wal-Mart, federal tax policies tilt the which had submitted its appli- The Case for Locally playing field as well, giving cation before the vote. Owned Retail national retailers an advantage With the help of a land-use Independent businesses have over their smaller rivals. attorney and a water consult- faced a tough road over the last Communities have encour- ant, CRG convinced the county 15 years. Tens of thousands aged the expansion of large that the supercenter violated its have closed as chain retailers retailers for the perceived existing comprehensive plan such as Home Depot, The Gap, economic benefits. But there’s due to floodplain impacts and and Barnes & Noble have mul- mounting evidence that these incompatibility with surround- tiplied. Biggest of all is Wal- stores actually weaken local ing property. Finally, in early Mart, which now has 3,000 economies and entail signifi- January, the county commis- stores in the U.S., commands cant costs that far outweigh sion voted to reject Wal-Mart’s nearly nine percent of all retail their benefits. proposal. spending, and accounts for One of the most persistent Similar scenes are playing one-tenth of our trade deficit myths about chain retailers is out across the country. More with China. that they expand employment. and more communities are Consumer choices are only often welcome big-box Because they tend to be located in dense questioning whether large partly responsible for the rise of stores for the jobs they produce. commercial areas, Main Street retailers chains are really such a bargain. chains and decline of local busi- But many studies have found are efficient users of public infrastructure And many, like Hood River, nesses. Public policy has played that large chains eliminate as and services.

2. M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 revenue. Take the case of file for a major big-box retailer amount of consumer spending Pineville, North Carolina. operating in the region and from chains to locally owned This town of 3,400 people has estimated that only 14 percent stores would generate millions added some 6 million square of the revenue taken in by the of dollars in new economic feet of retail—a mall and many store is re-spent within the activity and create hundreds big-box stores—over the last state. Payroll accounts for most of new jobs—the equivalent of decade, only to find that the of this in-state spending. The attracting a major employer. new stores generate so many rest, 86 percent, leaves the Lastly, it’s worth noting that police calls—for bad checks, state, flowing to corporate in a time when so many cities shoplifting, and parking lot headquarters and out-of-state are ringed by identical sprawl- accidents—that they consume suppliers. ing boxes or overrun by ubiq- all of the revenue they produce. We then surveyed about a uitous chains like The Gap and The town recently raised prop- dozen locally owned retail busi- Starbucks, uniqueness has © Stacy Mitchell © Stacy The arrival of a big-box store is erty tax rates across the board nesses and found that 54 per- become a rare and valuable often welcomed for the jobs it and, desperate to control rising cent, or more than three times economic asset. Those commu- costs, blocked further big-box as much, of their sales revenue nities that have protected their produces. Ironically, the job construction. was re-spent within the state distinctive character and main- losses from local stores that In contrast, Main Street (almost all of it within the tained many one-of-a-kind downsize or close frequently retailers, because they tend to surrounding two counties). businesses are more interesting equal or exceed the job gains be located in relatively dense from the new superstore. commercial areas, are very effi- cient users of public infrastruc- many jobs as they create. That ture and services. The differ- is because consumer spending ence is dramatic, according to is a relatively fixed pie. Sales a recent study in Barnstable, gains at a new shopping devel- Massachusetts, a city of 48,000 opment are invariably offset by people. The study, conducted losses at existing businesses. by Tischler & Associates, com- It’s “a zero-sum game,” accord- pared public revenue and costs ing to Dr. Kenneth Stone of for various land uses. It found Iowa State University, who, for that the city’s small, downtown more than a decade, has tracked stores generate a net annual Wal-Mart’s, and more recently surplus (tax revenue minus Home Depot’s, impact in Iowa. costs) of $326 per 1,000 square As local stores lose sales, they feet. Big-box stores, strip shop- either downsize or close. The ping centers, and fast-food resulting job losses typically outlets, however, require more equal or even exceed the gains in services than they produce in at the new superstore. revenue. A big-box store creates The new jobs at Target an annual tax deficit of $468 or Wal-Mart, moreover, often per 1,000 square feet. Studies have shown that land-hungry chains, strip shopping centers, pay less and offer fewer benefits If that’s not enough to and fast-food outlets frequently require more in services than they than the jobs they replace. give city officials pause before produce in revenue. Taxpayers end up picking approving a new megastore, up the difference. Half of consider the many non-retail These independent retailers places to live and visit. They Wal-Mart’s workers qualify for businesses in the community support a variety of other local are also more likely to attract food stamps. Washington state that depend on local retailers businesses, we found. They skilled workers and entrepre- reports that Wal-Mart employ- at least in part for their liveli- advertise in local newspapers, neurs—the kinds of people ees are the largest group of hood. A few months ago, the bank with local banks, pur- many economists consider to be users in its taxpayer-funded low- Institute for Local Self-Reliance chase inventory and supplies key drivers of job creation and income health care program. teamed up with Friends of from local firms, and hire local prosperity in today’s economy. Another common myth is Midcoast Maine to conduct a accountants, printers, web Aside from the economic that new retail development small, informal study in the designers, and so on. benefits, there’s much to be will boost the tax base and Maine towns of Rockland, When local retailers are said for the civic value of relieve some of the burden Camden, and Belfast. We wanted replaced by chains, all of these patronizing businesses owned shouldered by homeowners. to find out what happens to a other businesses suffer. The by our neighbors—people who This may be the case in some dollar spent at a local store versus implications for the way cities places. But other towns have a dollar spent at a chain. approach economic develop- discovered that these sprawling Using a variety of sources, ment are significant. Our study con’t on page 4 stores require more in public we created an expenditure pro- concluded that shifting a small services than they generate in

M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 3. con’t from page 3 © Lauren Adkins greet us by name, send their © Lauren Adkins kids to school with our kids, and have a vested personal interest in the long-term health of the community. Our study in Maine found that local mer- chants contribute, relative to their overall size, more than four times as much money to chari- table causes as Wal-Mart does and twice as much as Target. Altogether, it’s a pretty high price to pay to save a few bucks and even that claim may not While drugstore chains usually promote low prices, surveys in New York and Maine revealed that independent hold up to scrutiny and time. pharmacies offer lower prescription prices on average than chains like CVS, Rite Aid and Walgreens. As they’ve gained market share, Barnes & Noble and Borders have sharply reduced the to revise local land-use policies construction of large retail Size limits have also been number of books they offer at should be a core part of any stores. It used the time to enacted by counties to prevent a discount. Surveys in New downtown revitalization pro- study the issue and hold a large retailers from setting up York and Maine have found gram. Indeed, strong land-use series of public meetings, shop on unincorporated land that independent pharmacies policies are essential to ensure after which the Planning just beyond a town’s borders. have lower prescription prices that years of revitalization work Commission released a report This was the case in Hood on average than drugstore and downtown investment are concluding, “Once a big-box River, where the town and chains like Rite Aid, Walgreens, not undermined by uncon- retail store exceeds 65,000 county acted simultaneously to and CVS. Some evidence sug- trolled, competing retail growth square feet. . . it is of such a bar stores over 50,000 square gests that Wal-Mart’s prices elsewhere in the community. scale that its negative impacts feet. Another example is rise significantly once the Strong land-use policies can outweigh its positive ones.” Coconino County, Arizona, company has eliminated the also help a downtown recruit The town council adopted an which banned stores over local competition. new businesses. After the town ordinance banning stores over 70,000 square feet after big- of Excelsior, Minnesota, 65,000 square feet (about half box developers threatened to expressed a desire to keep out the size of a typical Home locate on the outskirts of Banning Big Boxes chain retailers, Linda Murrell, Depot). Flagstaff if blocked from the director of the Excelsior Area Some towns have chosen city itself. Planning and land-use policy Chamber of Commerce to send the issue to the voters. In some cities, these meas- provides a powerful tool for received numerous calls from After Wal-Mart optioned land ures are being adopted at the communities seeking to limit entrepreneurs and small busi- on the outskirts of Belfast, neighborhood level. The chain store development and ness owners eager to locate Maine, a community of 6,500 Brookside district in Kansas foster small, homegrown busi- (or relocate) in a community in the fast-growing mid-coast City bans stores over 10,000 nesses. Reviewing and working that was committed to its region of the state, the city square feet. Stores over 4,000 downtown and local merchants. council adopted a temporary square feet are prohibited in © Lauren Adkins One of the most common moratorium on large stores and several San Francisco neighbor- approaches is to prohibit stores placed an initiative banning hoods. The aim is to keep out over a certain size. What con- stores over 75,000 square feet chains like J. Crew and The stitutes an appropriate upper on the ballot. Gap, which generally require size limit depends on many At first, the council was larger formats, and to maintain factors, including the commu- widely criticized for being local, neighborhood-serving nity’s population, the scale of “anti-growth.” Informal polls businesses. its existing buildings, and its suggested more than 60 percent long-term planning goals. of residents favored Wal-Mart. Some towns have banned only But an extensive public educa- Steering Commerce the biggest of the big boxes; tion campaign by the grass- Downtown others have opted for much roots group Belfast First turned A number of cities have adopt- lower thresholds. the tide. “People learned a lot ed land-use rules that steer new In 1999, prompted by sever- about our economy and about retail development to areas in al applications for retail projects the predatory practices” of large or adjacent to the downtown that were larger than anything retail chains, noted Mayor or other established business Capping the size of retail stores is anticipated by the community’s Michael Hurly. On election districts. This supports a more a powerful tool to limit the comprehensive plan, the town day, voters endorsed the size efficient use of land and public impact of sprawl. of Easton, Maryland, enacted cap by a 2-to-1 margin. a temporary moratorium on

4. M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 infrastructure, and preserves To ensure adequate scrutiny downtown business district, the vitality of existing commer- of retail projects, many com- and the town’s character would cial centers, rather than allow- munities are enacting policies be examined. If officials deter- ing economic activity to shift that require retail projects over mine that the store’s costs out- to other parts of town. a certain size to undergo a weigh its benefits, then the The planning policy of comprehensive economic and developer would be denied a Hailey, Idaho, for example, community impact review. To permit to proceed. To cover the states that the downtown gain approval, the project must costs of the review, which could “should be the primary com- meet specific criteria outlined entail hiring independent ana- mercial center of the communi- in the law. lysts, developers would pay a fee ty.” The city’s policy calls for One town currently working of $300 per 1,000 square feet. developing any vacancies in the on such a measure is Homer, central business district before Alaska, a community of 4,700 allowing commercial growth in people on the breathtaking Restricting “Formula” COMMERCIAL other areas. In 1995, the Idaho Kenai Peninsula. Homer has Businesses Supreme Court upheld this a vibrant downtown with a Some communities have con- BLIGHT policy, noting that “preserving... multitude of locally owned cluded that, regardless of their the economic viability of a businesses. Last November, size, “formula” businesses are community’s downtown the supermarket chain Kroger rarely if at all acceptable due One of the most compelling reasons business core can be a caused an uproar when it to their impacts on community to establish limits and standards for proper zoning purpose.” announced plans to build a character and the local economy. retail development is to avoid the 94,000-square-foot Fred Meyer Formula business are legally epidemic of vacancy and shopping store. The city council passed a defined as businesses that adopt center blight that is now sweeping Requiring an Economic temporary measure prohibiting standardized services, methods the country. Impact Review stores over 40,000 square feet, of operation, decor, uniforms, Cities and towns commonly which will remain in place architecture, or other features Countless strip malls are shuttered make decisions about retail pending permanent regulations virtually identical to businesses and idle. About one-third of all development without objective to set impact standards and elsewhere. enclosed malls are in serious financial information on the potential store size limits. About a dozen towns have distress; hundreds have already costs and benefits. Often, in An ordinance now under banned or limited the number closed. Even the big boxes are consideration would require fact, the only economic data of formula restaurants or retail going dark as companies like Wal- proposals for retail stores over stores allowed within their available is provided by the Mart and Home Depot abandon developer. Officials may know 15,000 square feet to undergo borders. Coronado, California, how many jobs a store will a review. The project’s impact for example, allows no more existing outlets to build ever larger create, but they rarely know on , scenic and historic than 10 formula restaurants stores. Wal-Mart alone has more how many it will eliminate. resources, tax revenue, city and requires a special review than 350 empty stores nationwide. services, employment, the and permit for formula retail Some communities are now home stores. Bainbridge Island, to dozens of vacant boxes, creating Washington, bans all formula eye-sores and blight than can affect restaurants. nearby property values. Formula business ordinances are garnering more interest as The problem is that most cities chain drugstores, fast-food are “over-zoned” for retail. Cities outlets, clothing retailers like tend to zone huge swaths of land The Gap and Banana Republic, along every highway and major and even Wal-Mart and Home roadway for retail development—far Depot, which recently unveiled more retail than residents can actually urban prototype stores, increas- support. For developers and chain ingly seek locations in town cen- ters and urban neighborhoods. retailers, it’s cheaper to colonize San Francisco, for example, greenfields than to redevelop existing is currently considering a meas- shopping centers. ure that would ban formula Limiting new retail growth to businesses entirely from certain defined areas adjacent to existing busi- areas and require neighborhood ness districts, setting store size limits, notification and a public and establishing economic impact hearing for those proposed criteria are some of the planning tools that can save your community from To maintain its distinctive character, Coronado, California, allows no more con’t on page 6 than 10 formula restaurants downtown and requires a special review and this fast-growing epidemic. permit for chain stores.

M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 5. con’t from page 5

elsewhere. “The increasing A good model comes from © Scott Day number of formula stores has Cape Cod, Massachusetts, a a homogenizing effect on our region with a fast-growing neighborhoods and makes it population of 227,000. In more difficult for local and 1990, residents voted to create independent businesses to have a regional planning body called a foothold in the city,” says the the Cape Cod Commission. ordinance’s sponsor, Supervisor The commission reviews all Matt Gonzalez. proposals for commercial devel- opment over 10,000 square feet. The review process Regional Cooperation involves a public hearing and In some areas, neighboring focuses on the project’s impact communities are beginning on the environment, traffic, to work together to develop community character, and the regional planning policies and local economy. Applicants bear joint strategies for controlling the burden of demonstrating retail sprawl. Although very that the project’s benefits challenging to accomplish, outweigh its detriments. regional planning is increasing- A Regional Policy Plan, ly important given the fact updated every few years, that the impacts of large retail provides the commission with developments---from traffic standards and guidelines for congestion to reviewing applications. Several closures---are typically felt far large retailers, including beyond the host town’s borders. Wal-Mart, Costco, and Home Depot, have been turned down In some areas of the country, neighboring communities are joining forces to as a result of this process. develop regional planning policies and strategies to control retail sprawl.

RESOURCES BOOKS Going Local: Creating Self-Reliant Communities in a Global Age by Michael Shuman (The Free Press, 1998). MODEL ORDINANCES The Home Town Advantage: How to Defend Your Main Street Against Chain The Institute for Local Self-Reliance maintains an on-line clearinghouse Stores and Why It Matters by Stacy Mitchell (ILSR, 2000). of ordinances, including the kinds of policies described here and many others, along with related resources, at www.newrules.org. How Superstore Sprawl Can Harm Communities and What Citizens Can Do About It by Constance E. Beaumont (National Trust for , 1994). ORGANIZATIONS Slam-Dunking Wal-Mart: How You Can Stop Superstore Sprawl in Your Institute for Local Self-Reliance - www.newrules.org Hometown by Al Norman (Raphel Marketing, 1999). Research, technical assistance, and innovative policies to curb chains and rebuild strong local economies. 10 Reasons Why Vermont’s Homegrown Economy Matters and 50 Proven Sprawl-Busters - www.sprawl-busters.com Strategies to Revive It by Stacy Mitchell (Preservation Trust of Vermont, 2003). Expert advice and loads of information on beating big box retailers. American Independent Business Alliance - www.amiba.net MAIN STREET NEWS Tools for raising public awareness of the benefits of supporting “Chains on Main.” Main Street News, September 2001. local businesses. “The Discount Jitters.” Main Street News, April 1994. Business Alliance for Local Living Economies - www.livingeconomies.org “Planning Tools for Main Street.” Main Street News, October 1996. Help building local business networks to foster sustainable communities. “Smart Growth: New Opportunities for Main Street,” Main Street News January/February 2000. “Smart Growth: Planning and Zoning,” Main Street News, April 2002. NEWSLETTERS “Smart Growth: Retail Caps.” Main Street News, December 2002 The Home Town Advantage Bulletin - A free, bimonthly email newsletter “Smart Growth: Smart Codes.” Main Street News, September 2003 reporting on successful community efforts to limit chain store proliferation “Smart Growth: Temporary Development Controls,” Main Street News, and strengthen locally owned retail businesses. Keep abreast of the latest October 2002 trends, research and strategies. To browse back issues or sign-up: “When Chain Drugstores Come to Town.” Main Street News, November 1998. www.newrules.org/hta

6. M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 calendar of events

March 17-19, 2004 The California Downtown Association, 2004 Spring Conference El Segundo, Calif., 888-429-1224 or e-mail: nities are actively shaping their [email protected] http://www.californiadowntown.com/conferences/ own future. For further informa- el/fall/ tion and assistance in applying April 17-19, 2004 these policies in your commu- International Downtown Association, nity, see the resources listed 2004 Spring Conference in the sidebar on page 6. Houston, Tex., 202-393-6801 or e-mail: [email protected] Stacy Mitchell is a researcher with www.ida-downtown.org April 21-22, 2004 the Institute for Local Self-Reliance International Economic Development and author of The Home Town Council, Business Retention and Expansion Columbus, Ohio, e-mail: [email protected] Advantage: How to Defend Your http://www.iedconline.org/prodev_BRE_GA.html Main Street Against Chain Stores April 22-23, 2004 and Why It Matters. She produces Project for Public Spaces, How to Turn a Place Around The Home Town Advantage New York, N.Y. , 212-620-5660 or e-mail: [email protected] Bulletin, a free e-mail newsletter http://pps.org/nyc_training.htm on strategies to curb chains and April 24-28, 2004 strengthen locally owned business, American Planning Association: Celebrate Community, APA National Conference

© Lauren Adkins © Lauren and has advised community organ- Washington, D.C., 202-872-0611 or e-mail: [email protected] Years of revitalization work in downtowns izations, small business groups, www.planning.org/ and neighborhood business districts can These are just a few examples and policymakers nationwide. April 27-28, 2004 be undermined by uncontrolled retail of the innovative planning Main Street New Jersey, Guiding Design development elsewhere in the com- policies cities and towns are on Main Street munity. Not only can this growth be Trenton, N.J., 609-633-9769 adopting to curb chain store www.state.nj.us/dca/dhcr/msnj.htm an eyesore that damages a town or sprawl and rebuild their local May 1, 2004 city’s sense of place; it can also have an economies. Rather than accept- NTHP, Nomination Deadline for National adverse impact on traffic, tax revenue, ing the one-size-fits-all model Preservation Honor Awards public services, and employment. of development, these commu- 202-588-6000 or e-mail: [email protected] www.nationaltrust.org/preservation_awards/ index.html May 6-8, 2004 Texas Historical Commission, 2004 Annual JOB ANNOUNCEMENTS Conference: “Recognizing Resources, Preserving Places” Executive Director tration, economic development, along with a volunteer board of Fort Worth, Texas, 512-463-6255 www.thc.state.tx.us The Municipal Service District or a related field required; mas- directors in this New serving Historic Uptown ters or related advanced degree Hampshire community. The May 9-12, 2004 preferred. Extensive experience director will work with local NMSC, 2004 National Main Streets Shelby, the central business dis- Conference: Revitalization Resources: trict in Shelby, North Carolina, with economic development businesses, government, and Money, Places, Partners (pop. 22,000) is seeking a pro- projects, historic preservation, community organizations to Albuquerque, N. Mex., 202-588-6329 historic tax credits, and mixed- build on events, economic http://www.mainstreet.org/Conferences/ gressive professional to direct NTM/index.htm the activities of a nationally use development required. development projects, and Written, computer, and oral community projects. May 11-14, 2004 recognized, established Main U.S. Department of Energy, 2004 National Street program. The executive communication skills impera- Applicants should have experi- Conference for States and Communities director serves as chief adminis- tive, along with ability to han- ence in public policy, planning, Minneapolis, Minn., 202-586-8296 or 202-586-2621 trative officer and assumes dle budgeting, public relations, economic development, and supervisory, administrative, and and contract negotiations. marketing. Good communica- May 18-20, 2004 Salary and benefits negotiable. tion, team-building, manage- Heritage Ohio/Downtown Ohio, Inc., professional responsibilities Annual Preservation/Revitalization associated with economic proj- Position will remain open and ment, and computer skills Conference and Awards ect development, planning, applications may be accepted essential. Competitive salary Dayton, Ohio, 614-258-6200 or e-mail: until filled. EOE. Submit letter and benefits, with training and [email protected] board and committee organiza- www.heritageohio.org tion, and marketing. This posi- of interest, resume, salary histo- support from the New ry, and examples of work to: Hampshire Main Street Center July 21-22, 2004 tion requires an individual with Main Street New Jersey, a minimum of 5 years’ progres- USA Search Committee, P.O. in Concord. Northern New Creating Economic Opportunity sive experience as Box 2042, Shelby, NC 28151. Hampshire offers a great quali- Trenton, N.J., 609-633-9769 www.state.nj.us/dca/dhcr/msnj.htm manager/executive director in ty of life, and access to superb the field of uptown develop- Executive Director skiing, hiking, and outdoor ment and the Main Street pro- The Berlin Main Street activities. Send resume to: Calendar entries of state, regional, and national BMSP,220 Main ST., interest may be submitted in writing by the gram. Bachelor’s degree from Program is seeking an execu- fifth of each month for the following month’s an accredited college/university tive director to direct down- Berlin NH 03570 or e-mail newsletter. We reserve the right to edit all in the field of public adminis- town revitalization activities to [email protected]. entries based on appropriateness and space.

M A I N S T R E E T N E W S No. 204 FEBRUARY 2004 7.