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Dispatch From The SPC: Let’s Get Proximate: the Economics of Neighborhood Business District

2011 October 12
by David Cutler

Note: This post is part of an ongoing series of dispatches from the Seattle Planning Commission.

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Business districts are the backbone of economically, socially, and environmentally sustainable neighborhoods.  They diversify the City’s tax base, which helps build fiscal stability.  They provide jobs for a range of skill sets and levels, which supports upward mobility. They offer convenient, neighborhood-specific shops and services, which make living without a car possible.  And let’s not forget, neighborhood business districts generate a buzz of positive activity at the sidewalk, which make them places where people want to be.  It’s no accident that at the top of nearly every neighborhood’s wishlist are “mainstreet” staples like a corner coffee shop, a wholesome grocer, a friendly bistro, a hopping pub, or a local movie house.  These things help foster local identity and can build an authenticity that is elusive among today’s branded developments.

But, here in Seattle, as is the case nationally, not all neighborhood business districts hum with the constant din of stroller wheels and impromptu sidewalk conversations.  The metal lounge chairs outside Victrola on Capitol Hill’s 15th Avenue East are full on any random Tuesday, you name the time, and nearby residents have the choice of supplying their pantries from QFC, Safeway, Madison Market, or Trader Joe’s.  While many other neighborhoods in our City are not as fortunate.  Why?  Well, without delving into demographics, disposable income levels, and a smorgasbord of other important market determinants, one might say that it has to do with local density.  Or, to put it a better way, with proximity.

< 15th Ave E in Seattle's Capitol Hill neighborhood >

The mechanics are complex, but the concept is simple.  Neighborhood business districts thrive when there are enough nearby residents and synergistic land uses to establish a stable base of patrons.  That means that in a high-proximity neighborhood like Capitol Hill, the multitude of people that live within a five minute walk of 15th Avenue East, together with the jobs base at Group Health, help nearly five blocks of businesses flourish day in and day out.  The street is safe, secure, and inviting, and the pace of business turnover has been moderate and typically in response to local needs.

So, you might ask, what would it take to make my business district function more dynamically?  Where can I learn more about this proximity elixir?  Well, you can start by looking at our City’s Comprehensive Plan: “Towards a Sustainable Seattle,” which establishes a land use framework that, at its best, enables people to live near where they want to work, learn, shop, and play.  This framework informs zoning, with the goal of opening opportunities, balancing the local mix of housing and jobs, and fostering responsible growth.

The Comprehensive Plan is being updated this year.  So, check it out.  Get proximate.  And start planning whether you’ll pick up a macchiato on the walk home from the grocery, or a Manny’s at the pub after the movies.

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David Cutler, AIA, is the Vice Chair of the Seattle Planning Commission, which is the steward of Seattle’s Comprehensive Plan—Seattle’s framework planning document—to be updated in the coming years.  He is also Co-Chair of the Seattle Light Rail Review Panel, and serves on the board of the Seattle 2030 District.  

 

18 Responses leave one →
  1. October 13, 2011

    Great picture. The sidewalk looks really wide; plenty of sky in the picture; old, one story buildings, and the store fronts are varied and windows are clean. Yes, it is a dense area. So is Ballard. I was there recently and the three blocks along Market St from 18th to 21st were crowded with people, but the two blocks just of 15th between 2 eight story buildings were dark and had only a few people passing through. The same in front of Ballard Landings a few blocks south. Tall buildings on both sides of the street, no foot traffic. Density is like a blog post. The content counts and arrangement count or it’s just buildings/text.

  2. Barb Wilson permalink
    October 13, 2011

    The Comp Plan is being updated…Identify your priorities for Seattle by taking the survey: http://www.surveymonkey.com/s/SEACompPlan.

    • Matt the Engineer permalink
      October 14, 2011

      I find this survey hard to take. Maybe I agree with the comp plan creators too much, but here’s a question that might have come straight from that survey:

      On a scale of least important to most important, rate the following:
      Puppies
      Rainbows
      Sunshine

      • Bill Bradburd permalink
        October 14, 2011

        agreed, Matt. a totally lame push poll.

        in a time of budget crisis, it’s hard to believe that we are paying for something like that..

  3. Bill Bradburd permalink
    October 13, 2011

    Glenn is right. The cute neighborhoods presented as “models” of dense urban living aren’t really that dense. And our dense neighborhoods, such as Belltown, feel cold and sterile, and suffer from big city “problems” – noise, dirt and crime.

    Yet the mantra from the development community (heavily represented on the Planning Commission) is that we need 8+ story buildings and dense neighborhoods so we can get our quaint shopping district.

    Proximity IS important. But the density required to support a desirable shopping district such as 15th Ave, or 45th in Wallingford, or Queen Anne Ave on the top of QA, is NOT Belltown density. In fact, most of those surrounding communities are zoned single family (the anathema of the Planning Commission and those self-styled and self-taught density proponents).

    There are two larger issues for our attempts to create successful small community shopping districts.

    The first is that we are overzoning in areas and too broadly upzoning throughout the city. Rather than focusing rational and scaled development in a few areas, we have a fanciful desire to make everything big, fast. While this may satisfy some well-connected property owners and a certain class of developer, it does a disservice to our planned urban villages and their commercial districts. In my own neighborhood our commercial district remains underdeveloped and blighted (even new buildings have vacant street-fronts). Why? Because there are continually newly presented opportunities for development elsewhere in the city. Laws of supply and demand are at work – and with (realistically) a limited ability for the city to absorb growth and create jobs and units to house new residents, only a limited number of projects will be built over any period of time. We need to focus that development into preferred areas rather than haphazardly upzoning everywhere in the city. And that development potential needs to match what can realistically be supported by the underlying development and financing markets.

    Secondly, our zoning rules and efforts do not encourage projects that support small neighborhood scale commercial elements. Our Neighborhood Commercial (NC) zones enable extremely large retail establishments. Very big stores are too large to be satisfied by a walkable catchment, and therefore require significant parking and to attract patrons from a very large trade area. In NC-3 there are no store size limits, and in NC-2 store sizes are capped at 25K sq ft. These are big box scale establishments and that can necessitate a trade area radius of 5 or more miles. Hardly the basis for a quaint walkable shopping district. Because everything is now zoned at 65+ feet (the NC-40 zones with the street level height requirements have made that zone worthless from “pencil out” standpoint), the cost of development is so high that resulting commercial rents are untenable for the small businesses that the author has pictured and fawns over (as most of us do). Nor does our zoning really encourage real “local” jobs – unless those jobs are as a clerk in retail store.

    The Planning Commission needs to recognize that sometimes small is beautiful and less is more.

    • Matt the Engineer permalink
      October 14, 2011

      I think this comment has some gems of insight, but I see some large holes in the logic.

      Which is it – is there an oversupply of new retail spaces, or are they too expensive? The two are mutually exclusive.

      I think part of your comments are focusing on the wrong thing – building height. It’s not about the height, it’s about the design. Narrow storefronts. Wide sidewalks. Narrow buildings. Continuous street-level retail throughout a main street. These are the features we need in our new buildings.

      Take a step back and look at the lively neighborhoods. Capital Hill is filled with apartments and condos, as is the U District. I’m not sure there’s even one single family home in Uptown. So although building heights aren’t that tall (actually, in Uptown and the U District, there are some very tall buildings), there’s a lot of density because there are a lot of dense buildings.

      You argue that we don’t need tall buildings, then argue that we’re trying to upzone too much. I can imagine an argument that we need only, say, 6 story buildings for a lively area. That can absolutely work. But you not only need good design, you need a large area of 6 story buildings to get the density needed. The options, as usual, are up or out. And it’s tough to find people willing to give up single family homes for the “out” option.

      • Bill Bradburd permalink
        October 14, 2011

        Simple supply and demand does not apply here. A property owner will not lease a space that is vacant at a bargain price. Retail spaces here in my ‘hood sit vacant and asking price is (last check) in the mid 20’s. I’m sure that they could rent to someone if they made the rent 15. Why they don’t, you’ll have to talk to a commercial real estate expert. But your statement that oversupply and too expensive are mutually exclusive doesn’t match reality.

        Let me retry to make the larger point. We are forcing the creation of retail space by our zoning rules, rather than by need. We also create conditions that are contrary to our objectives of walkable communities by creating commercial cores that have too much retail capacity and therefore will not be economically viable unless patrons are drawn from areas outside of a walkable catchment thereby necessitating parking and as well as drawing customers from other commercial areas. This then either blights that competing area, or keeps it from developing in the first place.

        • Matt the Engineer permalink
          October 18, 2011

          “you’ll have to talk to a commercial real estate expert” I call foul. You can’t claim to not know the answer to something while telling someone else they’re wrong.

          The reason they sit empty doesn’t matter. Sitting empty with high prices is always a short term phenomenon. Every month the owners pay taxes and mortgage, and over time it will always be a better deal to have someone paying rent at any price than sitting empty. Likely, owners are playing the game that everyone else is – hoping the market will recover, and are afraid to rent out too low a rate.

          I don’t know how you can claim to know whether we’re building too much commercial space. I personally don’t see any significant amount of empty retail in the neighborhoods I visit, and this during a major recession.

          • Bill Bradburd permalink
            October 19, 2011

            Matt, I can show you places that have been vacant for years, or that constantly flip because whatever goes in there fails.

            As I said earlier, I believe the reason is that projects are forced to put in retail because of zoning rules where (just perhaps) retail is not relevant, the market is saturated, the frontage is not pedestrian accessible, or it is simply overpriced for the market because new construction costs more.

            Regardless, you are again missing the point of my post. If we are trying to create walkable, healthy commercial districts, our “one size fits all” zoning strategy fails us for many new neighborhoods. The most successful neighborhood business districts are those that are in older buildings, and at smaller (human) scale. Maybe there is a lesson there…

          • dan cortland permalink
            October 20, 2011

            Two blocks south of the site in the photo, most of the retail space in the John Court building (across the street from Group Health) has been vacant since it was built several years ago.

          • Matt the Engineer permalink
            October 21, 2011

            [dan] The story on that is here. Just like I said – large spaces that are set up to attract big chains for high rents, but the big chains aren’t biting right now (considering constuction finished right before the big financial collapse). The article also mentions that retail spaces in that area are in “fairly high demand”.

            Also, they’re not set up for restaurants – a penny-wise decision I’ve seen many times. Once I was designing the HVAC for a Kent retail space, and the decision against adding duct chases big enough for restaurants changed right near the end of design. “We might get an Olive Garden!”

            It’s not the requirement to build retail that’s caused these spaces to sit empty, it was the gamble to build big retail.

    • Bill Bradburd permalink
      October 21, 2011

      Matt – I think you’ll find most typically that the “big retail” pays LESS per sq ft than smaller shops. In part because they can demand it (they are the ‘anchor’), but also the banks will adjust funding for those larger tenants and that makes that type of space desirable for the developer. And it is of course cheaper to put in a big store rather than demark with many smaller ones, which adds cost to include their stubbed amenities of water, sewer, electrical, ventilation, etc. Again, all working against our goal of smaller, locally owned and frequented retail.

  4. Toby Thaler permalink
    October 13, 2011

    Bill Bradburd’s comment is accurate. I add that many of the businesses that make neighborhoods work are in small and/or older buildings. They are lower cost per square foot. While many thriving establishments are in new developments, if you totally eliminate the older places (rip out the “embodied energy” of the neighborhood) you’ll end up with sterile space and lots less “hop.”

  5. Chris permalink
    October 14, 2011

    Density and activity are not incompatible by any stretch; the retail in the Trace Lofts and Agnes Lofts are two good examples. The challenge for many new buildings is the provision of too much retail, often due to the building location. This is a much rehashed subject. In Belltown’s example, retail is scatter over four large arterials, without critical mass except along portions of first and fourth avenues. We need to continue to encourage more infill residential while limiting the size and location of retail uses.

    • October 14, 2011

      So the direction to head is to have commercial areas that are people friendly with sunshine (especially here in Seattle), places to stand and sit and linger, places to meet, small store fronts with a variety shops, etc with little car/bus/truck noisy traffic, yet density to provide the humanity to make the retail/services work. I’m not against tall buildings. But when they shade the proposed “people places” you get no lingering, and that is exactly what I observed in Ballard on a sunny summer Saturday between 11:00 AM and noon.

      In Phoenix or Houston you may want to be shaded. Not here.

      If a 40 foot building doesn’t pencil out the developer paid too much for the dirt.

      • Matt the Engineer permalink
        October 14, 2011

        I agree with almost your entire comment except the sunshine. Narrow streets with tall buildings are successful throughout the world – not just in warm climates. But if sunny streets are really the make/break issue, it’s pretty easy to design around. E/W retail streets should have very short buildings on the south side, very tall buildings on the north side. N/S retail streets should do the same, except put the tall buildings on the East side (much more street commerce goes on after noon than before).

        That said, I have a feeling what you’re seeing in Ballard is a problem with new buildings throughout Seattle: wide buildings with wide storefronts. This makes for a boring pedestrian experience. We need 20′ storefronts. The block you’re describing has exactly two storefronts – a bank (yawn) and a condo sales office (double yawn).

        • October 14, 2011

          Good solution, Matt. I agree. Easy to design around unless you on the development rights to the property. Then, what do you really care about? Sunshine is a make/break issue for me.

          • Matt the Engineer permalink
            October 14, 2011

            I meant via zoning and building codes.

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