When Sally Branch was the past president of the Hillside Neighborhood Association, the group talked about the lack of quality retail in the area. Now that she is the current president, they’ll almost certainly talk about it again.
“What we want to know,” says Branch, who has lived in the neighborhood behind the Hillside Village shopping center at Mockingbird and Abrams since 1979, “is why we always have to drive west to the Park Cities. Why won’t companies put quality retail here? We’re affluent. We have the demographics. This is a really wonderful location. So why can’t we get a really nice restaurant?”
Branch and her neighbors aren’t alone in wondering about this fact of life. Urban is hip. Urban is in. But no matter how upscale our neighborhood has become during the past decade — no matter how many half-million dollar homes we own or how many Range Rovers we drive — we still don’t seem to count to most national and regional retailers.
Yes, many of them are beginning to realize they need to do business in inner-city areas, and this change explains the influx of drug stores and home improvement chains, as well as the resurgence of the area around the Old Town shopping center at Lovers and Greenville, during the past several years. It’s one reason why one developer is opening a Carrabba’s Italian restaurant in the Lakewood Shopping Center in August.
But most retailers aren’t as flexible as Carrabba’s John Murphy, who is willing to take into account the differences between Lakewood and his restaurants on the Dallas North Tollway, Central Expressway and in Grapevine. Most retailers won’t come to our neighborhoods unless they can do it on their own terms — terms that involve vacant land to build ever larger stores and demographics that dovetail with precisely who they want to shop in their stores. If the area is like East Dallas and Lakewood, with decades-old shopping centers and strip malls that are too small, and affluent residents who can be taken for granted, then all it gets are dollar stores, convenience stores, and fast food restaurants.
“Retailers want to move into the inner city, and these days, that means everything below LBJ,” says Jimmy Christon, a developer who has worked extensively in our neighborhood, including a renovation of part of the Lakewood Shopping Center.
“The biggest problem is finding property for them. They’ll take a look at what you have, but if they can’t find a site at a price that makes sense for them, they won’t do it.”
This process isn’t something they like to discuss, and a variety of retailers, developers and brokers either declined to be interviewed for this story (like the Staubach Co., which recently took over leasing at Hillside Village), or didn’t return repeated phone calls.
Still, it’s possible to piece together what’s going on, and what’s going on boils down to this: All those national retailers we’d like to see — be it REI or Barnes & Noble, Old Navy or Williams-Sonoma — probably won’t be coming here anytime soon.
Here are six reasons why:
Retailers build stores for the people who WILL live in a neighborhood, and not for those who ALREADY live there.
Sound far-fetched? Not really, says John Fox, who teaches at SMU and is a national authority on retailing. National retailers look for specific demographics, a process that has become so sophisticated that it takes into account not just income, but family size, car ownership, population density and shopping habits. Retailers are so eager to get their exact demographics, he says, that they’ll even build stores in areas before the residents get there.
This explains Frisco’s Stonebriar mall (and its surrounding corners, jam packed with strip center after strip center) as well as the West Village in Uptown and Mockingbird Station. The idea: Build your store first, when land prices are lower and before the competition arrives, in anticipation of the boom to come. In Frisco, retailers were salivating over two-income families with kids. At West Village and Mockingbird Station, they wanted young urban professionals who would move into the apartments and town homes under construction in the immediate area. (This philosophy doesn’t always work, of course, as the tenants of Plano’s listing Willow Bend Mall can attest).
In our neighborhood, on the other hand, there’s no opportunity to anticipate. Our residents, who include two-income families with kids and young urban professionals, already are here. The housing already is here. So we don’t fit the current model, and retailers pass on us.
Dallas remains one of the most over-stored parts of the country, and we’re right in the middle of that excess.
One of things that Fox studies is how much retail specific cities have. Dallas usually ranks near the top of that list, and it probably has more stores than the area can support, he says.
Or, in real estate parlance, we’re a “tweener,” says David English, senior vice president for Corrigan Real Estate Services, which leases the Dixie House portion of the Lakewood Shopping Center. That center, like the intersection of Mockingbird and Abrams, is close enough to NorthPark and other regional-style malls (and the strip centers that surround them) that national retailers figure they don’t need another store in the area — they assume, correctly it seems, that we’ll drive to their existing stores anyway. They sit in offices elsewhere in the country, draw circles on a map in radiuses of three miles, and consider everyone in that radius a potential customer.
Retailers want to be near their competition — preferably across the street.
Why did Home Depot build a store at Skillman and Abrams? Because Lowe’s was building a store at Jupiter and Northwest Highway. Why did CVS build a store at Skillman and Mockingbird? Because Walgreen’s built a store at Matilda and Mockingbird. This approach, like putting stores in for customers who don’t live there yet, is another key to understanding modern retailing, says Mickey Ashmore, the president and CEO of United Commercial Realty, a long-time neighborhood resident whose company has both owned and leased the Casa Linda shopping center. (It also explains why Lowe’s and Home Depot put stores near each other in Oak Cliff, an area each probably would have ignored just a couple of years ago.)
National retailers want visibility and to be near other national retailers, including and especially their competition. They want to be on major highways that have lots of traffic and that are close to popular malls. Typical is the Bed Bath and Beyond center just northeast of NorthPark, Ashmore says, which qualifies on every count — size, location, proximity and traffic. You can see them surrounding almost any successful mall, from Town East to the Galleria.
Unfortunately, there aren’t many of these kinds of locations in our neighborhood.
Our strip malls and shopping areas aren’t big enough to accommodate the larger stores that retailers build.
Grocery stores aren’t 35,000 square feet anymore, but 60,000 square feet. A small department store such as Ross needs 30,000 to 40,000 square feet, as do chain bookstores. Even a Starbucks can run as big as 8,000 square feet. And this doesn’t take into account the so-called big boxes like Wal-Mart, Target and Home Depot, which can be the size of three football fields.
Our retail spaces, on the other hand, are just fractions of those sizes, too small for anything but dollar stores, convenience stores and the like. Even as nice a center as Casa Linda is just too small, says Ashmore.
“The layout is obsolete,” he says. “There’s too much small shop space and not enough room to put in a junior anchor like a Ross or TJ Maxx.”
Neighborhood landlords and property owners (many, but not all, from elsewhere) don’t want to renovate to attract better tenants.
Most areas in our neighborhood are too small for most national retailers (both in store size and total area) and also don’t have the required visibility. One solution, Christon says, is to tear down and start over, like his company did at Northlake Center (Northwest Highway and Ferndale) in Lake Highlands, or to make extensive renovations, which is how the Centennial and the Starbucks ended up in the theater section of the Lakewood Shopping Center.
The catch is that too many center owners aren’t interested in making that kind of investment, which can run into the millions of dollars. Their holdings are already profitable, so why spend money on something that may turn out to be less profitable? The center owners also may be absentee landlords, so the quality of the tenants doesn’t bother them quite as much as it does the neighborhood. Since these locations are so profitable, they’re unwilling to sell them unless they can get top dollar. The Bronco Bowl site that Home Depot bought in Oak Cliff went for a reported $6 million.
Finally, the competition can be so intense for the land that is available that only the most high-dollar projects will succeed. Christon says he was interested in renovating the strip center at Mockingbird and Skillman, and that several national retailers were looking at the deal. But he lost out to CVS, which was so desperate to get a foothold in the neighborhood that it handily outbid everyone else. And that was just to lease the property, not to buy it, Christon says.
Many otherwise prime retail sites are owned by more than one group of people, making the decision-making process to renovate that much more difficult.
This is a uniquely neighborhood dilemma. It’s not unusual for four different corners to be owned by four different groups, such as Mockingbird and Abrams. That makes decisions to renovate difficult (why spend money to upgrade your center if the guy across the street isn’t going to?), but not impossible.
Where it becomes almost impossible is in situations like Skillman/Live Oak or Lakewood, where each sliver of the area is owned by a different group or person. That sort of situation requires coordination not only in attracting tenants, but in design and architecture concerns. Which, given five or six owners, says developers and brokers, is usually so difficult it’s not even worth trying.
So what’s the conclusion? When will Ralph Lauren open a Polo Store in our neighborhood?
The best answer: Don’t hold your breath. As long as we’re willing to drive to Highland Park Village, and as long as the ownership of neighborhood centers doesn’t change much, Preston and Mockingbird is probably as close as the polo pony will be to us.
