Thinking about chains in our unique downtown

In my City Talk column in the Savannah Morning News today, New Year brings changes to Broughton and Congress Streets, I focus briefly on Fuddruckers, which just closed on Broughton Street. Ever since I’ve been writing this column — over 10 years now — I’ve been hearing from readers about how chains will drive out small, locally owned businesses. Most of the local investors interested in economic development, however, have been eager to attract more chains, under the theory that a diversified shopping area that attracts a broad customer base needs a variety of stores.

While downtown Savannah commercial rents increased during the boom years and have probably remained higher in some cases than they should be, it turns out that locally owned places are still competing just fine. As I say in my column:

Evidence from recent years does not support the conclusion that chains will inevitably drive out local businesses. In the case of Fuddruckers, we’re seeing just the opposite: The closing of a chain and the impending opening of a one-of-a-kind spot. Shipwreck Bar & Grill is supposed to open later this year.

And chains sometimes come with chains. Depending on the type of “chain” (a term applied pretty broadly to both locally owned franchises and stores managed by a corporation), sometimes there are large franchise fees, while advertising and marketing are constrained by the corporate brand. At the same time, many locals and visitors consciously seek out local businesses. After Utrecht opened an art supply store downtown, Primary Art Supply began actively to promote itself as a local business — a true opening in the world of marketing.

Readers’ other concern for downtown Savannah — and for many other resurgent downtowns — has been that chains will destroy a sense of uniqueness. In other words, Broughton Street will no longer be uniquely Savannah with GAP, Banana Republic, Panera, Starbucks, Urban Outfitters, Kinko’s, the impending McDonald’s, etc. It’s a matter of perception obviously, but I’ll note that most current Broughton Street businesses — no matter their ownership — occupy spaces that were either vacant or underutilized just a decade ago. If a recognizable chain goes into a vacant building, does it truly change the atmosphere? I don’t think so, but I can see why others do.

Broughton Street should be somewhat resistant to quick changes in its atmosphere because of the existing architecture and infrastructure. Chains for the most part are not going to be interested in the strip’s narrow storefronts. The recognizable names that have taken narrow spaces — like Birkenstock and An American Craftsman — hardly feel a cultural threat. And the larger spaces are hardly attracting cookie cutter enterprises. Urban Outfitters has tailored itself to the gorgeous building that it occupied a couple of years ago. Marc Jacobs is a particularly interesting case of an international name with relatively few locations; the company has beautifully transformed a space that would have been incredibly challenging for a local entrepreneur to renovate, stock, market, and operate. The general gentrification of the street has meant the dwindling of businesses with largely black clientele — that has certainly changed the personality of the street (for the worse I think) but some of those businesses seem to have relocated to spaces in closer proximity to their core shoppers. And few of them seem to have made any conscious effort to tap into the increasing number of tourists over the last 20 years.

Chains can lure shoppers who then have to walk by local spots that have few advertising dollars. Chains can provide opportunities for worker mobility into corporate offices or to other cities.

In sum, I think the fear of chains is largely misplaced. I won’t eat at the McDonald’s coming to Broughton Street, but I don’t think it will have the dire consequences that some expect.

3 comments for “Thinking about chains in our unique downtown

  1. matthew
    January 9, 2011 at 2:10 pm

    When I worked at Globe Shoe Company, Seymour, the late owner, was often asked a variation of this same question. He always said that he dreamed that a Nordstrom would open on the corner because he knew he could compete and it would entice a whole additional clientele that otherwise wouldn’t go to Broughton Street. Even the opening of Bananna Republic was transformative, the additional ‘fashion’ shoppers were visisble nearly immediatly.

  2. Dan
    January 11, 2011 at 10:27 am

    The only objection I have to your post is the use of the word gentrification and its correlation to an exodus of black business from Broughton. I believe that historically the core of the black business community along the MLK corrridor and that it decayed as integration took hold and more shopping opportunities were available to the minority population. This was an economic change. Patrons were switching providers and it caused some to rise and some to fall. The eventual growth of black businesses along Broughton Street was in direct relation to the growth of business centers in closer proximity to the new suburban growth to the south of the city core. The city was increasingly percieved as dangerous and those who could afford to left. There was definitely a racial tone to this as those who could not afford to leave were inner city poor and mostly minority. They mainly did not own the infrastructure they were utilizing and so much of their wealth was directed out of the downtown in to the suburbs (through rent) where the owners lived. The minority, or by this time majority, businesses that invested in the Broughton corridor as it became affordable (or decayed in percieved value) either remain or have profited from the sale of their buildings and moved to be closer to their target clientele. That part of it is not gentrification. That is business in the classic sense. My main objection to that word is that implies that quality and value are reserved to a “gentry” that does not include the urban poor. The poor should have access to quality and value as well. Fixing up a building is a good thing. Providing a ggo product is a good thing. Limiting who has access is a bad thing. I have written to you before about the City of Savannah tax structure. I have buildings in a “poor” area near Waters in the 30’s. I make sure that the apartments are well maintained, attractive and affordable (in line with the rental rates in that area.) As long as I left the outside of the building looking run down my taxes did not change. As soon as it was fixed up, painted and repaired my taxes were hiked up by a third. If (in addition to the cost of repairs and maintenance) I now have to pay an increase of revenue to the city for looking decent I have to raise my rents. The “gentrification” effect is the fault of the way Savannah treats property improvement not the improvement itself. Back to Broughton Street – as the retail environment slowly turned around the city percieved that the properties were more valueable and imposed higher taxes even on unimproved buildings. Rents reflect taxes and improvements. If taxes were mitigated for real improvement the investment would balance out. Improvements would be made to attract business and not to justify higher and higher rents to satisfy increased financial pressure on owners. The other part of this is that the home owner tax freeze is counter productive. New residents and all businesses are asked to take on the financial burden of operating the city. This means higher rents to maintain revenue flows for city operations. I understand some of the reasons – fixed income etc.- but the net result has been a disproportionate burden on business and those who either cannot afford to own a house or are recently investing in housing stock. Gentrification is too glib and incendiary a term for how this is working in Savannah.

    • bill dawers
      January 11, 2011 at 11:06 am

      Thanks for the post. You make excellent points — I agree that the term “gentrification” is too loaded to apply here. I agree with you wholeheartedly regarding property taxes as well.

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