BEING A DOWNTOWN CHANGE AGENT: Facilitating Change for Downtown Business Operators

Small Business Operators Are Slow To Adopt Changes

At conferences and other events where downtown managers congregate, the conversation at some time usually turns into a group therapy session focusing on the seemingly intractable, but certainly dysfunctional attitudes and behaviors of downtown business operators and landlords. Some of the dysfunctional behaviors raised might include deteriorating facades and signs, poor market research, lousy merchandising, “wrong” business hours, inadequate customer service, high rents, poor building conditions, harmful tenant selection, etc. Many readers, I am sure, know the rest of the litany.

Many downtown managers also consider it almost impossible to “re-educate” most downtown business operators and landlords or to otherwise induce them to improve their business behaviors. Years ago, based on my own management experiences and field observations as well as reports from friends managing downtown districts across the country, I came to a kind of Bayesian subjective probability estimate that only about five to seven percent of downtown business operators and landlords can be retrained or otherwise induced to innovate.

However, more recently, based on my program development experiences in the Bayonne Town Center (NJ), I have come to believe that significantly more downtown business operators can be induced to change, if, and this is a critical if, downtown leaders, acting as change agents, can help make it easy for them to change.

How To Get Existing Merchants To Renovate Their Facades?

About four years ago I took on the management of the Bayonne Town Center Special Improvement District. The previous executive director had done a great job of getting a highly respected architect, Walter Chatham, to write design guidelines, which were then adopted by the city as an ordinance. The city was offering then, as it still offers today, strong financial incentives to stimulate façade and storefront renovations in the district: a shop with a frontage of 25 feet can get a grant for as much as $10,000; a corner shop can get up to $15,000. However, while new businesses in the district were improving their facades, none of the existing street-level business operations were doing so, though many storefronts badly needed renovation. Officials in city hall as well as the Town Center board of directors could not understand why the city’s generous financial incentive package was not stimulating more façade improvements in the district.

While I quickly ascribed this situation to the typical change -adverse way I believed small downtown business operators behaved, my intellectual curiosity and feeling of management responsibility led me over the next year to talk informally to many merchants about why they were not improving their facades. Here are the surprising conclusions I reached as a result of those discussions:

  • A lot more merchants than I expected were interested in improving their facades. My rough estimate would be somewhere between 20% to 25%, not my expected 5% to 7%.
  • Merchants who owned their buildings were more apt to be interested in renovation than those who leased their spaces. This was understandable since they had more to gain and one less decision-making gatekeeper to deal with
  • Almost no one had any idea of what kind of new façade they might want!
  • No one felt they had a good idea of how much a façade renovation might cost!
  • Few knew an architect or contractor who might help them! Most small business people will not have architects or contractors in their social networks. They often work long hours and lack the opportunities to establish such contacts on their own
  • There was wide spread concern about getting city approvals for their projects!
  • Almost everyone knew about the city’s façade improvement financial incentives.
  • A minority of those interested in doing a facade improvement felt that even with the city’s financial incentives, they still could not afford to renovate
  • Most of those interested in improving their facades felt that, with the city’s financial assistance, they probably could afford to renovate. They were not moving forward because they did not know how to proceed and lacked the time and energy to remedy this situation!

Facilitating Change

As I mulled about these findings some research I had done in 1989 came to mind. Back then I was trying to find out why manufacturing firms were moving out-of-state from the Bronx, a borough of New York City. My research indicated that:

  • These firms were successful, expanding and needed more space

  • They were too small to have a real estate specialist on staff
  • Management was too busy with their growing business to look for a new location
  • They often need specialized training for their blue collar workforce
  • They had concerns about high crime
  • Recruiters from out-of-state economic development organizations had come in and offered turn-key solutions that included low-cost new space, manpower training, low crime, etc. The recruiters made it very easy for the Bronx firms to move to their states. In other words, the recruiters had facilitated change.

A program that could facilitate change seemed precisely what was needed to unleash façade improvements in the Bayonne Town Center.

The Jump Start Façade Improvement Program

Consequently, I designed the Town Center’s Jump Start Façade Improvement Program sm.

This program provides each participating business operator with the following products and services:

  • A well-known architect in the field, Margaret Westfield of Westfield Architects visits with them to listen to any ideas they might have about their new façades
  • She comes back several weeks later with a rendering of their new façade, cost estimates for the improvement project and samples of the materials that should be used
  • The façade design, because it is done by one of the Town Center’s architect’s in conformance with its design guidelines, has assured acceptance by the city
  • The Town Center’s staff, if necessary, helps participants with the paper work for the city’s incentive program and provides them with contact information about contractors who have done successful façade projects in the district.

Of the five storefronts in the initial round of the program, two renovations have been completed and three are in process, with completions expected by August 2007. A second round of Jump Start has been completed recently. One entire building façade has been renovated; action on six other storefronts is awaited.

The slide show below shows three of the improved building facades, before and after their renovations.

The Kick Start Building Renovation Program

Based on the success of the Jump Start program, the management of the Bayonne Town Center leaped at the opportunity to obtain a technical assistance grant from the Community Preservation Corporation (CPC) to create the Kick Start Building Renovation Program sm. Kick Start is aimed at stimulating district landlords to renovate the upper stories of their buildings and create market-rate residential units.

The CPC is a very large and successful nonprofit that uses CRA funds from over 80 banks and insurance companies to fund housing projects in NY, NJ and CT.

The Kick Start “treatment strategy” is again to facilitate change, this time by having the CPC’s architect-engineer provide each participating Town Center landlord with a feasibility study that describes how many residential units might be built on their property, the types of units that should be created and cost estimates for the project. The CPC also will be ready to finance feasible projects. Furthermore, because of the CPC’s reputation, it is anticipated that the feasibility studies will help ease their associated renovation projects through the city’s permissions and approvals process.

At the time of this blog posting, Kick Start is underway, but none of the three initial feasibility studies have been completed.

Facilitating One Change Can Help Facilitate Other Changes

As consultants have long known, developing a client’s trust and confidence in you and your firm is essential for having your recommendations implemented. Downtown managers, when acting as change agents, face a similar challenge with the business operators and landlords in their district. The Jump Start Program has helped to significantly increase the trust and confidence that district business operators and landlords have in the Town Center’s management team. This is true even among those who have not participated in Jump Start, but knew what happened in it. This has stimulated not only interest in participating in Jump Start and Kick Start, but it has also made some landlords more willing to work with us on business recruitment and redevelopment projects.

Some Additional Observations

My experiences with Jump Start strongly suggest that money, while not a negligible factor, is certainly often not the prime factor that impedes change and innovation among small downtown business operators. Knowing what can be done and easy access to needed professional assistance are also very strong factors.

The city’s permissions and approvals process also can have an enormous impact on downtown change and innovation. The Town Center has city legitimated design guidelines and its architect determines whether or not submitted designs are in accordance with them. The Town Center is thus able to provide designs for renovated facades that are guaranteed to be accepted by the city. This factor alone reduced anxieties about delays and escalating costs among the participating business operators.

Downtown Friendly Store Formats, Facades and Signs

Over the years I have seen downtown developers, landlords and store owners propose retail store formats, facades and signs that are appropriate only in a highway or shopping center setting. They invariably claim that the retail chain demands exactly what they are proposing. Sometimes they go on to claim that their way is the only way the chain does things. Consequently, I have tried to accumulate photos that can be used to disprove these assertions. I have tried to find examples that are “downtown friendly,” i..e., that have appropriate scale and acknowledge and encourage pedestrian activity. I have also included some that I just plain like — as well as examples of some things to avoid.

This posting is an elaboration of two earlier postings on this subject. More photos will be added periodically over time. A slide show on this posting is provided below.

Downtown Friendly Store Designs 2 – Subway

What happened a few years ago when a Subway opened in the Bayonne Town Center demonstrates an important point — it isn’t always the retail chain that causes problems with a new store’s façade or signage.

The franchisee opened his shop and mounted a back-lit sign without getting necessary approvals from the city. City approvals require a letter from the Bayonne Town Center Management Corporation (BTCMC) stating that the design of the new façade (including signage) is in compliance with its façade design guidelines.

The franchisee finally applied for BTCMC approval, but, since the guidelines prohibit back-lit signs, the design was rejected. The city made him remove his sign. The franchisee maintained that Subway required the use of back-lit signs and that if he could not do so he would have to close his shop. His landlord became irate about possibly losing a quality tenant — and the BTCMC certainly wanted the Subway in its district.

The situation was saved by Walter Chatham, a well-known architect who the BTCMC hired to review new façade designs and assure their compliance with its design guidelines. Chatham noted that Subway used a number of sign formats and that the one they used in historic districts would be in accord with the design guidelines. Begrudgingly, the franchisee put up the sign suggested by Chatham.

I learned from this experience that chains can have many formats for their storefront signs. To illustrate this point, I have posted above three Subway signs from Bayonne, NJ; Forest Hills, NY, and Columbia, SC. (If the signs are not visible, double click on the empty boxes where they should be.) Such variation can allow the signs to fit in better with the overall design of the buildings in which the Subway stores are located. This makes good business sense.

In this case study, the problem was caused by a franchisee who tried to avoid abiding by existing rules and regulations — not the chain.

This case study also shows that it is great to have design guidelines, but real enforcement is essential if they are to have their intended impacts.

Downtown Friendly Store Designs 1 – Wal-Mart

This is the first in a long series of planned postings intended to demonstrate that a whole slew of major retail chains can — when they want to or are “induced” to – come up with attractive designs for their downtown stores that encourage pedestrian traffic and cross-shopping, while not visually violating the urban fabric. My goals in these postings are to:

  1. Encourage downtown leaders to demand downtown friendly store designs from retailers, no matter how strong and powerful they may be
  2. Provide examples of downtown friendly designs that many of these chains may deny having
  3. Feature some retailers who have shown that they really understand how to fit into a tight urban fabric and do so with strong and successful stores.

For many downtown leaders and activists, Wal-Mart is Public Enemy No.1. It is, therefore, very interesting that Wal-Mart opened in 2002 a very out of character store in CityPlace, a mixed-use development in the heart of downtown Long Beach, CA. (See photo:double click on it for larger view.) This development has 450,000 square feet of retail space and 341 residential units. Retail tenants include Wal-Mart, 134,147 square feet, Albertson’s, 57,945 square feet, Sav-on, 14,884 square feet, Nordstrom Rack, 29,945 square feet, Ross Dress For Less, 28,073 square feet, and scores of smaller operations occupying the remaining space.

The fact that Wal-Mart is anchoring a major downtown open air shopping center with many small stores opening nearby is in itself out of the ordinary. However, the design of the store is also unusual in that it tries to avoid long dead walls, incorporates other stores in an attached “sleeve” and provides parking in a nearby garage. The design seems intended to allow the smaller store to benefit from the customer traffic Wal-Mart generates.

The CityPlace Wal-Mart overcomes the design problems of the Wal-Mart in downtown Rutland, VT, where a huge parking lot in front of the store serves as a moat separating it from the rest of the downtown.

If Wal-Mart can come up with this type of store design in Long Beach, then it is reasonable to demand that it provide store designs of similar quality and sensibility in other downtowns.

If Wal-Mart can do it, then it also is reasonable to demand that other retailers do the same. As I will try to demonstrate in future postings, many, many retail chains are quite capable of opening stores with downtown friendly designs — unfortunately, they often have to be banged over the head to do it. Often, problems are generated not by the rertail chain, but by the developer or franchisee.