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Old Posted Apr 21, 2017, 4:06 PM
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Should Cities Limit Chain Stores To Help Promote Small Business

Retail revolution: should cities ban chain stores?


20 April 2017

By Colin Horgan

Read More: https://www.theguardian.com/cities/2...stores-toronto

Quote:
.....

Although banning or limiting chain stores is a controversial way of trying to help small businesses, it has boosters – and precedent.

- In 2006, Nantucket, Massachusetts, banned chain stores from its downtown. In 2015, Jersey City in New Jersey voted to restrict chain stores to 30% of ground-floor commercial space in its downtown core, with some exceptions. That same year a community group in New York City’s East Village released a report proposing limitations on chain stores. --- This area of Manhattan already restricts store frontage sizes and certain changes of store use, but the East Village Community Coalition argued for more: “Placing restrictions on formula retail establishments via zoning amendments provides a path to preserving the rapidly changing East Village,” it said.

- Most famously, in the mid-2000s the city of San Francisco adopted policies to limit chain stores, known as “formula retail”. Broadly speaking, the city defines formula retail as stores with 11 or more locations anywhere in the world, a uniform aesthetic, and a few other criteria. The rules differ neighbourhood by neighbourhood: some areas welcome formula retail, others don’t. Has it worked? --- One of the strictest neighbourhoods in San Francisco is Hayes Valley, which has an outright ban on formula retail. Hayes Valley was once partly covered by the elevated Central Freeway, which was demolished after an earthquake in 1989.

- Relieved of the freeway, the neighbourhood – once an area many San Franciscans avoided – became fashionable almost overnight. “It just flourished like crazy, because it was suddenly under sunlight,” says Dee Dee Workman, vice president of policy for the San Francisco Chamber of Commerce. --- But Workman also argues that the decision to ban chain stores, intended to make the neighbourhood more community-oriented, had the opposite effect. “There used to be a lot more of neighbourhood-serving retail there … retail that people could really use,” she says. The ban on chain stores changed that.

- “What you have now are a lot of non-neighbourhood-serving retail: very, very high-end expensive little boutiques, selling super expensive shoes and purses and things.” This excludes residents, she argues. “The people who have traditionally lived in that neighbourhood, who are lower-income and are hanging on by their fingernails, there’s really nothing there for them,” Workman says. “I would say in that case, the formula retail ban is counter-productive.”

- A different experiment has taken place in Britain, where successive Labour governments have attempted to combat the Thatcher-era encroachment of gigantic superstores and supermarkets on city centres, with planning guidelines that limit square footage – effectively making it difficult to open large retail spaces. The result was a proliferation of smaller spaces. Tesco, for example, is just one of the supermarkets that has studded British urban high streets with small branches such as Tesco Express or Tesco Metro. ---
Harvard Business School’s Rafaella Sadun has used the British example to examine whether planning regulations protect independent retailers. She concluded in a 2013 report that the regulations backfired: the big chains simply set up smaller outlets.

- It was a similar case in Vermont, where a longstanding ban on big-box stores failed to prevent the proliferation of discount “dollar store” chains, which squeaked in under the zoning limits. In 2012, the residents of Chester sued Dollar General for opening a store near the town centre. The case went to the Vermont Supreme Court, which ruled in favour of Dollar General. France has had tough regulations against large chain outlets since 1996, when the Raffarin law restricted the size of hypermarkets. By 2009, according to the Organisation for Economic Co-operation and Development (OECD), the floor area of hypermarkets was around 20% less than in the UK.

- But the OECD reported that while the laws “have not really succeeded in halting the steady decline in the ranks of small shopkeepers, they have helped stabilise the market share of small-scale food retailers”. However, the laws also “allowed the large, long-established groups to strengthen their market position, undermining competition in many regional markets”. Nevertheless, the idea of limiting chain stores appears to be catching. Shortly after Layton’s proposal in Toronto, a group in Vancouver floated the idea that the city should not only ban chain stores from certain areas, but tax empty storefronts, too.

- “Many whole blocks of independent businesses are taken out, and what might go in are one of the big five banks and chain stores,” Amy Robinson of LOCO BC told CTV News. “What we’re really concerned about is the loss of affordable space for independent businesses.” --- That’s exactly what small businesspeople like the Cat’s Cradle owner Pritchard and his co-owner Mark Citron on Yonge Street have seen: a once-vibrant area dry up. To them, regulation of some kind sounds like a good start to controlling not only who operates in the area, but perhaps their ever-rising taxes as well.

.....



Chain stores in New York, where some activists are proposing ‘formula retail’ be limited to preserve the character of different neighbourhoods. Photograph: Getty







‘Dominated by multistorey facades of bright corporate advertising’ … Yonge Street in Toronto, Canada. Photograph: Alamy







Graffiti in Stokes Croft, Bristol, where a riot broke out in 2011 after police engaged with protesters against the opening of the city’s 32nd Tesco branch. Photograph: Sam Frost







Vesuvio cafe in San Francisco, where some neighbourhoods strictly limit chain stores. Photograph: Alamy


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Old Posted Apr 21, 2017, 4:30 PM
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Well, since I live in one of the cities mentioned that does limit formula retail, I can say it has good points and bad points. It does what it is supposed to do which is allow the flourishing of mom/pop (more often 2 twenty-somethings) boutique retail but it also puts a lot of stress on Amazon delivery people. Since we have no Way-Mart and or other "big box" stores (2 exceptions: a single CostCo and a single Lowes), I buy an awful lot of staples and non-perishable items from Amazon and Walmart.com at sometimes half the local prices.

I actually live near Hayes Valley which was mentioned in the article but I don't shop there. I go there fairly often to eat--lots of restaurants that I suspect might be there anyway--but since I am not a shoe fetishist, there's not a lot in the stores there I want to buy (or want to pay the prices they ask).

My bottom line is that I am OK with this policy on individual streets in certain high end neighborhoods only, but the city as a whole should allow the sort of discount shopping venues most Americans take for granted and that provide the less affluent with all sorts of inexpensive goods. The lack of such places in San Francisco is one more reason nobody but the rich can afford to live here.

Hayes St.

https://images.search.yahoo.com/sear...g&action=click

PS: San Francisco does have its district of high end retail like Chicago's Miracle Mile, New York's 5th and Madison Aves and, I presume, Yonge St. It's around and near Union Square--here you find 5 or 6 major department stores, Cartier, Tiffany, Van Cleef, Apple, Nike, and Prada and numerous other designer shops. No big box style discount though. Target did recently open a "City Target" which has limited offerings.
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Old Posted Apr 21, 2017, 4:37 PM
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Interesting question. There's obviously some very difficult issues when it comes to neighborhood renewal and pricing local business out of the market. In this case though with escalating rents the only stores that could survive are speciality luxury stores with huge mark up and profit on a few products. This case shows how neighborhood livability suffers. While we might think the old building is an eyesoar it is really an important part of the makeup in a healthy urban environment.

I like to think of it like the backyard. Sure, you don't like the ugly piece of rotting fence in the backyard, but that is hosting bugs that make your soil healthier for your flowers and habitats for small birds that eat annoying mosquitos. All in all, a little bit of eyesore is potentially making your backyard more liveable.

There is certainly something I like about non-chain stores. It means that when I visit a city I get a feel for that city instead of the same stuff I could see anywhere. For me familiarity generally breeds contempt. While I sometimes just want something familiar, when all the options are familiar I am bored. The balance is what is important.
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Old Posted Apr 21, 2017, 4:44 PM
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Formula retail doesn't have to have much to do with old buildings. Outfits like Walgreen's and CVS are adept at putting locations in historic buildings (after renovation) and so are fast food outfits. Even Home Depot has some impressive retrofits in downtown areas. So allowing formula retail doesn't mean you bulldoze the site and put up a cheap modern structure necessarily--that can be controlled by other methods.

As for rents, the general argument is the formula folks can afford higher rents than one-of-a-kinds, even higher end one-of-a-kinds. It's the fact that they can afford such rents and their willingness to pay them drives up overall rents to levels one-of-a-kinds can't afford that is the justification for a legal ban.
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Old Posted Apr 21, 2017, 4:50 PM
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Perhaps the streetfronts of the touristy and historical streets can maintain the unique shops, and have space for chain stores on other streets.
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Old Posted Apr 21, 2017, 4:57 PM
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Store size and chain vs. non-chain are separate topics, though they can influence each other.

Seattle has examples where favoritism works. Laws about putting calories on menus, setting work schedules weeks in advance, and minimum wages are all different depending on the employee count or the number of locations. We've never been as chain-dominated as some cities, but these have helped solidify this fact.

Also I'm a couple blocks from the Pike Place Market, which is run by a public PDA...the only chains are the ones that started there including Starbucks and Sur La Table. Even having two locations is rare...I'm thinking Beecher's.
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Old Posted Apr 21, 2017, 5:27 PM
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no, that would be stupid. riding on the coat tails of gentrifcation and white guilt, now we apparently are entering a era of retail guilt as well. feeling bad about being too successful. leave it to san francisco to try such a thing. cities should not engage in social engineering to further their local agendas. but that's the problem with far left city government, they think they know what is best for their citizens. don't get me started on soda tax.....cbd's are for business and tourists, many of whom are foreign and probably are attracted to big box america retail. neighborhoods are for locals and mom and pops flourish better in those environments anyway. city commerce should grow organically in response to the free market...rent too high? open up elsewhere. that's the way its always been. already expensive cities trying to mitigate high expenses are a day late, and many hundreds of nimby dollars short....
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Old Posted Apr 21, 2017, 5:30 PM
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No. Let consumers decide what and where they want to shop.
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Old Posted Apr 21, 2017, 5:32 PM
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No, just build enough retail space so lower margin businesses can afford rent.
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Old Posted Apr 21, 2017, 5:35 PM
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Isn't brick-and-mortar retail disappearing anyway?

I know, just playing devil's advocate. I got into a brief conversation with someone regarding this; those spur-of-the-moment, suddenly needed purchases can't be handled by ordering something online: "I need a new tie for my cousin's wedding in 3 hours! F*UCK!" So of course you're gonna run into a store to buy a necktie, you're not gonna order it online.
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Old Posted Apr 21, 2017, 5:42 PM
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The City of Toronto has no power to ban chain stores. Do other cities have that power and how is it accomplished?
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Old Posted Apr 21, 2017, 5:43 PM
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Just like how there's heritage buildings perhaps a process can be set up to decide whether a neighbourhood should be preserved, or a particular street.
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Old Posted Apr 21, 2017, 5:53 PM
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Quote:
Originally Posted by isaidso View Post
The City of Toronto has no power to ban chain stores. Do other cities have that power and how is it accomplished?
Quote:
Formula retail uses are regulated by the San Francisco Planning Code. To maintain the character and purpose of distinct areas in San Francisco, the City's geography has been divided into distinct zoning use districts (view these zoning use districts on the San Francisco Zoning Map and Section 201 of the Planning Code). For each activity or use of land in any given zoning district, the Code states if that activity or use is either: Permitted; Conditional; or Not Permitted . . . .

According to the Planning Code, in specified zoning districts, formula retail uses are subject to additional regulations and processes than would otherwise not be the case for the same use in the same zoning district were it not a chain or "formula retail" store.

Here are the most common regulations a formula retail use will need to consider:

Pre-Application Process & Neighborhood Notification requirements
Formula retail uses in Neighborhood Commercial districts (NCD), Eastern Neighborhood (EN) districts, and the Western SOMA Special Use District (SUD) district will require you complete the Neighborhood Notification Process. If your project requires Neighborhood Notification, the Planning Department mails a notice alerting neighbors and neighborhood groups in the vicinity of your proposed project and they are given a period of 30 days to respond with concerns or to request a Discretionary Review (DR). Depending on the scope of your project, you may also need to provide a "Pre-Application Notice" to nearby neighbors, and/or you may need to hold a "Pre-Application Meeting." The triggers for the Pre-Application Process are explained in the Pre-Application Information Packet.

Formula retail subject to "Conditional Use Authorization" (CU) in some zoning districts
For each activity or use of land in any given zoning district, the San Francisco Planning Code states if that activity or use is either: Permitted; Conditional; or Not Permitted. If you would like to conditionally permit a formula retail use, a Conditional Use Authorization Application must be submitted. Following submittal, your project will be reviewed by the Planning Commission at a public hearing. The Commission will make findings that your project is consistent with the San Francisco General Plan and promotes the general welfare of the City.

By a voter initiative in 2007 (Proposition G), formula retail use was made subject to a Conditional Use Authorization in any NC district, if not otherwise prohibited.

A Conditional Use Authorization is also required for formula retail uses in Residential Commercial Combined (RC) districts: RC-3 and RC-4, Urban Mixed Use (UMU), Mixed Use General (MUG), C-3-G with frontage on Market Street between 12th Street and 6th Street, and Residential Transit Oriented (RTO) districts, and in the following Special Use Districts: Western SoMa, and Japantown.

Formula retail completely prohibited in some zoning districts
As of May 2011, formula retail was prohibited in the Hayes-Gough NCD, North Beach NCD, and Chinatown Visitor Retail district.
http://sf-planning.org/chain-stores-formula-retail-use
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Old Posted Apr 21, 2017, 5:56 PM
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Does it still count if a local business becomes a chain? Asheville is home to a few restaurants that, like kudzu, are beginning to creep across the South, sinking deep roots into cities and towns everywhere in the area. Tupelo Honey, an upscale Southern restaurant on College Street downtown, has opened fourteen other branches. Likewise, Chai Pani, an Indian place on Battery Park Avenue, has colonized Atlanta. Papa's and Beer, the (not "a," the) Mexican place is on pace to take over the Carolinas and Tennessee from their flagship palace of flavor in Hendersonville.
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Old Posted Apr 21, 2017, 6:00 PM
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Quote:
Originally Posted by hauntedheadnc View Post
Does it still count if a local business becomes a chain?
In SF, yes.

Formula retail is defined as a store having:

Quote:
eleven or more other retail sales establishments in operation, or with local land use or permit entitlements already approved, located anywhere in the world. In addition to the eleven or more other retail sales establishments located in the World, maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.” In other words, retail stores with multiple locations and a recognizable "look" or appearance.
http://sf-planning.org/chain-stores-formula-retail-use

Doesn't matter where the first store was. Once they hit 11 they are subject to the ordinance. The existing locations can stay but new ones have to comply which can mean they are prohibited.
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Old Posted Apr 21, 2017, 6:08 PM
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Note that the most unfortunate and perverse aspect of this policy can be blight. In most cities there are well-known "difficult" (sometimes called "unlucky") retail locations where multiple stores have failed. These locations become hard to fill. San Francisco has some and in some cases national chains, realizing more competitive spots might be hard for them to occupy, have chosen these unwanted spaces. In more than one case, they have still been turned down and a retail space that may have been vacant for years remains vacant.
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Old Posted Apr 21, 2017, 6:51 PM
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Portland had a notorious case recently where a trader joe's wanted to move into north porltand. Neighborhood activists tried to cock block it on the grounds that it was only catering to high income households and that poor, long time locals were being left out (ie trader joes contributes to gentrification because of its average clientele). But have you seen tj prices?? The neighborhood group wanted the city to try and promote a strip mall that would have local business go in, instead. well its still empty, and the proposed anchor tenant (natural grocers??) hasn't started building yet. the city also sold the property for about 2million dollars below market value.....that's weird....
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Old Posted Apr 21, 2017, 7:06 PM
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Originally Posted by Pedestrian View Post
As for rents, the general argument is the formula folks can afford higher rents than one-of-a-kinds, even higher end one-of-a-kinds. It's the fact that they can afford such rents and their willingness to pay them drives up overall rents to levels one-of-a-kinds can't afford that is the justification for a legal ban.
It seems to me that the answer is analogous to the answer in residential - loosen zoning to allow for more new-construction commercial nearby. This will come at a premium, and the chains will move there. At the same time this will keep legacy commercial structures, which will be smaller, at lower prices.

Maybe it should be combined with historical preservation, to ensure that developers do not simply buy out three storefronts with 16-foot frontages, demolish them, and make a new more chain-friendly retail space. But that's about it.
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Old Posted Apr 21, 2017, 7:11 PM
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I'd like to see more multi-story retail here like they have in Japan which gives lower margin businesses more affordable spaces to operate in highly desirable commercial corridors.
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Old Posted Apr 21, 2017, 8:14 PM
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I'd like to see more multi-story retail here like they have in Japan which gives lower margin businesses more affordable spaces to operate in highly desirable commercial corridors.
I'm sure this subject has come up before. I'm pretty sure that the ADA requires elevators for any multi-story commercial building now, along with existing buildings if you spend over a certain threshold on refurbishing them.
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