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Colonized by box stores

Just what Allen County needs: more abandoned strip malls

By Michael Summers

michael_summers@fortwaynereader.com

Fort Wayne Reader

2004-06-28


We hear it constantly: Fort Wayne is a growing city. In fact, we don’t need to be told. We see it everyday. Housing developments seem to pop up overnight like fresh crops; new construction projects are as much a staple of the summer months here as humidity, mosquitoes, and the Three River Festival; and enormous grocery stores cover what was formerly farmland.

And the strip malls. My God, the strip malls. It’s as if we decided to enter a competition to see how many nationally-owned chain mega-stores we can slap down willy-nilly in a certain square mile radius.

It all adds up to the impression that Fort Wayne isn’t growing as much as it’s sprawling, like one of those gelatinous masses that occasionally washes up on a beach somewhere and puzzles scientists for a couple weeks.

Suburban sprawl is obviously nothing new. It’s a phenomenon city planners and other experts in urban development all over the country have been talking about for decades, and only recently, it seems, has Fort Wayne become familiar with its symptoms: traffic congestion, pollution, noise… and retail outlets. Miles upon miles of retail outlets, often featuring the enormous, warehouse-like national chains, the mega-marts and super-centers, that many people refer to as box stores.

Just as an example, take a look at the Jefferson Pointe area. You’ve got Jefferson Pointe mall itself, which features a number of national chains, surrounded by a number of national chain restaurants, and is right across the street from a Wal-Mart Super-Center, a Best Buy, and a Petsmart. Across the street to the North is a Lowe’s. Just a mile or so down Illinois road is another one-stop mega-store (Meijer’s) and another home-improvement warehouse (Menard’s). Go Southwest down Jefferson towards where it meets Getz road, and you’ll find Walgreen’s and CVS across the street from each other. Then there’s a new strip mall going up right next to the Village of Times Corners, despite the fact that the Village of Times Corners shopping center has two of its biggest big store fronts unoccupied. Even further down Jefferson, where it becomes highway 24, near the I-69 exit, you’ll find Scott’s and Kroger’s flanking both sides of the highway… You can probably find something similar in your own corner of Allen County, especially if you live on the outskirts.

People who track this kind of rampant growth — especially of the national chains — have a name for it: retail glut. It happens when city planners allow developers essentially free-reign in creating new retail centers without consideration for the impact on the local economy or a community’s quality of life. “This is a real hot-button issue and it’s becoming more so,” says Al Norman of Sprawl-Busters Consultants (sprawl-busters.com), an organization that helps local community coalitions implement campaigns against mega-stores and other undesirable large-scale development. Norman has gained a national reputation as, in the words of 60 Minutes, the “guru of the anti-Wal-Mart movement.” He’s worked with communities in 43 states and five foreign countries on what he describes as the over-saturation of retail. “Land use has been wired for developers for the past 30 years,” he says. “It’s fed by local officials who don’t know what they’re doing, developers with deep pockets, and a public that largely perceives itself as powerless.”

Doubtless, this kind of talk might come across as alarmist to many citizens of Allen County. Our own burst of retail growth and the arrival of many of the big national “box” stores is something that, for the most part, has happened in the last decade. There have been protests about development in some parts of Allen County, but by-and-large, most people perceive this growth as a good thing. The convenience of one-stop shopping is tough to argue against. Plus, many of these national chains aren’t just big, they’re huge; go into one of the giant bookstores looking for a book, and if it’s in print, there’s a good chance you’ll find it. And everybody — everybody — loves deep discounts.

Also, there seems to be something in the Fort Wayne psyche that sees the presence of many of the national chains as validation. Having a Banana Republic or a Cold Stone Creamery or a Starbucks in the area means we’ve arrived, as if by sharing something with thousands and thousands of other communities all across the country, we’ve become a real city.

Besides, isn’t this progress? Doesn’t the presence of large, national retail chains signify a healthy economy? Doesn’t having a retail center create traffic for all retailers in the area? Building these retail centers creates construction jobs, the stores themselves employ people, and there must be a real need for them, or else they wouldn’t be built. Right?

Well, not necessarily. These are myths, according to organizations that track retail over-saturation. “Cities have tended to assume that any development is good for the local economy,” says Stacy Mitchell of the Institute for Local Self-Reliance (newrules.org), an organization that works with communities around the country to develop policies to strengthen locally-owned retail and to limit chain-store sprawl. “We’re finding that these big box stores can undermine the economy in significant ways, reduce the number and quality of jobs available locally, and that they can be very expensive from a public services and tax standpoint.

Al Howard has heard all the arguments for retail development many times before, and has an answer for all of them, starting with construction jobs. “You can’t build an economy on the construction industry,” he says. “You’re going to put someone to work building that store, but that’s maybe a six-month proposition.”

What about the idea that retail centers create traffic for all retail in the area? “People used to ask me, ‘what’s wrong with that traffic? Those people are going to come by my store,’” he says. “But the theory that there would be some spin-off to local business just didn’t play out. None of the studies showed any kind of positive impact. They started to show not only the mom-and-pop stores going out of business, but the regional chain stores going under, too.”

“If you approach economic development as how do we grow locally owned small businesses, the returns to your local economy are so much greater,” adds Stacy Miller. “What we’ve found is that those locally-owned businesses return a much greater share of the dollars back to the local economy. The national chains function more as a colonizing force.”

Don’t the stores themselves create jobs? “If I came to Fort Wayne, and opened up a factory that made computer capacitors, there might be another company just like that next door, but our market is global, so I’m not gong to take jobs away from the company next door,” says Howard. “But if I open a Wal-Mart Super-Center next to your grocery store, I’m likely to put your grocery store out of business. The Wal-Mart will probably kill off as many retail jobs as it creates. One study showed, you open up a Wal-Mart Super-Center, you close two grocery stores. Is that economic development? They don’t make anything, they sell things, so you’re essentially adding another seller to the marketplace. Do you have enough consumers to meet the added supply?”

Well, we must have enough consumers to meet the added supply, or we wouldn’t keep building retail outlets, would we? Once again, not necessarily, and this is where it gets a little strange. How can one mega-mart, with its enormous stock, huge workforce, and all the costs attendant on running a large commercial property, exist right across the street from another mega-mart that delivers the same service, whether it’s groceries, electronics, books, or pets? This seems to go against the most rudimentary laws of economics and business.

In some cases, these stores are trying to feed off each other’s customers, hoping that if you can’t find the DVD player you’re looking for at Best Buy, you’ll drive a half-mile down the road to see if they have it at Circuit City. This seems normal, healthy competition (for the box stores, at least).

In other cases, however, it’s more like a zero-sum game of annihilation. “We see this particularly with the pharmacy chains,” says Stacy Mitchell. “You’ll often see two or three of these chains across the street from each other, and clearly the market can’t support it. But right now, prescription drug sales are growing, and their thinking seems to be, ‘we’re going to build as much as we possibly can everywhere, and we’re going to hope to be the last man standing on that corner.” It’s smart if you’re one of those companies, but from a community standpoint it’s a disaster. These companies are so big that they can afford to operate at a loss; the other outlets will support it. “Meanwhile, you’re an independent pharmacist who has been in business for years, who is suddenly in this competitive situation which makes no logical sense,” says Mitchell. No matter how well the business is run, or how good they are in terms of customer service or price, an independent business just doesn’t have the financial resources to fight a company that can afford to operate at a loss for years.

Finally, sometimes the basic laws of economics prevail, and after a few years one of the stores goes out of business, creating an enormous vacant storefront and what’s called a “dead mall.” “There are thousands of empty box stores nationwide,” says Mitchell. “Wal-Mart alone has almost 400 empty stores around the country. About 1/3 of all enclosed malls are in serious financial distress, and many have actually gone dark.” (Hmmm, does this sound familiar to any long-term Fort Wayne residents?). Mitchell says that some of these stores are less than 10 years old.

As you might be able to tell by some of the examples used by Howard and Mitchell, for many organizations monitoring the phenomenon, the Evil Empire of retail glut is Wal-Mart. It’s not the only mega-store you can find in practically every town across the US, of course, but many people in the field see the discount giant’s business practices as a blueprint for many of the national box store chains. “In terms of attitude, Home Depot is just Wal-Mart with a hammer,” says Howard. “All these big corporations have the same contemptuous attitude towards the community. They couldn’t care less about what their neighbors think about them, about their noise, about their pollution, they just don’t care.”

They also don’t care much about empty store fronts. Part of Wal-Mart’s strategy is over-saturation; they want to be their own competition. So, building a huge Super-Center a few miles farther out of town from an already existing site is part of the strategy. And if it’s necessary to close the original site and leave a dead mall, Wal-Mart will sometimes hold on to the lease for years to prevent a competitor coming in, even though the original site was probably build for Wal-Mart specifications anyway, and wouldn’t be much use except as another Wal-Mart.

Something similar is true for strip mall development. As one site sags after a few years, developers find it less expensive and less of a risk to simply build another retail center a little further out of town. Rather than renovating the old location, they avoid it like it’s superstitious grounds, leaving a half-empty, or fully empty, run-down lot. “A tenant wants something built to their specifications,” says David Goldberg of Smart Growth America (smartgrowthamerica.com). “So a developer can line-up a few key tenants, which lets you line up financing for development. With a renovation of an old shopping center, you have to invest in sprucing up, and you have to overcome a tag in a market place that some places are passé. They really build these things not for a terribly long life span.”

Considering that empty retail centers, dusty parking lots, and a local retail dominated by national chains hardly give the impression of a healthy, vibrant community, the question might be why city planners allow these kind of situations to happen. The answer seems to be the notion that development, any kind of development, is synonymous with progress. Cities sometimes welcome these box stores with open arms, often giving them big breaks to get in — low-cost land, free roads, water and sewer to their door.

But when you talk about restricting development in Allen County and areas similar to ours, another problem comes up: most of these new retail outlets (and housing developments, which is a whole other issue) are being built on what was formerly farmland. The agricultural industry, the small or medium-sized farm that many years ago formed a significant part of the industrial backbone of our region, is rapidly declining. It’s a trend that’s been going on for generations; children of farmers leave what was once considered a family business for more lucrative fields. With no one to pass the family business on to, farmers often sell their land to developers, sometimes for a heck of a lot of money. So, faced with an increasingly difficult-to-manage and debt-incurring business on one hand, and a comfortable retirement thanks to a possibly sizeable payoff on the other, can anyone blame the farmer for taking the latter? “Since the 90s, we’ve been converting 80, 000 – 100,000 acres of farmland to other uses,” says Joe Tutterrow of the Indiana Land Resources Council. “It’s not all going to development, but a big chunk of it is. Some communities need the development, and that’s the duality of this whole issue. We still have 14 counties in Indiana that don’t even have a plan commission, and so when somebody comes in to do this kind of shotgun development, there’s nothing to keep them from it. Many counties that do have a plan, it may be dated, or it may be that they are willing to make exceptions. Even if the plan is current and in place, it needs to be enforced.”

And what’s Allen County’s plan? Good question. Allen County’s zoning ordinance is a mostly 1960s zoning ordinance that’s been tweaked a little bit here and there. So, in other words, commercial zoning is still more or less determined by guidelines developed during a time when “one-stop-shopping” in Fort Wayne meant both dairy and meat in the same location.

Of course, worrying about box store overdevelopment and retail glut may seem alarmist or even childish. Alarmist, because the community in general doesn’t really see it as a problem yet. But think about it: how many dead, or at least half-dead, strip malls do you see in Allen County, just right down the road from the new box store outlet?

And childish, because… well, they’re not going away. Not even the more outspoken critics of box store overdevelopment think you can ban a national chain from your community, especially once it’s already there.

What communities can do is plan for it. “Eliminating sprawl is very easy to do,” says Al Norman. “Fort Wayne could do it with one sentence. All you have to have in your ordinance is: retail buildings should not exceed 60,000 square feet, which is basically well over the size of a football field. 120,000 square feet if you’re feeling generous, with no more than 60,000 per floor. I’m not saying these retailers should be driven out of business, but they should be of a size and a scale and a location that compliments the rest of the community, and doesn’t destroy community character.”

Norman says that these kinds of guidelines can level the playing field a little bit, and make local businesses more able to survive. “In the long run, all of those other merchants are needed to help keep competition going in the retail sector, because if some of these box stores are alone, you can predict that those everyday low prices aren’t going to be so low.”

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