Urban development: mixed use, mixed results?

MinnPost photo by Marlys Harris
When I drive around town, I see a whole lot of mixed-use buildings with unused retail space.

Ever since Jane Jacobs celebrated diverse, high-density neighborhoods in her 1961 classic “The Death and Life of Great American Cities,” city planners, politicians, academics and even some developers have been jonesing to recreate New York’s homey West Village where she lived back then.

Of course, to adopt Jacobs’ prescriptions for the perfect city — short, walkable blocks, high-density living and maintenance of old, sometimes out-of-date and impossible-to-upgrade buildings — would have required a monumental upheaval in most of the nation’s sprawling, car-centric metropolises. However, her call for mixed-use development — commercial and housing jumbled together to produce a lively street — was one goal that most cities could implement without bulldozing themselves and starting from scratch.

Thus was born the notion of the mixed-use development. Put a condo or apartment building on top, a Starbuck’s, a yoga studio and a flower shop beneath, and bippety-boppety-boo, you’ve got yourself — you hope —  an interesting, walkable street. Clump a bunch of these things together and maybe you’ll witness the birth of a charming urban neighborhood, the likes of which you’d find in Copenhagen, London or Buenos Aires.

In the past two decades or so, the mixed-use development has become an ideal that city planning departments try to encourage. Minneapolis, for example, grants a 20 percent density bonus in commercial districts to buildings that devote at least 50 percent of their ground-floor space to commercial use. St. Paul does not provide any such incentive, but Mayor Chris Coleman has waxed enthusiastic about the Penfield and the Winnepeg, two new apartment buildings with ground-floor retail; only last Friday he pitched a residential-retail-movie-theater complex on Wabasha Street to replace the abandoned Macy’s. Even the suburbs have jumped in. There’s Excelsior on Grand in St. Louis Park, and Hopkins has seen the development of Marketplace & Main and has under consideration Fifth Avenue Flats, both combining apartments and retail space.

All of this is well and good. For sure, streets with storefronts are more fun to walk down than those with surface parking lots — and they very definitely produce more commerce, spending, jobs and tax revenues. But when I drive around town, I see a whole lot of mixed-use buildings with unused retail space. So I wonder: Have we gone overboard with this dogma?

‘It went in locations that couldn’t support it’

Mary Bujold, president of Maxfield Research, a real-estate consulting firm, believes that the mixed-use development may actually be a bit ahead of its time. Back in the ’90s, she says, “when we started requesting that people do mixed use, it went in locations that couldn’t support it.” At that point, the trickle of population back to the city had just begun, and there wasn’t enough population to provide the business stores needed to stay afloat.

That trickle back to the city has turned into a small but steady flow. Still, people won’t necessarily walk to stores on the street, even when they live in the same building. I had to engage in major browbeating and fishwife-style nagging to get my husband to buy a half-gallon of milk or a jar of olives at the small grocery on the ground floor of our building rather than driving to Rainbow.

If the store had been in a building five blocks away, I wouldn’t have stood a chance. And our climate doesn’t help. If the store had been five blocks away and we’d been in the throes of the Polar Vortex, I would have driven to Rainbow myself rather than step out into the elements.

“It’s very difficult to break the car habit,” says Bujold. “Here in the Midwest we don’t have a history of being pedestrians.” (Not for the last century anyway.) Apparently, a lot of other people in our neighborhood suffer a similar addiction to the car, because the grocery closed its doors last fall, leaving an empty storefront.

Requires design and architectural finesse

To make a mixed-use building successful takes design and architectural finesse, which not every architect and developer have, says Sam Newburg, a real-estate analyst who blogs as Joe Urban. There has to be clear signage, windows big enough to attract people from the sidewalk, obvious paths into the store from the street and from any parking area. He points to West River Commons on East Lake Street as an ideal. Developed by Michael Lander, it has only 8,000 square feet of retail — a restaurant, coffee shop, gift shop and take-and-bake pizza, all of which is located on the busiest side of the building. And, a small plaza offers outdoor seating for the coffee shop.

Newberg adds that the empty retail space I’m seeing is in the newest buildings. “It’s much easier to lease up the apartments than the retail space,” he says. The developer usually receives enough income from the residential units to cover his  costs and can wait until he finds the right retail to go in the building.

Maybe Newberg is right. When I drove back to some of the empty storefronts I’d seen on Lyndale, I found some of the retail filled in — a gift shop, an art gallery and something called a “pharmacie” in one building and a chiropractor, hair-removal place and soon-to-arrive sushi restaurant in another.

Still, whether those businesses will survive is an open question. With the exception of a pizzeria, the stores in my own building seem often to be echoingly empty. And I have to wonder whether planners have been ordering up too much retail altogether. After all, we’re living in an age when big box stores are closing, malls and downtowns alike are struggling, and most of us have become accustomed to buying at least some of our stuff online. If all the ground floor retail that planners and politicians are encouraging has no staying power and developments wind up with revolving-door tenants and boarded-up storefronts, well, we would not have created vibrant mixed-use streets. Just the opposite.

‘Location, location, location’

“There will always be a need for retail,” says Stuart Ackerberg, an Uptown property owner and developer of the Rainbow Building and Shops, the Lyn-Lake Building and the Mozaic condo, among others. “People are social beings, and they want to go out, be with other people, touch things, feel things.”

But, in retail as in all real estate, he adds, the rule is always “location, location, location. Those mixed-use buildings are not empty in Uptown, not at 50th and France or at 50th and Xerxes,” he says. Certain areas don’t have enough population, the right demographics and people with enough disposable income to make those neighborhood businesses viable. “We want to do mixed-use everywhere, but it isn’t always prudent,” he says.

What to do with the storefronts that go empty? I regularly drive by the Minneapolis Grand on Chicago Avenue. Its ground floor has been available for lease for months, but nary a store or doctor’s office, not even a coffee shop, has appeared. Yesterday, however, workmen were busy in one of the units. “What’s going on?” I asked one.

“We’re converting it into apartments,” he said.

 Single use, anyone?

Comments (13)

  1. Submitted by Bjorn Awel on 04/02/2014 - 08:58 am.

    Interesting how several of the observations in the article are based on driving by places. Maybe people in the cities just need better mass transit so they are not driving everywhere, or better bicycling conditions on key retail corridors, and lastly, how about improving pedestrian conditions and calming traffic. I also think this piece is slightly without fact – there is a lot of anecdote here. If the retail doesn’t come, the place can also be used for small offices or other uses other than residential.

    I’m not sure where the author lives but I would guess it is uptown given the mention of Rainbow — in that case I would say that is a case in point of a need for more mixed use development right on that site. You can also look just down the street to Nicollet and Lake for another prime spot, and then to the Lake Street station area.

  2. Submitted by Paul Udstrand on 04/02/2014 - 09:05 am.

    The other thing… look at the stores.

    Frequently the businesses that rent the space have little appeal and don’t address the needs of local residents. It’s a swing and a miss most of the time.

  3. Submitted by Theo Kozel on 04/02/2014 - 09:36 am.

    How about some empirical evidence?

    “But when I drive around town, I see a whole lot of mixed-use buildings with unused retail space.” As an assessment of the success or failure of an approach to urban development, anecdotes are meaningless. Perhaps the writer’s questions would be better answered through some basic research- for example, comparing the success rates of mixed developments against similar businesses not in mixed developments. Sorry, even as a devil’s advocate type article, this is just plain lazy and poorly argued.

  4. Submitted by jody rooney on 04/02/2014 - 09:44 am.

    Most of the mixed retail is now starting to have the aesthetic appeal of the suburbs and big box retail which, in my opinion, takes away the charm of the neighborhood.

    Are they overbuilt? Not in the long run. But they might be the pale teal and pink of the future.

  5. Submitted by Neal Rovick on 04/02/2014 - 10:00 am.

    The main issues are:

    -face-to-face retail is in decline

    -single store operations are at a pricing disadvantage to larger retailers (internet or face-to-face)

    -there are far fewer small practice operations for doctors and other professionals

    -fewer items are repaired, more are replaced, so few repair shops

    -small stores featuring one-of-a-kind items that cost more, with higher levels of service, naturally collect in destination areas

    -the goals of one kind of small retail– unique items versus enough customers–are naturally in opposition and limit the number of successful retail operations of that nature

    –the goals of the other kind of small retail–non-unique items conveniently located walk a very tight pricing line

    –and, probably key–leasing rates and restrictions, especially with tenants above, make many new sites unavailable for individual small operations–especially start-ups.

    Retail development is more organic than an empty vanilla space under 4 or five stories of apartments.

  6. Submitted by Max Hammer on 04/02/2014 - 11:24 am.

    What?

    How does driving to Rainbow, thus requiring you to walk outside from your car to the store, make more sense than going to the store in your building? That’s about the point I stopped reading.

    • Submitted by Neal Rovick on 04/02/2014 - 01:05 pm.

      It only works if the store has what the customer wants, at the price they want to pay, at the freshness level desired.

      If it’s in your building and you subsist on what is available from the average Super America, it would probably work out just fine.

  7. Submitted by Connie Sullivan on 04/02/2014 - 12:09 pm.

    Many of our recent mixed-use developments take full advantage of the city’s density-related incentives, which increase their profit. But to judge simply from those developments on the East Side of Minneapolis, the developers tend not to extend those incentives to businesses that might want to rent space on the ground floors. In fact, most of the businesses that would like to stay (I’m talking Dinkytown area displaced businesses, for example) cannot afford the new rents and are forced to locate elsewhere or simply throw in the towel.

    Perhaps Minneapolis can devise some incentives that would encourage developers to actively seek retail for their mixed-use projects.

  8. Submitted by Steve Sande on 04/02/2014 - 12:54 pm.

    Erosion of the middle class

    Many of these spaces are rented by stores selling items that are discretionary purchases, not necessities. Most neighborhood hardware stores and mid-sized groceries are long gone, as mega-retailers have captured the market for daily staples.

    Does our current economy leave consumers with enough discretionary income to support a bunch of shops selling candles and ice cream cones?

    Housing costs have been rising faster than incomes, and gasoline costs take a much bigger chunk of household budgets than in the past (even in walkable neighborhoods, most Twin Citians are unwilling — or unable — to give up their cars at this point). Household dollars already committed to paying high rents, mortgages or driving costs are dollars that cannot be spent in local shops. Unless we can enact policies that support the existence of a thriving middle class, I predict we will see more empty storefronts in the years to come.

  9. Submitted by Ray Schoch on 04/02/2014 - 07:16 pm.

    My mantra

    …as a planning commissioner was “mixed use, mixed income.” I still think it’s a very good idea, but it assumes several things that may not be part of the real-world equation. Many of the commentators seem on target to me. That is, successful mixed-use areas almost surely will need better public transit than is now provided; the building’s population or the neighborhood’s population may need more income to take advantage of retail; perhaps the city needs to devise incentives to encourage or promote small-scale retail; maybe what’s being offered for sale boils down to stuff that people might sometimes want, but don’t need; maybe the stores themselves are poorly designed; maybe the businesses in those locations aren’t well-enough capitalized to do effective local advertising to generate start-up business.

    And so on.

    I do agree that the piece would have more impact if there were some numbers from a reliable source to support some of the allegations or suggestions, but since I didn’t read in the piece any strong policy suggestions for making mixed use development work better in the Twin Cities, or in a specific neighborhood, the lack of specifics and/or the reliance on anecdotal evidence doesn’t bother me particularly. Humans aren’t especially rational creatures, so if the initial, non-scientific impression of a given streetscape or storefront somehow appeals to people – or doesn’t appeal to people – it could easily make or break a startup business.

  10. Submitted by Paul Udstrand on 04/03/2014 - 08:37 am.

    And let’s not appeal to consumerism every chance we get

    Another problem with “mixed” use is that it assumes everyone’s primary function in life is to “shop”. Why must we have “shops” on every inch of sidewalk in any given urban area? Look, you go London and you’ll find mile after mile of Georgian housing and Mews with no retail. New York has mile after mile of brownstones. There’s something to be said for just building place where people can live. I Think Marlys might be onto something here. There’s no reason to assume that you can drop a mixed use building into any given neighborhood and expect the retail component to succeed. Yet that seems to have been the assumption.

    • Submitted by Adam Miller on 04/03/2014 - 11:19 am.

      Hmm

      Not sure about your New York assertions. Those blocks of brownstones tend to be capped by blocks of bodegas and coffee shops and restaurants. They may not be mixed use on every block, but the neighborhood definitely contains mixed uses.

      London too, for that matter. At least in the bits of central London I’ve visited and, briefly, lived in, I don’t think there is anywhere you could live that wasn’t at minimum an easy walk from a pub.

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