The curse of the
Big Box
Suburbanites
like big retail stores. But what happens after they
shut down?
by
John Peters and Peter Galuszka
Click
to enlarge
Utilitarian,
but efficient, ugly yet convenient, Big Boxes have dominated
retailing in suburbs and small towns for two decades
now. They are the store model of choice for retailing
giants Wal-Mart, Kohl’s, Lowe’s, Home Depot
and others. Their needs set the agenda for urban planning
along most arterial roads in the Old Dominion from Bon
Air to Bristol. And when they go dark, they present
big problems.
In
many small towns and in some fast-growing suburbs, Big
Boxes can lie abandoned for years. They may be the victims
of poor locations for customers or the bankruptcy of
their parent firms. But in many cases, the boxes are
abandoned simply because of a peculiar competitive dynamic
unique to them. While in a business sense, the Bigger
Box is the Better Box, the community often ends up stuck
with the building that is left behind.
A
classic example is in Henry County, an economically
depressed textile and apparel region in Southside Virginia.
In the early 1990s, Lowe’s built a 69,000-square-foot
store in the southern portion of the county. Shortly
thereafter, Wal-Mart opened up a store in Martinsville,
then the county seat. By 1994 Wal-Mart was ready to
go bigger. It abandoned its first site and moved scarcely
a mile away to a 200,000-square-foot superstore. Not
to be undone, Lowe’s abandoned its store for an
115,000-square-foot store, right behind the new Wal-Mart.
The
new Wall-Mart and Lowe’s have done well, so much
so that the entrance to the complex where the two are
built is now the busiest intersection in the county.
The old Wal-Mart site, one of four anchor stores to
a new indoor shopping mall, was eventually filled, but
the original Lowe’s building still sits shuttered.
The
Henry County example underscores the dynamics of what
drives the chains to go into ever-larger buildings.
When the Big Box wave began in the 1970s, most stores
were between 50,000 and 70,000 square feet. The standard
Lowe’s store, for instance, was about 70,000 square
feet, says Frank Galleher, a senior associate at Sigma
National in Richmond who is trying to lease a former
Frank’s Nursery and Crafts store in Chesterfield
County. Then Home Depot, a major Lowe’s competitor,
began building stores nearly double in size, along with
even larger parking lots. Lowe’s was forced to
match them. Then Wal-Mart started trumping everyone,
putting in 200,000-square-foot monsters.
The
worst impacts of this trend are in smaller towns where
the smaller markets can’t keep up, leaving numerous
empty boxes. “You remember Hills and Rose’s
(stores)?” says Galleher. “Wal-Mart pretty
much killed them off. In small towns, it’s tough
to lease those spaces. It is really hard to keep up
with the Kohl’s and Wal-Mart’s.” What’s
more, the departure of a Big Box from a small retail
area hurts the smaller stores nearby who count on the
customer traffic the big stores provide.
Another
example of this bigger-is-better competition can be
found in the Roanoke area. Lowe’s is building its
second giant store in Roanoke County while Wal-Mart
is building a superstore, just a few miles from a Wal-Mart
store that will close once the superstore opens. In
this particular case Roanoke County officials aren’t
too concerned — the Wal-Mart that will close is
actually across the line in Roanoke city. Nevertheless,
county officials empathize with their counterparts in
the city. “They (big boxes) are hard to fill,”
says Janet Scheid, the county’s chief planner.
“Because they are so large, they are hard to sell.
There aren’t many stores that can go into those.”
Boxes
go blank in fast-growing areas, too. Consider Frank’s
Nursery and Craft in western Chesterfield County. With
considerable fanfare, Frank’s opened a Big Box
near the edge of Richmond’s suburban sprawl along
busy U.S. 360 in April 2001. The location seemed a sure-fire
hit for the Michigan-based chain since it is fast becoming
a tangle of strip malls targeting the extra 100,000
people expected to locate in Chesterfield over the next
20 years.
Only
10 months after it opened its doors, however, Frank’s
went dark and remains empty today. Even though earth-movers
continue to roar along nearby scraping up the red clay
for even more stores, this particular Frank’s fell
victim to its mother company’s bankruptcy. Financially
stressed Frank’s was shuttering 93 of its 263 other
outlets. It needed more Richmond area stores to meet
high local advertising and training costs, but couldn’t
expand. “We just couldn’t absorb all the costs
in one store,” says Michael McBride, a Frank’s
lawyer, so it shut down its Chesterfield outlet.
From
a strictly business point of view, however, Big Boxes
are usually cash cows, which is why there are so many
of them. City and county planner departments, including
many in the Old Dominion, tend to accept them because
shoppers prefer their convenience. “In the suburbs,
Big Boxes are a fact of life and people have voted with
their wallets,” says Tom Jacobson, planning director
for Chesterfield County. Jay M. Weinberg, a real estate
lawyer with Hirschler Fleischer in Richmond insists
that Big Boxes actually create fewer traffic problems
than several smaller shops that total the same square
footage. Weinberg ought to know. He gained national
fame two years ago when the Public Broadcasting System
aired a documentary about the struggle of the residents
of Ashland, a quaint college town, who fought a proposed
Wal-Mart. Representing the retailer, Weinberg won the
day by negotiating a scaled-down project.
Not
only are Big Boxes problematic at the outset, they are
even more so when they go dark. While relatively few
actually fail, reviving the stores is difficult. If
the box is truly large, it might be impossible.
Some experts question why many Big Boxes are allowed
in the first place. One critic is Ed Risse, principal
of the consulting firm of Synergy Planning, Inc., in
Warrenton. He says that while many boxes go out of business
because their owners made poor siting choices, a lot
of the responsibility lies with government and the public
at large. Says Risse; “Almost no municipalities
have created a long-term plan to identify what the community
needs. When this (big box) cycles out, they should be
thinking what is the best thing that should go there
rather than just the next bad use.” However, a
dire need for tax money often drives planning commissions.
“The leasing owner often says, ‘I can get
you this chain store if you change my zoning.’”
Yet
how much government should be allowed to control free
enterprise is very much at issue as well. Big Boxes
go straight to this point. If they are successful financially
and consumers want them, why shouldn’t they be
allowed? “Some citizens here have philosophical
issues,” says Chesterfield County’s Jacobson.
“Do you want government to have such a big influence
on your economy? (But) government isn’t talented
enough to learn how to say no to retail development.”
Attorney Weinberg has an even blunter view: “Very
simply, Wal-Mart is the largest retail corporation in
the world. What are we going to do? Substitute a planner’s
judgment that the largest corporate governance in retailing
doesn’t know what they are doing? I have found
very few (planners) with a sophisticated, intricate
view of corporate planning.”
Officials
in smaller communities, smaller ones with anemic economies,
see the Big Boxes as big pluses. For example, Lee Clark,
acting director of planning and zoning administrator
in Henry County, sees few problems with the new Wal-Mart
and Lowe’s development near Martinsville, even
though that meant at least one Big Box was left vacant
in another part of the county. The two newer Big Boxes
are the best uses for the land, he maintains. “What
it’s probably done, more than anything, is open
up a potential area for development: they’ve taken
a brown field, an old industrial site, and turned it
into a viable retail development.” And, he adds,
developer-financed improvements to the intersection
at the entrance has made traffic flow more smoothly
even with more cars. One reason for his views could
be that Martinsville’s mainstay apparel and textile
industries have been hammered by global trade and the
area has an unemployment rate of nearly 12 percent.
You
get an opposite view in Rockville, Md., an affluent
suburb of Washington, D.C. There, stores larger than
65,000 square feet aren’t allowed. That ban was
put in place in 2000 after a local developer tried to
demolish an old strip mall and replace it with a Costco
that would cover more than 100,000 square feet. “As
that was coming forward, the city had concerns of traffic
and other impacts, as well as what happens on the building
site if Costco moves out,” said Art Chambers, director
of community planning and development services. “We
put a moratorium on building for six months while the
staff researched the issue, and ultimately we adopted
the current zoning law.”
Not
only does Rockville’s zoning regulation prohibit
the larger mega-buildings, it puts fairly stringent
design requirements on any building larger than 25,000
square feet. Those guidelines, Chambers says, address
the construction of sidewalks, the design of storefronts,
even landscaping issues. “The new development we’re
trying to encourage is much more human-related than
acres of asphalt out in front of a big building.”
And
what happens to the space left in that vacant strip
mall? Chambers said that developer has worked with other
developers to replace the mall with a mixed-use development,
including a 400-unit apartment complex and several retail
outlets. “What we’re going to get is more
of a walkable community,” says Chambers. “From
a design standpoint and a community standpoint, I think
it’s going to be a lot better than having a single
120,000-square-foot tenant.”
Indeed,
transforming empty Big Boxes and strip malls into mixed-use
projects has become highly popular in planning circles,
especially among those subscribing to the “New
Urbanist” style of planning. The style promotes
retail, office and residential use with pedestrian-friendly
transportation flows and buildings that are human in
scale. One such project reflecting the “New Urbanist”
style is Port Warwick in Newport News. It includes 150
acres of mixed-use development and “not a Big Box
in sight,” says Bobby Freeman, president of Tower
Park Corporation, the developer. In Chesterfield County,
Jacobson says his planning department is trying to encourage
new projects that “shape” Big Boxes into mixed-use
centers. One such project is near U.S. 360 that would
have a mixed-use development anchored by Big Boxes at
either end. To enhance its looks, the boxes would have
their loading docks in the center of the structures,
and the surrounding streets would be landscaped and
roads built to resemble smaller downtown-type streets.
Some
contend that the “New Urbanist” approach to
preventing or replacing boxes has definite limits. Risse
says that too many times “New Urbanist” solutions
do little more than add inconsequential “gingerbread”
to projects without addressing many of the problems
of boxes. They tend to chop up larger structures into
boutiques, restaurants and microbreweries. While not
opposed to this idea, Risse says it’s not the end-all
answer. “They can be good, but you might not need
another high-end microbrewery,” he says.
Indeed,
fancy restaurants and expensive townhouses may not fly
in hard-pressed parts of Virginia, such as Southside
and the Southwest. In Henry County, for example, where
a 69,000-square-foot Lowe’s building is still vacant
after three years, chances of landing such a mixed-use
development are low.
Still,
there are steps that can be taken to prevent boxes from
sitting vacant year after year. Charlotte, N.C., for
example, considered rules this summer that would have
required developers to dispose of the box should it
go dark, but the idea was stymied. Kent Main, planning
coordinator for economic development for the city’s
planning commission, says the idea ran into trouble
when issues came up such as how to handle boxes that
were jointly owned.
As
for the Frank’s site in Chesterfield County, leasing
agent Galleher hopes to have the property leased in
the spring. It may have to be chopped up into several
parcels, however. Frank’s attorney McBride, says
Frank’s, which has since emerged from bankruptcy
this year, would like to venture into Virginia again.
Most likely it will be into another Big Box.
