Re-Vitalization of the Commercial Strip
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Changes in retailing present changes to property-tax dependent communities.Within twenty years the commercial strip will cease to exist as a distinct landscape type in New England. Remnants may persist, isolated plazas or "period" buildings - but the overall character of the strip will change dramatically. How can this change, present opportunities for your community?
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Re-Vitalization of the Commercial Strip
- 1. Re-vitalizing the Commercial Strip Past, Present and Future(?) Arnett Development Group 7 South State Street Concord, New Hampshire 03301
- 2. A Proposition The “strip”, as we know it, will cease to exist as a distinct and identifiable landscape type within twenty-years.
- 3. • A Cursory Review of the Strip’s Evolution • A Current Assessment of the Strip • Future Trends Affecting the Dissolution of the Strip • Re-vitalizing the Strip Re-vitalizing the “Strip”
- 4. Evolution of the Strip 1890 - 2015
- 5. Catalysts for Change • Demographics • Where we choose to live & work • Technology • Technical advances that profoundly affect social behavior • Transportation • How we choose to get from point A to point B • Commerce • Where and how we chose to shop • Government • Incentives and laws that guide or stimulate development
- 6. 1890 • Demographics • Predominantly Rural • Technology • The Combustion Engine • Urban Electrification • Transportation • Railways connect the country • Commerce • Mail Order Catalog Sales (Montgomery Ward 1872) (Hammacher Schlemmer 1881) (Sears & Roebuck 1888) • Government • Pacific Railway Act of 1862
- 7. 1890 • Demographics • Predominantly Rural • Technology • The Combustion Engine • Urban Electrification • Transportation • Railways connect the country • Commerce • Mail Order Catalog Sales (Montgomery Ward 1872) (Hammacher Schlemmer 1881) (Sears & Roebuck 1888) • Government • Pacific Railway Act of 1862
- 8. 1900-1925 • Settlement Patterns • Urban, Dirty, Congested • Land Speculation • Technology • Telephone • Transportation • Electric streetcar • The Model T • Commerce • Urban Department Stores (Henry Gordon Selfridge ) • Chain Stores Emerge (A&P) • Door-to-door sales (Fuller Brush) • Government • Zoning (NYC 1916) • Federal Road Acts 1916 & 1921
- 9. 1900-1925 • Settlement Patterns • Urban, Dirty, Congested • Land Speculation (“tax payers”) • Technology • Telephone • Transportation • Electric streetcar • The Model T • Commerce • Urban Department Stores (Henry Gordon Selfridge ) • Chain Stores Emerge (A&P) • Door-to-door sales (Fuller Brush) • Government • Zoning (NYC 1916) • Federal Road Acts 1916 & 1921
- 10. 1925-1940 • Demographics • Urban working class population increases • Middle class begins streaming to suburbs • Technology • Radio promotes advertising (birth of the “brand”) • Rural electrification • Transportation • Automobile is common mode • Decline of the trolley • Commerce • Chain Stores (A&P, 13,961 in 1925) • Convenience Stores (Tote’m 1928) • Government • New Deal
- 11. 1925-1940 • Demographics • Urban working class population increases • Middle class begins streaming to suburbs • Technology • Radio promotes advertising (birth of the “brand”) • Rural electrification • Transportation • Automobile is common mode • Decline of the trolley • Commerce • Chain Stores (A&P, 13,961 in 1925) • Convenience Stores (Tote’m 1928) • Government • New Deal
- 12. 1945-1965 • Demographics • Dawn of Suburbia • Technology • Television (advertising) • Transportation • Automobile Commerce • Emergence of the strip (McDonalds 1953) • Big Box stores(Wal-Mart 1962) • Customer to Consumer • Government • Housing Act of 1949 &1954 • 1954 Adjustment to Tax Code • The Federal-Aid Highway Act of 1956 • Real Estate Investment Trust Act of 1960
- 13. 1945-1965 • Demographics • Dawn of Suburbia • Technology • Television (advertising) • Transportation • Automobile continues to provide cost efficient transportation • Commerce • Emergence of the strip (McDonalds 1953) • Big Box stores(Wal-Mart 1962) • Customer to Consumer • Government • Housing Act 1949 &1954 • 1954 Adjustment to Tax Code • The Federal-Aid Highway Act of 1956 • Real Estate Investment Trust Act of 1960
- 14. 1965-2000 • Demographics • Suburban sprawl • New Urbanism • Technology • Internet • Transportation • Automobile (energy crisis) • Commerce • Shopping Networks (QVC 1986) • Online shopping (Amazon 1994) • Government • Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
- 15. 1965-2000 • Demographics • Suburban sprawl • New Urbanism • Technology • Internet • Transportation • Automobile (energy crisis) • Commerce • Shopping Networks (QVC 1986) • Online shopping (Amazon 1994) • Government • Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
- 16. 2000 -2015 • Demographics • Suburban & Rural migration • Technology • Wireless Technology • Transportation • Electric Cars • Light Rail • Multi-Modal • Commerce • Online Shopping (79%) • Big Box Closures • Government • American Recovery & Reinvestment Act 2009 • Prime Interest Rate Reduction
- 17. 2000 -2015 • Demographics • Suburban & Rural migration • Technology • Wireless Technology • Transportation • Electric Cars • Light Rail • Multi-Modal • Commerce • Online Shopping (79%) • Big Box Closures • Government • American Recovery & Reinvestment Act 2009 • Prime Interest Rate Reduction
- 18. Current Assessment of the Strip 2017
- 19. Common Characteristics • > 70% Retail Oriented • Corporate/Absentee Ownership • Big Box stores are Primary Anchors and People Generators • Vehicular Orientated; Poor pedestrian circulation • Poorly integrated with the rest of the community • Undistinguished Architecture; No sense of place
- 20. Common Characteristics • > 70% Retail Oriented • Corporate/Absentee Ownership • Big Box stores are Primary Anchors and People Generators • Vehicular Orientated; Poor pedestrian circulation • Poorly integrated with the rest of the community • Undistinguished Architecture; No sense of Place
- 21. Future Trends Affecting the Strip 2017 Trend in Consumer Online Shopping • 1994 First Internet Sale* • 2007 Internet Sales Exceeded Store sales for 1st time • 2015 Internet Sales Surpass $300 Billion • 2016 Pew Research reports 79% of Americans now shop online
- 22. Future Trends Affecting the Strip 2017 Big Box Retail Store Closings* Lack of Competitive Pricing Uninformed Sales Associates Poor e-Commerce Performance (email, digital marketing etc.) Low Profile on Social Media (poor consumer reviews regarding shopping experience) Failure to see consumer as customer; poor in-store experience Inertia** This list alone represents 3,231 closings
- 23. Future Trends Affecting the Strip 2017 Mall Vacancy Rates • Recession Sensitive – Peak Vacancy Rates In Late 80s & Early 90s • Vacancy Rate Declined & Held Steady Up To The Great Recession Of 2008, Peaked Again 2010-11 • 2013 & 2014 Showed Some Recovery But Has Been Flat Last 18 Months • This Chart Does Not Reflect Projected Closing Of 3,231 Stores On Previous Chart Blue Line Represents Strip Malls Red Line Represents Regional Malls
- 24. Future Trends Influencing The Strip 21st Century Catalysts
- 25. 2017-2030 CATALYSTS FOR CHANGE • Demographics • “Smart” Connectivity (“Smart Cities”) • Health, Wellness & Well-Being • Global Marketing & Sales • Universal Mobility
- 26. During the thirty year period between 1940 and 1970 the United States grew approximately 55%. Between 1985 and 2000 growth had slowed to 35%. Between 2010 and 2030 it is projected to grow at 12%. 1
- 27. • Between 2015 and 2030 New Hampshire's population is projected grow approximately 3-5%. • Though the New England area continues to grow, it’s percentage of the national population is diminishing. • By 2030 New England will constitute less than 5% of the country’s population. 1
- 28. An Aging Population New England’s overall population growth is lagging significantly behind the rest of the country, but it’s 65 and older population is growing significantly faster. By 2030 it is projected that around 20% of the country will be 65 or older. Five out of the six New England states will exceed the national average. Maine(26.5%) population will trail only Florida’s (27.1%) population 65 or older. New Hampshire’s 65 or older population will approach 21.4% while Vermont will be nearer to 24.4% 1
- 29. 2 CONNECTIVITY AND CONVERGENCE: • By 2020, there will be over 5 billion internet users. Over half of them will access the internet over handheld tablet devices; 80 billion devices will be connected worldwide. • Connectivity will integrate work, home and our surrounding environment into one seamless experience, referred to as “connected living.” The “smart city” market expected to be worth $1.5 trillion by 2020. • This connectivity will push other sub trends, like “big data” to create market opportunities for new “smart” products and services which will have the ability to sense, process, report, and take corrective action. • Smart (connected) products will be everywhere around us from smart clothing, watches, phones, to smart buildings and smart cities.
- 30. 3 HEALTH, WELLNESS AND WELL-BEING: • The Logic Of Kondratieff Economic Cycles Suggest That Health Care Will Be The Next Economic Mega Cycle • Healthcare Will Account For 20 Percent Of A Nation’s GDP In A Developed World. • Focus Will Shift To Mass Prevention And Diagnoses And To Wellness Aspects Of The Mind, Body And Soul. • In 2015 13% Of Population Is Over 65; By 2030 That Number Will Be 19% • Life Expectancy Is Increasing And Is Expected To Accelerate In The Coming Decades Due To Medical Advancements. Maintaining An Independent, High Quality Of Life Is Important To Baby Boomers; Generation X Is Becoming Aware Of This As Well.
- 31. 4 A GLOBAL MARKET • By 2030, 85% Of Humankind Will Be Living In Emerging Markets (Asia/Africa) • In 2016 The Combined Revenue Of Apple, Amazon, Google & Facebook Exceeded The GDP Of 88% Of Countries Worldwide. • By 2030 Less Than 10 Companies May Account For 70% Of Retail Sales. • A Connected Community Of 5 Billion Internet Users Will Allow Entrepreneurs And Businesses To “Make One, Sell Many,” Resulting In A New Business Model Of “Value For Many” (Angry Birds) • 34% Of The US Workforce Is Currently Freelancing, Transacting $715 Billion In GMV, (Gross Merchandise Value). Freelancing Is Projected To Grow To 40% By 2020
- 32. 5 THE AGE OF ACCESSIBLE MOBILITY • In The Future, The Emphasis Will Be On Comprehensive Multi-modal Systems Rather Than Individual/Personal Vehicles. • By 2020 Car Sharing Services (Zip Car, Reachnow, Enjoy,) Will Grow To Be A $6.2 Billion Industry, With Over 12 Million Members Worldwide. • Related Industries Such As Car Leasing Firms (Hertz On Demand, Avis On Location) And Motorist Clubs Such as AAA (Gig) Are Already Diversifying Into Car Sharing Services. • By 2030 It Is Projected That One In Four (25%) Cars On The Road Will Be Self-driving. Autonomous Vehicles Will Dominate The Freight & Delivery Transportation Industries. • “Smart” And Fully “Connected” Mobility Systems Will Solve The “First And Last Mile” Commuter And Delivery Problems.
- 33. TREND TAKE AWAY: • Rapid Growth In The South And West Will Attract The Majority Of Investment and Development Dollars, Including Allocation of Federal Assistance. • A Large Aging Population (20% plus), Especially In The Northeast Will Fuel The Development Of The Heath, Wellness And Well-Being Industry. • The Development of the “Internet of Things” Will Spur the Development of Smart Cities, Impacting Infrastructure In Particular. • Connected Community Of 5 Billion Individuals Will result In New Opportunities For Entrepreneurs And Businesses To Prosper based on the “Value For Many” Principle. • A “Smart Traffic Grid” and the Rise of the Autonomous Automobile Will result in a More Fluid Community. Multi-Modal Transportation Systems Drive (no pun intended) Public Spending. TAKE AWAY
- 34. The Future of the Strip 2020 - 2040
- 35. AS PLANNERS & DESIGNERS IT IS OUR ROLE TO STRUCTURE THE LEGAL FRAMEWORK AND INFORM THE SPATIAL ORGANIZATION WITHIN WHICH THE STRIP WILL CONTINUE TO EVOLVE.
- 36. 5 SALIENT POINTS TO PONDER 1. How Will Transformation of Retail In the 21st Century Impact My Community? • How Much Retail Space Is At “High Risk” In My Community? (Big Box Retail & National Franchise Stores in particular) • How Will A Decline In Retail Space Impact My Community’s Grand List & Tax Base? • How Will The Loss Of Retail Jobs Affect Employment In My Community? 2. Will We Need To Amend Our Zoning Ordinance To Attract 21st Century Development? • Will We Need To Delineate New Types Of Districts Or Zoning Overlays? (Urban Agriculture) • Will We Need To Accommodate New Uses Emerging In The 21st Century? (3D Printing)
- 37. 5 SALIENT POINTS TO PONDER (cont.) 3. Will We Need To Amend Our Municipal Ordinances, I.E. Subdivision Ordinance, Site Plan Review, And Local Building Codes To Restructure The 21st Century Strip? • How Will We Encourage Pedestrian Connections Within The Restructured Strip? • How Will We Encourage The Integration Of Social And Cultural Amenities Within The 21st Century Strip To Enhance Quality Of Life Within The Strip? 4. What Will We Need To Do To Better Integrate The Strip With The Rest Of The Community? • What Opportunities Exist To Create A Network Of Multi-modal Trails Between The Strip, The Downtown And The Residential Areas Of The Community? • How Do We Encourage Restructuring The Strip While Revitalizing Our Downtowns And Village Centers?
- 38. 5 SALIENT POINTS TO PONDER (cont.) 5. What Will Be The Infrastructure Demands Of The 21st Century? • How Will We Finance New Infrastructure i.e. “Smart Roads” And Improved Wireless Communications While Maintaining Our Current Systems? • How Much Support From The State And Federal Government Will We Be Able To Expect? • Will We Need To Consider Public Private Partnerships (3Ps) For Major Capital Improvements And Crowdfunding For Minor Enhancements?
- 40. THANK YOU Arnett Development Group 7 South State Street Concord, New Hampshire 03301
Editor's Notes
- Now that, even for me, is a rather bold statement considering that the strip has been in the process of evolving for well over 100 years. Vestiges and remnants of the strip structure of the strip will erode and over time be absorbed into the overall fabric of the community.
- To support that proposition I will briefly review the evolution of the strip; Assess the current condition of the strip And lastly, examine five trends that will have a profound influence on the structural character of the contemporary strip.
- A built environment, is a complex entity whose organization, form and structure is influenced by countless social, cultural, economic and physical factors. I would like to isolate just five of those factors and examine how they help to influence the development of the contemporary strip.
- For the sake of time I would like to highlight the one or two that I think had the most influence of the strips’ evolution in any given period. Commerce – mail order catalogs set the precedent of for prioritizing the convenience of the shopping experience. Customers ordered from the comfort of their home and goods were dispatched, from a central facility, across hundreds of miles via a complex transportation network and ultimately arriving at local train depot or general store and in some cases right to the customer’s front door.
- The development of the electric trolley and to a lessor extent the early automobile enable rapid expansion of the suburbs, especially on the fringes of a city. Quite often the trolleys systems operated at a loss but made their owners millions in land speculation It should be noted that the first zoning laws were put into effect in NYC in 1916 and by the mid twenties zoning have been adopted in hundreds of cities and became the model for shaping urban growth for the remainder of the 20th century and continues as standard practice today.
- It was during this period that the radio became readily available and a new era in marketing and advertising was born. The customer no longer bought what they needed but what they “told” they needed. It was also during this period that chain stores picked up momentum and in turn “nationalized” retail development. Many consider this period the birth of the brand.
- Following WWII the United States entered into a period of unprecedented prosperity and a generation that had endured two world wars and the Great Depression gave rise to new and distinctly “American landscape”, suburbia. And it was the United States Government that served as the catalyst for this explosion of growth. Cite laws and their impact
- The introduction of the internet, the demise of the mail order catalog the rise of the regional mall, emergence of the shopping network and the birth of online shopping marked a significant moment in the history of the strip and some will argue that it was during this period that the strip “jumped the shark” and began its decline.
- The rapid acceptance of the home computer & the development of the WWW, along with the emergence of wireless technology, significantly diminished the value of the strip as a retail stronghold. And much like the way developments in 1890’s set the stage for the development of the strip in the twentieth century these developments are setting the stage for a new type of development and landscape form in the 21st century In summary, we’ve seen that it was a complex interaction of a number of factors, only five of which we considered that informed the development of the strip in the 20th century
- Now I would like to shift our focus to the current state of the retail strip.
- This is conceptual diagram of the typical strip. The black rectangles represent buildings, the gray rectangle parking lots and the images represent conditions that often chraterize the land surrounding the strip
- I believe the that was once the strips greatest strength, i.e. a concentration of easily accessible retail, will prove to be a significant vulnerability in the coming years. While I doubt very much that retail will disappear from the strip, it will assume a more supportive role and that new uses will emerge that attract people to the “Strip” Uses that facilitate social interaction and enhance the quality of life experience. I have read predictions that cite a rise in cultural venues, health, and wellness uses, as well as education and civic buildings.
- Why am I assuming that retail will no longer be king of the strip? Internet sales will dominate the retail market for the forseeable future but that too will change when 3D printing takes hold. (remember the catalogs) Dan Kohn, a 21-year-old entrepreneur who ran a website based in Nashua, New Hampshire called NetMarket. Fast Company & NY Times Ten Summoner's Tales, a CD by Sting,
- Kevin Lynch “An environment that cannot be changed invites its own destruction.” There is no turning back, and the idea that the strip was always meant to be temporary, remember the tax payer properties is finally coming to fruition.
- In addition to vacancy rates, the intrinsic value of the strip building is somewhat low. A good percentage of the American strip is reaching the end of its intended life expectancy and in many cases the buildings were fully depreciated years ago and its more economical to raze the building and start over. Within the last few years we witnessed McDonalds and Burger king tear down and rebuild and we’ve seen a Friendly’s replace with a gas station and a pizza hut torn down.
- Periods of significant growth followed by slow down, innovation occurs during these period of rapid growth.
- Point to make here is the northeast diminishing influence on the national agenda and the allocation of resources
- Significance of aging population and the fact that it tends to be the younger generations that fuel retail and commercial growth
- 5 billion users, 80 million devices Rapid rise of the smart city Connected products a new way of merchandising
- Kondratieff cycle. Heath, wellness and preventative care, not healthcare as we know it today
- Value for Many Developed for less than 100,000 in 2009, by 2011 reached sales of $102 million and pole vaulted Rovia Entertainment (Finnish Startup) to an estimated worth of $2.5 billion dollars.
- Fluid communities, older population craving social interaction, baby boomers and life long learning, private education and the revolution in higher education
- Logistics and distributions, autonomous fleets, storage and services, vertical agriculture, wellness and preventative care, multi-modal hubs