Author Archives: DANTH

Downtown Retail? Part II: Downtowns Will Be Effected To Different Degrees

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The first installment of this retail trends assessment argued that it was very likely that over the next five years retailers would be facing a situation in which consumers would be having significantly fewer discretionary dollars to spend. The first installment also argued that the resulting increased importance of price in consumer decisions would enhance the attractiveness and strength of price-driven value retailers while decreasing the appeal and strength of retailers who offered shoppers opportunities for “trading up.”

However, there will be some variation in the ways that downtowns encounter stressful economic conditions.

A. Regional Economies. There will be significant variation by state – and by region within states – based on their housing markets (not all are tanking), foreign exports (now hot), agriculture (now hot), auto industry (now cold), etc.

B. Shoppers’ Household Incomes. DANTH’s analysis suggests that downtowns in market areas dominated by middle-income households may be stressed more significantly than those that rely on shoppers from either low-income or high income-households.

Downtowns With Lots of Low Income Shoppers.1 In a very interesting piece of research, Cox and Alm have shown that households in the lowest income quintile have a surprising amount of spending power that is far greater than their taxable incomes: though their average household income in 2006 was $9,974, the average total for household expenditures for consumer goods was nearly twice that, $18,153.

Household income correlates with household size. Factoring for this and looking at consumption per person, the difference between the richest and poorest households is just 2.1 to 1, while the income differential between the richest and poorest households is close to 15 to 1. 2

Quite astonishingly, Cox and Alm found that: “The average person in the middle fifth consumes just 29 percent more than someone living in a bottom-fifth household.” 3 This may help explain why, in addition to their population density, “poor” neighborhoods often have bustling shopping districts where merchants can have surprisingly high sales per square foot – e.g., $1,300 PSF.

Cox and Alm explain the surprising purchasing power of America’s poorest households by their financial inflows. They claim that, on average, these lower-income families have access “to various sources of spending money that doesn’t fall under taxable income” amounting to $10,716 per year.4 Cox and Alm claim that the sources of these financial inflows “include portions of sales of property like homes and cars and securities that are not subject to capital gains taxes, insurance policies redeemed, or the drawing down of bank accounts.” DANTH believes that for the many mired in poverty other “financial inflows” may be involved and that substantial portions of these monies may not be very dependent on the business cycle.

DANTH’s review of the Cox and Alm data suggests that only about 16% of the consumer expenditures made by low income families are for discretionary items. This means that 84% of their expenditures are for items that are everyday necessities and for which their “demand” is rather inelastic.

Many downtowns and large urban commercial districts located in low and moderate income neighborhoods are also buttressed against stressful economic times because they have a number of economic functions that must be performed whether the economy is running hot or cold. Among these functions are hospitals, schools, government offices, courts and transportation facilities. Their employees and the visitors they attract are important customer bases for local retailers.

Dart Westphal is the president of the Mosholu Preservation Corporation in the Norwood section of The Bronx (NY), which is dominated by low- and moderate-income households. The local economy is heavily influenced by Montefiore Hospital and has a vibrant commercial district along Jerome Avenue and Gun Hill Road. Westphal feels that his commercial district is not effected adversely by recessions as much as other districts because:

“Hospitals are counter cyclical or at least more resistant to economic slowdowns than other sectors. In the first place people don’t get sicker or less sick depending on the business cycle and our “customers” are not usually making a purchasing decision they can put off. Put another way demand for hospital services is not elastic. Secondly, as other parts of the economy slow down and prices flatten or decline, the ability of institutions to spend money buying and building things may actually increase, helping the area in general maintain economic stability. Local retailers benefit by continuing to have customers (hospital employees) who have jobs. Also at the ‘inexpensive’ end of the residential market there is less purely discretionary spending so that the money that is in the economy is weighted more heavily to basic necessities…not many people trading up to Gucci.”5

Downtowns With Many Wealthy Shoppers. As one observer has noted, there are:
“…Consumers who will buy …regardless of recessionary woes, the kind of folks, who, to paraphrase a WWD headline a few days ago, are more concerned with getting their high heels wet waiting in a drizzle outside of Chanel’s couture show, than they are about this ‘thing’ called a recession.” 6

While this quote may be somewhat hyperbolic, most retail analysts agree that the consumer behavior of the nation’s wealthy shoppers will not be strongly curtailed by the current stressful economic conditions. Some cite households with incomes above $150,000/yr as the income threshold for such recession resistant shopping behavior.

A review of the following statistics from Cox and Alm indicates why the consumer behavior of the wealthy is so resistant to economic downturns. The top quintile of households earned an average of $149,963 in 2006 and spent a total of $69,863 on food, clothing, shelter, utilities, transportation, health care and “other categories of consumption.” The remainder of their income was spent on taxes, $23,376, and most significantly, savings and investments, $47,171. Indeed, among the top quintile of households, all consumer expenditures – discretionary and non-discretionary – represents roughly 47% of household incomes. The same figures for the middle and lowest quintiles are 77% and 182%.

Downtown retail districts such as Rodeo Drive (CA), Madison Avenue (NYC), Greenwich (CT), Wellesley (MA) and Palm Beach (FL) may expect relatively undiminished levels of affluent shopper traffic.

Many “luxury” retailers also developed significant merchandise lines and sales channels that targeted middle income shoppers wanting to “trade up.” They are now being squeezed to the degree that their trading up sales contributed to their bottom lines. They probably will continue to be stressed as long as middle-income shoppers feel they have declining discretionary dollars. These “mass luxury” retailers are often located in strong, revitalized downtown commercial centers such as Westfield (NJ), Englewood (NJ), Old Pasadena (CA), Bethesda (MD), etc. that have lots of upper middle income shoppers.

Downtowns With Mostly Middle Income Shoppers. The first installment of this retail trends assessment detailed the increasing constraints on the discretionary expenditures of middle-income households and noted the importance and susceptibility of dual income households with children. At this point of the analysis it is useful to clarify the implications of this finding for downtown retailers and their downtown organizations.

Working on this assessment DANTH has concluded that:
• For the vast majority of downtowns, dual-income middle class households with children are a very important potential consumer market. They represent a lot of the spending power in a downtown’s trade area. The working women in these households are their most important potential shoppers.
• This has been the case for about 20 years
• Although a few individual merchants in a downtown may succeed with this strategically critical market segment, most downtowns have failed to make local shoppers from dual income households steady retail customers.
• The relatively few downtowns that have successfully developed a dual income female shopper customer base – e.g., Westfield (NJ) and Englewood (NJ) – have been shining examples of downtown retail revitalization
• It is noteworthy that, currently within the downtown revitalization community, there seems to be agreement that the best strategy for revitalizing a downtown’s retail base is to have multi-use redevelopment projects that bring in young professionals (a.k.a. yuppies or the “walking wallets’) and the empty-nesters. When this strategy works the yuppies and empty nesters help create an array of retail offerings and a shopping environment that then can attract shoppers from dual income families
• The yuppie-empty nester-mixed use retail revitalization strategy takes a lot of time to implement, requires large financial investments and usually entails enduring grueling local government permissions and approvals processes
• Strategically, what most downtowns need – especially those that are small and medium sized– is a strategy for attracting the working mommy shopper that is cheaper, quicker and less expensive than the yuppie-empty nester redevelopment strategy.
• Such a strategy will help many downtown retailers and their downtown organizations to cope with the current tough economic conditions.

The pursuit of such a strategy will serve as a filter in the remainder of this assessment.

In our consulting assignments and in our visits to downtowns across the nation, DANTH has observed that in most small and medium-sized downtowns that have successfully attracted working mommies there are other operations that provide merchandise and services for children – e.g., schools; apparel, toy and hobby shops; dance and martial arts studios, etc. These downtowns also tend to have non-retail functions such as entertainment and “pamper” niches that generate traffic retailers can feed on. These observations will provide another filter in the discussion that follows in later postings.
——————————-
ENDNOTES:
 1. A caveat: This analysis does not claim or imply that our nation’s poor face anything other than dire and unacceptable economic conditions. However, in our assignments in Jamaica Center (NY), Fordham Road(NY), Downtown Brooklyn (NY), Norwood (NY), West New York (NJ), Elizabeth (NJ), etc., we have found vibrant low to moderate –income, ethnic shopping centers with surprising total retail sales. We believe this analysis helps explain why those districts are strong.
2. W. Michael Cox and Richard Alm, “You Are What You Spend,” New York Times, February 10, 2008
3. Ibid.
4. Ibid.
5. Dart Westphal, President, Mosholu Preservation Corporation in an email communication.
6. “Fashion Notebook: The Luxury Market, The Recession and What Marketers Can Do About It.” WWD is an acronym for Women’s Wear Daily, a fashion industry paper. Article Here.

 

Downtown Retail? Part I: Buckle Your Seat Belts, We’re in for a Bumpy Ride

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The DANTH, Inc. 2008 Trends Assessment
Every five years – a period known as a lustrum – DANTH Inc. prepares a trends assessment. One of the areas we analyze is downtown retail. Following is a synopsis of the first part of our two-part retail trends study. (For the full report, email [email protected] or visit the trends page on www.ndavidmilder.com.)

What we’ve found is that downtown retailing is entering into a period of stresses – some old, some new – which are detailed below. However, we have also discovered that downtowns are experiencing a number of trends that can be leveraged to cope with these stresses. These more positive indicators will be detailed in our next report and blog posting.

So first, the Bad News. . .

1. There will be growing constraints on consumer spending:
• Income Growth Will Continue To Be Modest for the Next Few Years. And even as income grows slowly, the costs of a standard middle class life will likely outpace that growth.
• Home Values Are Declining. At this point, everyone must be aware of the subprime mortgage crisis and other factors bearing down on home values, which are not expected to recover for many years. As a result, Americans will have less home equity and less ability to leverage that equity for discretionary spending, as they avidly have done over the past decade.
• Energy, Medical, Child Care and Education Costs Will Continue to Rise. It is no longer inconceivable that gasoline could hit $4 or $5 a gallon. BLS data shows that medical costs have risen 168% faster than the consumer price index over the past ten years – a trend that is likely to continue. Child care costs – essential for working mothers – are also increasing faster than the CPI, and college education has experienced a growth rate in tuition and fees over the past decade that is the highest in 30 years. These are all creating pressure on discretionary spending.

2. Recovery From An Anemic Job Market Probably Will Be Slow. For some time the nation experienced scant job growth. We teeter on recession. It is taking longer for the nation to recover jobs after each recession. Trends indicate that the job market would probably take 46 months to recover the jobs lost from a recession.

3. Boomers Are At It Again. As the boomers soon begin to sell their large suburban homes, this will create further downward pressure on home prices. While many downtowns are basing their revival on attracting “empty nesters” it will be increasingly difficult for those nesters to get their money out of their homes.

4. Value Retailers Are Still Growing. Value retailers continue to gain market share on both price and fashion/design as retailers like Target and Kohl’s and, increasingly, Wal-Mart appeal to consumers with “cheap chic” products. More affluent consumers as well as lower-income shoppers are drawn to these stores as the tightness of discretionary dollars penetrates and seeps up the income ladder.

5. Trading Up May Be Stalling. The “New Luxury” or “Trading Up” retail trend –running counter to value retailing –has succeeded by pinpointing middle- and upper-middle-income consumers who are willing to spend more on certain goods that provide superior quality, performance and emotional appeal (think Coach, Calloway Golf, Williams-Sonoma, Tiffany, Trader Joe’s and Sam Adams Beer). This retail trend has supported the renaissance of many downtowns, but the factors presented above indicate that this behavior may be significantly diminished in coming years as discretionary incomes are constrained.

And now that we’ve got you drowning your sorrows in that Sam Adams (or perhaps you’ve traded down to a Miller Light), don’t despair! “Downtown Trends II: Revenge of the Mommies, the Foodies and the Indies” is coming soon and the news gets a little better.

This posting was written with the deft assistance of Mary Mann.

DOWNTOWN MOVIE THEATERS WILL BE INCREASINGLY IN PERIL

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Our Lustrum Trends Assessments.

For the past 20 years, about every five years (a lustrum) DANTH, Inc. has engaged in a review of the social, economic and political trends that are — or soon will be– affecting the health and well-being of downtown, urban neighborhood and Main Street commercial districts. We do this because it is an essential asset when we work on any kind of revitalization strategy for our clients.

Being a curmudgeon, I must also strongly opine that being aware of these trends and their potential effects is an essential component of any district manager’s job. Unfortunately it is a job function that too many managers ignore.

The results of DANTH’s last trends assessment in 2003 are available free of charge at: https://www.ndavidmilder.com/pdf/trends_3_25_05.pdf

Below is a “tease” excerpt from the first installment of the 2008 assessment.

Downtown Movie Theaters Are Very Vulnerable.

Downtown movie theater closures are bad news because:
• They are usually important downtown assets
• Closed cinemas are usually large, highly visible spaces, occupying considerable frontage and consequently a huge negative for a downtown’s image. It is also usually very hard to re-tenant an empty cinema — too many stay vacant for numerous years, often for decades. Some of the conversions, e.g., bingo halls and flea markets, are often less than desirable for spaces having prime locations and large size.

Movie theaters are in an increasingly weakened position because:
• Their hold on adult audiences is small and diminishing. By a five-to-one ratio Americans view films more at home than they do in movie theaters. Move theaters account for only about 12% of the movie industry’s revenues.
• Even the most frequent movie goers prefer home viewing
• Many theaters have low operating margins based primarily on revenues from concession stands and screen ads. Just a small drop in the paid attendance can be devastating financially: a mere six percent drop in attendance in 2000-2001 put most of the theater chains into bankruptcy.
• A relatively modest reduction in paid attendance by a small group of frequent moviegoers could easily erase these meager margins. The frequent movie goers do not have to completely stop visiting movies theaters for the impact to be devastating. This is an important point.
• The frequent movie-goers have demographic characteristics that highly correlate with the use of computers and other electronic home entertainment equipment
• Many theaters lack amenities such as many screens, large screens, first run films, stadium seating, clean restrooms and theaters floors. This is especially true of cinemas in small and medium-sized downtowns
• Theaters provide a very small revenue stream for the major movie studios. Consequently, the studios are incentivized to make decisions that will help other film distribution channels although they may hurt the theaters

Rival Home Film Distribution Channels Are Poised To Grab Market Share.

Competing film distribution channels have been improving, many finding formulas that are aimed straight at the three key variables that most impact film viewer behavior — convenience, film selection and cost:
• On-demand cable TV has great convenience, wide household penetration, competitive prices and indications that some large operators will be offering significantly greater film selections. The introduction of HD broadcasts will also improve product quality and enhance competitive strength
• Apple TV and Vudu have a strong films service formula that could really grab market share if they can offer sufficient film variety. They, too, already offer on-demand convenience and competitive prices. Apple, because of iTunes, has a large amount of household penetration and brand loyalty.
• The competitive strengths of the brick and mortar DVD shops and the mail delivered DVD services versus movie theaters has been improved recently by the growing presence of large HD TVs in American households and the final victory of the Blu-ray HD DVD format.

Tipping Point Scenarios.

Below are some scenarios under which a tipping point might occur:
• The cable TV and Internet film services improve their film libraries sufficiently to become real competitors with movie theaters.
• Real household incomes erode to the point that the cost of movie consumption grows in importance in consumer decision-making. The cost advantage of home viewing, popcorn, sodas, baby-sitting, etc, is substantial. Given the recent low growth in median household incomes and the soaring costs of medical services, energy, college educations, etc. and the reduced values of private homes, this scenario is likely to have substantial impact.
• The convenience and comfort of home movie theaters increase to the point that consumers prefer the home viewing experience even more than reported in the 2006 Pew survey. This is occurring now; the question is how big its impact will be.
• The major studios finally go for “simultaneous releases.” In 2006 and 2007 there was a lot of discussion within the major movie studios about releasing films to theaters, cable TV and Internet film services at the same time, with DVDs being released three months later. A major survey of movie audiences in the USA, Japan and Germany, which account for over half of the world’s film market, found that simultaneous releases would enable the studios to increase their revenues by 16%, but cause the revenues of movie theaters to shrink by 40%. More recently there has been some discussion of simultaneous releases for a limited number of films.
• An accumulation of impacts from all of the above.

The Complete Report

DANTH’s complete assessment of the dangers that downtown movie theaters will be increasingly facing will be posted on our website www.ndavidmilder.com and publicly available by March 24th, 2008. As our current work on trends progresses, I plan to periodically post the complete reports of our findings on our website and excerpts on this blog. Here are some of the other topics we’ve been looking at in our assessment:
• Time-pressured people continue to be downtowns’ best friends
• Retailing is in for much tougher times
• Post-Kelo redevelopment
• Boomers are now seniors and a great market segment for downtowns
• Green redevelopment
• Owners or renters: downtown residential redevelopment
• Downtown crime redux
• Downtown solution trends:
— Mixed-use projects
— Transit-oriented development, getting more important every day
— Place-making
— Niche development
• Downtown organizations: a time to alter missions, roles and responsibilities
• The internet and downtown revitalization

Unfortunately, some of the trends DANTH identified suggest that downtowns will soon be confronting major new challenges. DANTH believes that being forewarned enables downtown organizations to be forearmed. Although proven solutions to these emerging threats do not exist, I will try in my postings to outline some approaches to finding them, while welcoming other members of the downtown revitalization community to share their solution suggestions.

Despite The New National Wave Of Crime, Downtown Security Strategies Still Stand

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In a June 24, 2007 posting, “The Downtown Crime Problem Redux?”, I asked if crime was again becoming a crippling problem for our nation’s downtowns because:
“(T)he FBI just announced an increase in violent crimes for the second straight year, an occurrence that signals the first continued spike in homicides, robberies and other serious offenses since the early 1990s. This spike is especially noticeable in medium-sized cities and cities located in the Midwest. In large cities such as New York, the crime rate continues to decline.

What is unknown at this time is how this recent uptick in crime has impacted on downtown districts.”

I was concerned because such an uptick would be a strong indication that the new policing strategies combined with the creation of 24-hour downtowns were no longer effective ways to solve downtown crime problems. That was important since I had claimed in DANTH’s 2003 downtown trends report that “crime is no longer the barrier to downtown revitalization that it once was” (see our website to download the report https://www.ndavidmilder.com/pdf/trends_3_25_05.pdf).

I recently conducted an online search for information about downtown crime rates around the nation. I found data for 12 large and medium-sized cities. While this is admittedly a small sample, the results seem reassuring:

Atlanta, GA, Aug.2007. Population: 486,411
1. For several years downtown had 9% of city’s crime, but a daily population of half the size of the entire city. It now has just 6% of the city’s crimes.
2. Downtown there has been a 61% drop in major crimes over the last 6 months

Boise, ID July 2007. Population: 198,638
Continuing trend of declining crime downtown, with a 14% decline in the last year.

Chapel Hill, NC Nov. 2004. Population: 49,919
1.Reports of “major crimes” had gone down in each of the last three years for which the numbers were available.
2, But the number of arrests for crimes committed in the downtown had gone up. Leaders feared people could still feel unsafe even though statistics showed some positive trends.

Cincinnati, OH May 2004. Population: 332,252
1.Last year, serious crime in downtown dipped by 1 percent. The bulk of all downtown crimes are thefts, many from cars
2. Of the city’s 75 killings in 2003, one was in the Central Business District.
3. Major problem: area is still perceived to be unsafe

Dallas, TX, January 2008. Population: 1,232,940
1. Car break-ins were a problem a few years ago, but crime has gone down in the past
year
2. “I tell people safety and crime is old news downtown,” says the downtown manager

Dayton, OH, January 2008. Population: 156.771
1. In January, 2008, City of Dayton officials released statistics that show the city’s crime rate continues to decline significantly.
2. Targeted crimes downtown declined by 39 percent over the past five years. From 2006 to 2007 alone, key downtown crime categories dropped more than 25 percent.
3. A further perspective on downtown safety: in 2007, statistics for targeted crime categories downtown represented just 5 percent of the city’s overall targeted crime numbers.

Lawrence, KS, Nov. 2007. Population: 88,605
1. Since 2001, violent crime has risen in downtown Lawrence
2. According to the Kansas Incident Based Reporting System, 41 assaults were reported in downtown Lawrence in 2001, a number which has steadily increased in the last five years. In 2006, there were 245 reports of assault and battery in downtown Lawrence,
an increase of nearly 100 from the year before.

Kansas City, MO June 2005. Population: 447,306
Between 2002 and 2004, the period before and after the improvement
district was introduced downtown crime had dropped in all categories: robbery, 34 percent; juvenile crime, 28 percent; public intoxication, 21 percent; suspicious behavior, 10 percent; and miscellaneous crimes against property, 10 percent.

Los Angeles, CA June 2007. Population: 3,849,378
1.The Downtown crime rate has dropped to its lowest level in more than 60 years.
2. Even as Los Angeles’ decrease contrasts with the national trend of rising crime rates, statistics show that the city still contends with high levels of gang-related violence. There was a 14% increase in such activity in 2006

Miami, FL, 2006. Population: 404,048
1. Over the past five years, Downtown Miami has become a safer place. Investment has soared, new businesses have opened, and the population continues to grow.
2. While the same decreases in crime incidents are registered city-wide over the 2000-2005, the overall decreases are more dramatic within the DDA boundaries.
3 Almost every category of crime incidents decreased within the DDA boundaries between 2000 and 2005.
4. Most notably there was nearly a 68% decrease in robberies and 38% decrease in larceny/thefts.
5. Criminal homicides within the DDA account for less than 4% of those occurring city-wide.

Philadelphia, PA 2004. Population: 1,448,394
1. The 9th consecutive year that there was a reduction in crime downtown
2. Statistics that document a continued drop in downtown crime: Comparing 2003 and 2004, part one crime (aggravated assault, homicide, rape, burglary, robbery, stolen auto and theft, minus retail theft) in the 6th and 9th police districts fell 9.46%; the Center City District experienced a 7.99% drop. Between 1999 and 2003, part one crimes, not counting retail theft, fell 35.77% in the 6th and 9th police districts and 31.94% in the Center City District.
3.Theft from auto declined 19.7% between 2003 and 2004 in the 6th and 9th police districts and 16.77% in the Center City District. Between 1999 and 2003, theft from auto fell 36.58% in the 6th and 9th districts and 30.72% in the Center City District.

Portland, OR, Jan. 2007. Population: 537,081
1. Crime drops for third straight year
2. 16% decrease in 2007

Some Observations:
• Except for Lawrence, KS, a medium-sized college town in the heart of the Midwest, all of the other downtowns report declining crime rates
• In several downtowns (e.g., Cincinnati, Atlanta, Dallas Miami and Kansas City) the wording of the report suggests that the downtown organization is still dealing with the problem of the fear of crime being out of sync with the actual level of crime. This is a long existing problem. Looking at the housing data in Eugenie Birch’s report “Who Lives Downtown” suggested a possible explanation: downtowns that lost considerable populations sent lots of people to live in other parts of the city who would tell others negative things about the downtown and who would be hard to persuade that things had improved. These “lost residents” created a powerful negative word-of-mouth network that spreads fears about being a crime victim if you go downtown. For example, between 1970 and 1980 Downtown Miami lost 41% of its population; Downtown Atlanta lost 21.9%; Downtown Cincinnati lost 27.2%; Downtown Dallas lost 27.7%. In contrast, Center City in Philadelphia only lost 8.8% of its population between 1970 and 1980 and had population increases thereafter. Downtown Portland also had a small population loss during the 1970s, 2.2%, and population growth thereafter. Surprisingly, Downtown Los Angeles has had a growing residential population since 1970.
• The situation in Downtown L.A. also demonstrates that high gang activity need not mean a higher crime rate nor impede a reduction in the fear of crime. This is consistent with the situation in Trenton, NJ that I reported on in a previous posting: Trenton has about 2,000 Bloods in a city of 85,000 people. The crime rate has fallen, though gang activity has risen and violence is confined to areas where the gangs are dominant.

An Ethnic Downtown With Many Retail and Fast Food Chains

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For many years downtown revitalization experts lamented that large, ethnic downtowns — those with lots of African American and Hispanic shoppers — were being avoided by major retail chains.

That is certainly no longer the case. Here, in New York City, one of the hottest retail locations is along 125th Street in Harlem. Many retail and fast food chains are also occupying important storefronts in the outer borough downtowns such as Jamaica Center in Queens, Downtown Brooklyn and Fordham Road in the Bronx. They are also opening in strong neighborhood shopping districts such as Jerome Avenue in the Bronx and and Corona Plaza in Queens.

Below is a list of the national and regional retail and fast food chains that I found on a visit yesterday to Jamaica Center.

I first went to this commercial district with my mother to buy shoes back in 1949, which was toward the end of its “Golden Age.” I continued to shop there occasionally for sports equipment and sneakers until I went away to college in 1958. It was not until the early 1980s that I returned to carry out consulting assignments for Regional Plan Association and the Greater Jamaica Development Corporation (GJDC). Though my involvement in the revitalization of this district ended in the early 1990s, I have continued to visit every few years to take photos and gauge its progress. It’s just two miles from my home office.

The revitalization of Jamaica Center has been a long process, starting back around 1968 with the creation of the GJDC. Over a billion dollars have since gone into the revitalization of this commercial center, paying for such things as the re-routing of a subway line (E train), tearing down an elevated line, building York College, the construction of a one million SF Social Security Building, new court buildings, building a terminus for a monorail link to JFK, etc.

By the early 19980s the quality of the retailers was ebbing and this trend culminated with the closing of two major department stores, Macy’s and Gertz. White shoppers from the northern and western parts of Jamaica Center’s trade area stopped visiting, choosing instead to drive east to the shopping malls in Nassau County.

Many of the other neighborhoods in the trade area had African American households with relatively high annual incomes for Queens. Cambria Heights, for example, recently had a median household income of $69,030, while the median income for Queens was $49,780. Many of the residents in these neighborhoods were civil service workers and teachers, often in dual income households. Though large numbers of these residents passed through Jamaica Center each weekday to use the subway on their trips to and from work, they, too, avoided shopping there because the retailing had come to focus on low income and teenage markets and the area had developed a reputation for street crime and drug use and sale. Nevertheless, the pedestrian traffic along Jamaica Avenue continued to be a “beehive of activity” and some of the merchants were doing $s/SF that rivaled those of retailers in some of Manhattan’s best locations.

I was greatly encouraged by my recent visit and feel that the end game, the “take off” phase of Jamaica Center’s revitalization is in sight. The primary reason for my optimism is the recent announcement of a major project that will bring over 300 market rate housing units into the downtown, with a number of similar projects on the drawing boards. Another reason is that the retailing’s strength now seems to be more than shops featuring “urban wear,” with chains having a strong middle class appeal opening, e.g., Home Depot, Marshall’s, Zale’s, Nine West, Old Navy. The teens will still shop in Jamaica, but now their parents might as well.

The changing nature of the district’s retailing is also, in my opinion, reflected in the new store facades that have been built in recent years. They are much more attractive, with smaller signage, a better sense of proportion and though the colors used might offend some with Main Street design sensibilities, they are often still very pleasing.

Another indicator of this district’s strength is that commercial rents along Jamaica Avenue recently have reached as high as $150/SF for choice locations.

In the list below I have noted some of the chains that were open in Jamaica Center and have since closed. It should be noted that all of these closures involved chains that were having overall problems.

At the end of the list I have provided a link to a web-based photo album that contains photos of Jamaica Center’s retail chains.

National and Regional Chains in Jamaica Center January 25, 2008

Payless (2 stores)
Gothic Furniture
Quiznos Sub
UPS Store
Java’s Brewin
Game Stop
Burger King
Taco Bell
Pizza Hut
Dunkin Donuts
Subway
McDonald’s (2)
Duane Reade
Walgreens
Sleepy’s
Footlocker Kids (converted to Kids)
Zale’s
Nine West
Radio Shack
Marshall’s
Conway (2)
Home Depot
Fabco Shoes (2)
Footco USA
Jimmy Jazz
Toys ‘R Us (closed, chain in trouble)
Kids ‘R Us (closed, chain in trouble)
Wertheimers (closed, chain in trouble)
Jennifer Convertibles
Rainbow
Ashley Stewart
Tick Tock
Dr Jay’s
Vim
Modells
Cookie’s Department Store
Porta Bella
Strawberry
Parade of Shoes (closed, chain in trouble)
Youngworld
Athlete’s Foot
Shoppers World
Old Navy
The Children’s Place
Gap (closed, chain in trouble)