In retail development, there’s nothing wrong with setting themes and restrictions. For years, developers have successfully created “lifestyle” and “value-oriented” centers. But when city government or overly aggressive merchant associations decide to do retail engineering and dictate consumer behavior, things can go bad.
This is the story of two San Francisco streets — one, Upper Polk Street, the other, Union Street, a facsimile of Los Angeles Rodeo Drive. They are located two blocks from each other.
First, some background. San Francisco is the epicenter of overzealous retail engineering. In fact, its anti-chain religion has proven deadly. In 1960, an “extremist” firebombed a Thrifty Drug store under construction in the famed Haight Ashbury neighborhood — resulting in a death, six buildings destroyed and 60 people homeless. A Walgreens drug store now sits just a few blocks from where the tragedy occurred.
Upper Polk Street, in the early 1980s, was a collection of empty storefronts. The street was abandoned after 5 o’clock. Then a small Walgreens opened on a quiet corner there. Within a year, the street began to change. Entrepreneurs opened a deli, a beauty store, a coffee shop and other neighborhood-serving outlets. The Walgreens store was so successful, it moved two blocks south to a larger store with parking. Upper Polk Street is now an active neighborhood retail center. The street is active during the day and after work. It has few empty storefronts, even in the current economic downturn.
Now, take Union Street. Here the villain was not chain stores, but restaurants, instead. The street’s merchant association was dominated by a tyrannical president. For 20 years, the association stopped any new restaurants. Young professionals in the area adapted, of course; they migrated to two nearby streets, which are flourishing. In contrast, Union Street is dominated by empty storefronts, along with a few jewelry and clothing stores.
Economic downturns expose the negative impact of stringent retail restrictions. In the end, consumers determine the character of a neighborhood retail center. Ask the failed business owners along Union Street, and the successful merchants on Upper Polk.
With moderate retail guidelines, consumers — not city government or merchant associations — decide retail character, and retail winners and losers.
