This shouldn’t be a huge surprise to anyone, but sometimes the first step toward a Good Idea is getting a little reinforcement in trying to convince other people that the things we used to do don’t work anymore. This article from a Pittsburgh news site gives a pretty decent overview of why anyone who is trying to get you to build more retail is selling you a Really Bad Idea. Unlike a lot of the idiocy that passes for coverage of economic issues at this point (I’m thinking of a local paper near me that has taken to touting every minimum-wage job announcement as a “breaking news success!”), this article actually includes a variety of sources. And even some reported facts:
Closings are expected to hit 50 percent within 15 to 20 years, adding to the billion square feet of vacant space, retail analyst Howard Davidowitz said.
While malls experienced a nearly 50 percent decrease in foot traffic during the 2013 holiday season, according to the Wall Street Journal, online retailers don’t share the same concerns.
Online purchases constituted 5.8 percent of American retail sales in 2013, nearly tripling from 2004, according to the Census Bureau.
Teen retailer Abercrombie & Fitch Co. said it expects to close 60 to 70 stores in the United States during the fiscal year through lease expirations.
Aeropostale’s shares have tumbled 70 percent in the past year, and the unprofitable company plans to close 175 stores within the next few years.
Those vacancies make up approximately 1 billion square feet of vacant retail space, according to Edward McMahon, chairman for sustainable development at the Urban Land Institute.
“Over the last 20 years, we have built retail space five times faster than sales,” he said.
Ok. I know there is a tendency for all of us to say, “but WE are special… we have something different… that’s not about us.” And it’s doubly easy for us to fall into that trap when our community’s fiscal health depends on sales taxes, like many southern cities, or property taxes, like Ohio townships and Wisconsin cities and many others. And it’s even easier when we have some silver-tongued and probably silver-haired developer claiming that Happy Days Are Here Again and Look At This Fabulous Looking Thing That I Will Build In Your Little Burg If You Just Give Me….
If someone’s trying to sell you on new retail construction, you’d better take a real close look at the fine print. And realize that the odds that you will end up with a vacant hulk on your hands for your residents to yell at you about… well, that’s a sucker’s bet if there ever was one. And way too many are still taking those bets. Don’t let it be your community.