Tuesday, May 4, 2010
Buyer's Remorse in OKC
The goods: Whole Foods. Trader Joe's. Saks. Nordstroms. H&M. Restoration Hardware. Urban Outfitters. Anthropologie. Ikea. And more. Why won't these stores come to OKC? What's wrong with retail in OKC that seems to be keeping these stores out, while they continue to locate in cities such as Richmond, Birmingham, Tulsa, Omaha, Des Moines, Albuquerque, Boise, Fort Worth, and so on? What can we citizens of OKC do, if anything at all, to improve the situation?
Look at all of those cities that have these stores we want but can't get. The list goes on and on, as I included some of these cities earlier.. and a LOT of these cities are peers or lesser when compared to OKC. That is what's surprising, so what is it going to take to get these stores in OKC, an act of Congress? What is it that is bringing these stores to other cities? Well, simply put..good retail space available. If Urban Outfitters or Anthropologie were to locate in OKC, which we believe they want to, where would they go? A strip mall on Memorial Road? Penn Square Mall? 50 Penn Place? Maybe a kiosk inside one of the metro's top Wal-Marts? That's pretty much the state of retail in Oklahoma City, a lack of a suitable shopping center that meets the standards of these higher-end "elite" chains.
Let's examine Birmingham, which has a Whole Foods in the Cahaba Village development located in the suburb of Mountain Brook, Alabama. Cahaba Village (pictured) is a true mixed-use urban town center development that passes my scrutiny. It's not that big, more than half (50,000 sf) of its 96,000 sf of retail are the Whole Foods--but the project is actually mostly residential, which several floors of chic lofts above the retail on the street level. The same company, Bayer Properties, has developed a collection of similar lifestyle centers dubbed "The Summit" and was until recently attempting a project in Edmond (before Wall Street tanked). "The Summit" in Birmingham is anchored by Saks Fifth Avenue(*) (much like Utica Square in Tulsa), and a huge Belk. Other "elite" retailers included in The Summit in the Ham are: Anthropologie(*), BCBGMAXAZRIA(*), bebe(*), J. Jill, Juicy Couture(*), New York & Co, White House Black Market, Urban Outfitters(*), Tommy Bahama(*), Lucky(*), J. Crew, Brooks Brothers(*), Banana Republic, Coach, Restoration Hardware(*), Coldwater Creek, Pottery Barn, Apple, and more. And yes, this is Birmingham, Alabama we're talking about. A city about the same size as OKC (slightly smaller) with a poor, industrial reputation, only one Fortune 500, and worse-off demographics than OKC. (The retailers with a star next to them denote ones that do not exist in Oklahoma City.) A tenant list of The Summit in Louisville and New Orleans wasn't quite as elite as Birmingham, but it did include at least 5 of the names, but no Saks, etc. In Louisville, many of the stores are instead in Mall St. Matthews, and we all know New Orleans has a lot of elite retailers. Many of the stores in The Summit in the Ham are also in the Riverchase Galleria, in the nearby suburb of Hoover as well--including Brooks Brothers(*), J. Crew, Banana Republic, WHBM, J. Jill, NY & Co, etc--it surprises me that Birmingham has two of these, when OKC only has one or none. Birmingham also has a new outlet mall, WaterMark Place located in Bessemer, Ala. From the shopping perspective, Birmingham has got it going on! And I'll be honest, I have a soft spot for the Southeast--best part of the country, with its genuine people, urban cities, mountainous topography, delicious sweet tea, and pleasant weather.
Another city: Richmond. There, the new Short Pump Town Center includes an Urban Outfitters(*), Guess(*), Macy's, H&M(*), Jacardi Paris(*), Fossil(*), Levi's(*), Nordstrom(*)..and many more stores. The Stony Point Fashion Park (pictured) in west Richmond carries many of the elite retailers that Short Pump doesn't..Saks(*), Anthropologie(*), BCBGMAXAZRIA(*), BOSS(*), Brooks Brothers(*), Coach(*), Cole Haan(*), Louis Vuitton(*), MAC(*), Restoration Hardware(*), Oakley(*), and more. Clearly Richmond raises the bar even higher, with Louis Vuitton and other Stony Point retailers. It's true, Virginia is for lovers (of first-class shopping).
Another city: Omaha. So far the most interesting lifestyle center I've come across is Village Point, off of Dodge Rd in far west Omaha--the center has a FLW prairie school motif--along with the typical stores that these lifestyle centers come with, Coach, Fossil(*), J. Crew, J. Jill, Banana Republic, Jos. A. Bank, and so on.. so not really anything OKC doesn't have. Then you add in Regency Court, which has more of the Penn Square-echelon tenants..WHBM, Pottery Barn, Williams Sonoma--and Anthropologie(*). One Pacific Place has more of the same pretty much..Ann Taylor, Banana Republic, Chico's..so basically the same as Spring Creek in Edmond. Except that it also has California Pizza Kitchen, which I know OKC would love to get its hands on. Look at this list of local retail in the Old Market, the "Bricktown/Brady" part of DT Omaha, bookstores, clothing stores, art galleries, wine bodegas, and more--supposedly around a hundred retailers. That's awesome. Oh, and they've had Whole Foods for a while and just announced that they're getting a Trader Joe's, the result of a community initiative to convince TJ to locate in Omaha. (Interestingly though, it's worth noting that Omaha doesn't have Macy's and is just getting an Apple Store in Village Point.) Aksarben Village and Midtown Crossing, which are huge mixed-use projects currently under construction, will add more to Omaha.
And we all knew it was coming.. I give you, Tulsa. Truth is, I always seem to lose people when I bring up the argument that Tulsa is still superior to OKC in many things, EVEN if our city is on NBA scoreboards and theirs isn't. But you're going to have to concede retail, or I will keep bringing this up time after time. The reason Tulsa has better elite retail options than OKC could be many..it could have to do with a time that Tulsa was more important than it now is, or that it is still home to the state's two highest-income ZIP codes, or it could be that Tulsans are better at supporting high-end retailers (maybe there's more pressure to buy high-end things for people who live in Tulsa than in OKC?). But I would argue all of that is irrelevant and it really just boils down to this: Tulsa has Utica Square, easily Oklahoma's most elegant shopping center, which has ALL of Penn Square's upscale retailers in addition to several OKC doesn't have such as the brand-new Anthropologie(*), Saks(*), Miss Jackson's (a cool local dept store), Coach(*), and Restoration Hardware(*). Utica Square is 50 years old, and soon it will be placed on the National Register of Historic Places more than likely--but it still continues to boast the best retailer directory as well as shopping environment in all of Oklahoma. Utica Square is the standard for retail in this state (thanks mostly to its location at the heart of prestigious Midtown Tulsa), whether you like it or not.
To be certain, when you add up all of the "elite names" that Tulsa has that OKC does not (once you've gone into upscale restaurants like Fleming's and Wolfgang Puck Bistro that's opening in Brookside). The list gets extensive when you add to the Utica Square retailer list, other stores like Fossil, and then go on 71st Street to find an IMAX Theater, Dave & Buster's, a "Magnolia" Best Buy (I guess they're better somehow), Hard Rock Hotel & Casino, and so on. Even if they're not retail, these are "elite names" with national recognition. OKC just lacks elite names with national recognition. Oh and they've also had Whole Foods in Brookside for almost 3 years now. Yes, it's only there because it was originally a Wild Oats (if you believe Tulsa was incapable of landing a separate Whole Foods), but after Whole Foods acquired Wild Oats they closed many of them, kept many of them smaller, and renovated and expanded a few others such as the Brookside store. Tulsa's Whole Foods is, by all means, a Whole Foods, however you slice it in order to denigrate Tulsa.
So we arrive at the inevitable conclusion.. OKC is lacking in this department, no matter how you slice it. We are working on it, however, or trying to at least. How many lifestyle centers have been proposed in the last 5 years? 10? 20? 30? Probably around 10, but you get my point..a LOT..and so far we have nothing to show for it. The sad fact is that in Oklahoma we are still building strip malls when the rest of the nation has moved on to building mostly lifestyle centers. There has not been a town center-type development built in Oklahoma since 1950, probably making us one of 5 states that don't have a new one. We've also pretty much come to the conclusion that in order to attract these types of developments and encourage the new trend to take root in Oklahoma, we may have to subsidize it a little. That's okay, Austin subsidized their hot new town center, The Domain--with a $20 million TIF district. Norman put up a TIF district for University North Park, and in exchange, all we got was a lousy strip mall. Edmond was prepared to go in on the Covell Town Center, even put the proposed Edmond convention center there, but the economy tanked and nothing has ever happened since. The only two projects that have come to fruition that somewhat resemble a step up from the traditional strip mall are Spring Creek in Edmond and the MWC Town Center in Midwest City. MWC is pretty much a huge strip mall with a small town center portion at the heart of it that is alright. There were some pretty good retail projects proposed, too..the factory outlets, Tuscana, Quail Springs Ranch, Bricktown Village, Bob Funk's other Kilpatrick Tpk development, a new lifestyle center currently proposed for Memorial/County Line, The Summit, Shops at Remington, Copper Creek Marketplace, University North Park, Riverwalk Plaza, Railway District, one that was proposed at 2nd/I-35 in Edmond, Kelley Pointe, Gaillardia Towne Center (developed office, but no retail), Crown Heights, The Waterfront, and more.. the list goes on for town center busts.
There is one bright spot, and that is the unconventional Classen Curve project. Now, I'm not dogging Classen Curve. I like Rand Elliott's work about 70% of the time, and this is no different..I am about 70% favorable toward this project, and the other 30% will no doubt come when all of these awesome new tenants open up. Classen Curve is going to be a special place for shopping in Oklahoma City, but it may be overhyped in my opinion. First the good news: The design is unique, innovative, and about as modern as you'll get in Oklahoma. The really good news is that super awesome tenants are popping up to be a part of this primarily because Chesapeake is behind it, and you can't go wrong with that. The bad news is that the site is only 95,000 sf total. About 20,000 sf, as I believe, will be taken up by the new Balliet's--which will be by far, one of the coolest local department stores around (women's-only). Balliet's has been in 50 Penn Place decades, and with everyone bailing there it made sense that they leave for somewhere else. Classen Curve is closer to Nichols Hills AND Rand even specially designed their two-story building just for them. In addition, virtually everyone in the know right now is saying that Whole Foods is currently building at Grand/Western where they tore down the funeral home last year. Classen Curve is an exciting project, Balliet's will be great and Whole Foods is a long time coming--but the remaining square footage is only just over 60,000 sf and there aren't ANY other spots that are even big enough for an Urban Outfitters, a H&M, or an Anthropologie--so none of that kind of retail will go there.
Chesapeake, who has been tight-lipped and refusing to release any details on this, most likely had a signed letter from Whole Foods before they tore the funeral home down. Now Chesapeake has torn down about 5 different apartment buildings along Grand between Western and 63rd, another on 63rd, and tons of site work has begun around the community gardens they put in off of Shartel. There is absolutely no telling what is going on but it is something HUGE. Most likely a lot of corporate expansion, which we can count on--except that Chesapeake has always been one to proudly announce anytime they break ground on a handful of new office buildings. It's the retail projects that they keep top secret for whatever reason. There is an overall masterplan here that was released a few years ago, but it really shows nothing north of 63rd. Looks like a mixed-use town center to the west of the headquarters, but one of the few things we do know is that the economic downturn has slowed Chesapeake's progression on their campus development.
So much talk about suburban lifestyle centers. Suburban lifestyle centers in Birmingham, Richmond, Omaha.. talk about more urban developments like Utica Square and Chesapeake, but still nothing that really relates or adds anything to downtown. If there is anything that we have done an impeccable job of in OKC, it is focusing on our downtown before anything else and truly elevating it to become the beating heart of the metro. Why don't we try to get some of this retail we lack to come downtown instead of Far North, Edmond, or Norman? Why isn't downtown being proactive on the retail front before it gets beaten out by Edmond?
The answer is that a few people are acting. In a post the other day I mentioned the Red Dirt Marketplace project that is set to open on the Lower Canal in June. I'm very excited for this one and can't wait to check it out when I'm back home this summer. In fact, I believe that the local retailers is what downtown needs--and not chain retailers. Even though I still believe that there's no reason downtown shouldn't be focusing on landing your "urban essentials" like GAP and Apple (virtually every good retail downtown has a GAP, even Athens, Georgia..), I really believe in wanting to keep chains out to a certain extent.
But part of the problem with this is that downtown will absolutely REQUIRE some kind of anchor. Typically, in order to be successful, shopping centers require anchors. There is no anchor for downtown retail, although there are a few good smaller stores here and there. The concerning trend, a result most likely of lacking an anchor, is how quickly some good stores have gone out of business. Firefly Clothing, LiT Clothing, and the Crescent Market all went out of business in the last few months. Envy is still in business, to my knowledge, and I have heard that they may be locating on the street level of the Bricktown Canal right above where Chad Huntington is putting in his Red Dirt Marketplace, and where the Brewer's are putting in other new tenants as well. The problem with this is that it is still lacking an anchor and no matter how wishful the thinking, there is absolutely no way in hell that OKC is going to get a Nordstrom's or a Sak's that is not a part of a stellar shopping center project with a good developer behind it. In order to accomplish this, I propose 4 alternatives, each with varying degrees of desirability and their own pluses and minuses.
Starting with my least favorite alternative:
1. Allow Wal-Mart to come into downtown. Wal-Mart DOES do urban models, they exist in Dallas, Austin, Atlanta, and other cities--and they actually are kind of cool. The perfect site for an evil big box in my opinion is the site of The Hill, a doomed condo project that is destined to just sit as a mudpit for decades if we don't find another use for the land that doesn't really require street frontage, all of which was used up by the few crappy townhomes that DID get built in that project. A way to temper the evilness of this proposal would be to try and get Target to come in, instead--their urban stores make more sense with the urban demographic, anyway. The whole point to all of this is that it would be an anchor to bring retail in that would require the smallest city subsidy (maybe for Target) if any at all, and a natural development influx could follow afterward.
2. A huge subsidy for a town center project in downtown that includes a Sak's or a Nordstrom's and the other retailers we are lacking. The subsidy could simply come in the form of a 10/15-year TIF district which I would presume could generate as much as $20 million. Remember what the ULI panel said about downtown retail? We will have to subsidize it, and they didn't think that the local climate here would be very favorable toward that. Luckily the local political climate isn't needed for a simple TIF district, I think--unless of course someone opposes it and gets it put on a ballot, in which case it will probably pass anyway. The downside to this, and I'm not an economist, but I don't think it would be a very natural development influx..and I don't know that it would ever put in motion a natural retail development cycle either. Another downside is that it wouldn't be doable in the interim because unfortunately, big projects like this in downtown are held-up waiting to see what happens with Core to Shore--BUT maybe Devon and Project 180 completion would be "epoch-making" for such an occasion? We could hope.
3. My favorite alternative: A minor subsidy, just doing whatever Grant Humphreys needs in the form of minor assistance, to get his Crown Heights mixed-use project off the ground. This project WAS going to include some kind of organic grocer, plus a sizable collection of additional retail as well--in a true town center setting, in a great location as well (similar to the upscale environs of Midtown Tulsa, but on a smaller scale) and great access to I-235 and downtown. This might be the farthest south we are able to get retailers like Create & Barrel (which is supposedly coming to OKC) and Trader Joe's to come, because even though their urban stores are the coolest, they consistently go where the demographics. Some companies will just go where the quality space is available, others are more insistent on the rooftops being there and these are your stores that are almost certain to end up in Edmond or hopefully as far south as Nichols Hills, but Crown Heights would be a great option for most of the retailers we want to bring into OKC.
4. The fourth alternative, and in my opinion this is something that has to be done regardless of what kind of national anchor we try to bring into downtown, but this is that we need to try and convince some well-established locally-owned businesses to move downtown. I'm talking particularly of Full Circle Bookstore, which is one of my Top Ten favorite bookstores in the country. It's not Book People, nor is it the Elliott Bay Book Co in Seattle, or other more famous bookstores--BUT it is definitely the best bookstore in Oklahoma, and there are only about 15 cities (in my guestimation) that have a bookstore this cool and special. Their Oklahoma book section is also awesome. I think Full Circle regulars and people in OKC in general ought to start hounding them to move downtown. Look at 50 Penn Place..what a dump, and now that Balliet's is moving out and Talbot's is long gone, this seems to be the perfect opportunity to jump ship. They're going to move either way. Downtown OKC Inc. and Bricktown, Deep Deuce developers, MidTown developers--etc, ALL need to be targeting them. I think they'll be highly receptive to the idea..Jim Tolbert was initially involved early-on in Bricktown, so he's a downtown kind of guy. He's also heavily involved in the downtown arts scene, further proving the point. Why is his amazing bookstore still located in a dying shopping mall out in the burbs?
Another key locally-owned business that might want to consider a move downtown is Mr. Ooleys, especially if a top-notch retail space comes open that is better than the space they currently have in the front of Penn Square. I think that Ooley's has a special customer base that is dedicated enough to follow them downtown, considering how specialized his store is and how he really goes out of his way to cater to his customers. Where would be a good Ooley's location? What about on the Canal in Bricktown, in one of the Brewer's buildings that they're bringing tenants to. Store fronts could go as follows: Envy Clothing, Sammy's Pizza, smoothie shop, Mr. Ooley's, (with the Red Dirt Marketplace underneath on the canal-level). That's a lot of converging factors right there, and Bricktown retail MIGHT just begin to take off.
But the reality is that there are TWO impossibilities surrounding downtown retail and they are, in the end, equally impossible. The first is that Sak's is NOT going to just up and locate in downtown OKC because they will suddenly realize the error of their ways of not being in OKC, and specifically Downtown OKC. The second is that it is very difficult for a locally-owned business WITHOUT a reputation built up to be successful in a start-up market, although it's not to be completely ruled out.. if you can captivate a scene such as the Plaza District has, sometimes you can get a lot of synergy out of a start-up market completely comprised of start-up businesses, but I'm just saying it's difficult to do even then, and that's not going to be an option for Bricktown because that district is too conflicted trying to cater to two completely contradictory scenes: They're trying so hard to be "family friendly" (which has obviously done WONDERS for Bricktown retail), and then they also focus on the nightlife--probably where Bricktown has been most successful. So my point, after a lot of sidetracking, is that in order to make a fledgling retail market successful you need non-fledgling names, and those names can be national..or what I don't think people in OKC have realized, is that those names can be LOCAL too.
Seriously. Let's start a campaign to get, specifically, Full Circle, and Mr. Ooley's, to move downtown. Along with Balliet's which is already moving into Classen Curve, these stores are OKC's absolute best local businesses--and they set the standard for local bookstores, menswear, and upscale women's dept stores. These stores will be a hit no matter where they locate as long as it's a good space and a good location, and they don't require certain demographic or rooftop thresholds that national chains do because Tolbert and Ooley know that their OKC customers will go to Downtown to visit their store. Period.