Chapter 2 - The Unexpected "Anti Local-Business" Design of Malls and Stripmalls
Recently I encountered a Meme on Facebook - I know that
Facebook is a place full of off-handed comments, and not all need responding
too, but I just wanted to share my point of view on that Meme. I too share its
opinion, which is that we need more fresh produce stalls and fewer McDonalds. I
have attached a thumbnail of the post:
What I want to highlight though, is that the Meme seems to imply that it is consumer behaviour and large corporate entities that are completely at fault for the abundance of McDonalds et al. What I would like to like to highlight is the governmental regulation that prevents, at the very least, competition on a level playing field. While the government authorities who regulate food systems are numerous, complicated and many, with different jurisdictions, I will highlight most the City of Kamloops regulations that are enforced through either interpretation of code, local bylaws and zoning. I am not always sure if people make the bridge from how zoning and bylaws affect the future they wish to see – like a future where small, local, start-ups can compete against large corporate McDonalds.
Capital – and Rent – are in my view the two largest barriers
to entry for a new business, like a farm stall, small bakery, soap maker, etc.
If you want to get started as an entrepreneur, your first
battles to overcome are usually those of capital. The money you need to get
started. The larger the space you rent, the more it will cost. I think
that it is self evident that this statement is true. Therefore, the converse
should also be accepted as true, that small spaces cost less. So, if you want
to find a small space to get started and spend the least on start-up, you need
to find a small space. Smaller space is fewer walls to paint, less shelving or tables and chairs to buy - just less expensive.
Of course, government subsidy could pay the costs for a
start-up that align with the government’s goals, but like all non-profit social
services, those start-ups will be forever dependent upon politics and subsidy, they won’t compete in a natural way, and thusly will not be sustainable without the government
support. Thankfully, given the right circumstances and opportunity though, they
should not need the support.
Most small spaces will be found in older neighbourhoods,
basically Downtown and Tranquille. Nearly all development outside of these two
areas are Stripmalls, all built with large floor plates. Stripmalls have a
second challenge for small local retailers, and that is the landlord. Most
malls/stripmalls are owned by large corporations – either Real Estate Investment
Trusts managed by staff and boards of directors in large cities, or simply
large corporate entities also staffed by managers in large cities. These types
of landlords do not necessarily have high rents, but they like strong, dependable
tenants. Which for them means other large corporate tenants, franchises, particularly
lucrative professions like dentists or pharmacies. Liquor stores are about the
only exceptions to the rule. Anecdotally, someone looking to make a neighbourhood
cafe in Orchards Walk recently was told by the landlord: we only want Tim
Hortons, McCafe or Starbucks.
As you travel around Kamloops you will see this rule generally repeated, malls generally have empty spaces or large tenants, rather than gambling on small tenants. One look at half empty malls like Sahali, Lansdowne Village or Northhills exhibit this rule. But the landlords are not all to blame.
The other problem with malls, strip or otherwise, from the
lens of the small business, is that success in a mall depends on marketing:
Marketing is needed in order to attract customers to both know of you in the first
place, know what you offer and how to find you. Without national marketing dollars,
this is really hard to achieve. While walking Victoria Street, window displays
will show what is inside, and the name of your business hardly matters – if it
looks good to someone, they just walk on in. Conversely no one just happens by
a store front in a stripmall to see what is inside. For this reason, stripmalls
rarely have windows at all – and if they do, posters with the largest possible
writing in order to be seen by a speeding car or person a hundred meters across
the parking lot fills the windows rather than a display of the things sold inside.
Victoria Street:
What does this mean? Malls are hostile and challenging places for local businesses generally and essentially impossible for fledgling entrepreneurs with little to no capital, credit, references or experience. Some local shops do succeed in Stripmalls, but the cases are rare and unique, not the rule.
What I want to highlight is how our own City of Kamloops
Bylaws and Codes make building stripmalls easy and cheap to build – while the
type of small retailer described in the Meme, and the sort of building required
to house them is difficult and prohibitively expensive to create. Indeed, our Official
Community Plans dating right back to 1990 explicitly concur that we should be
building small, incremental, infill, mixed use, walkable commercial districts –
instead we continue to create new stripmalls – while infill remains at best problematic and expensive – and in general
illegal.
Check out the Cover Page of the 1990 OCP. Ironic is it not,
that in the 31 years since we identified this street scene as desirable, we
made it more and more illegal, and at the same time built more new Strip Mall Square
Footage than existed in the 40 post war years before 1990?
As a further irony, the City re-used this same image as the
Cover Page for the 1997 OCP as well.
Let me demonstrate. Each of the follow criteria are the
phrasing in the zoning code for any of the zones in town, residential or commercial,
regardless of where they are;
Here is a short list of what I believe to be a series of successful local businesses in town;
All of these businesses are in buildings which
were built before Kamloops had any zoning ordinances of any kind. All of them
have setbacks of ZERO – indicating that perhaps a minimum distance from the
street does not better business make.
All of these buildings cover nearly all of their lots. While
these buildings are all of different heights from just a single story to many –
that aspect of their construction was never regulated in their time. The
maximum height was set by the viability of the project and the capital and risk
of their builders/landlords. Like the businesses within the buildings, the builder
and landlords themselves could be small businesses, financing the size of
building that they could afford. In the case of a business like Hello Toast, the
humble building is a simple, rectangular, single story box containing only two
businesses. The original landlord of this building built a simple, rentable
building at a small local scale.
Next, Parking Minimums have one of the most profound effects
on what gets built on a lot, stripmall vs. pedestrian oriented, start-up-friendly
building. For example, a business pays to rent and maintain parking that does
not directly produce revenue for the business. Businesses like the Noble Pig,
one of the largest and most successful restaurants in the City has no parking
for customers or staff – and in the meantime boarded up (before Covid even
arrived) restaurants like Montana’s, Milestones, Tony Roma’s and others, continue
to sit vacant surrounded by seas of parking. Moving the parking underground
drives the cost from a few thousand dollars per stall, to many tens of thousands
per stall, likely more than was spent on opening the business itself – so parking
underneath does not start-up business make.
On top of the private costs of parking to businesses, these seas
of parking also have public costs. They generate storm run off for our sewers,
heat islands of asphalt, highway sized lamp posts obscuring the stars with monolithic
light pollution, expensive signalized intersections on broad, high-speed arterial
streets, which actually carry few vehicles per hour than Tranquille, at slower
average speeds, generating pollutions and direct maintenance expenses for the
City. Just a single set of signals costs $500,000.
Not to mention, all that parking depresses those properties tax
value in comparison to urban – pre-zoning properties. Commercial properties are
valued on what they can generate for rent. For example, while the stripmall at
1055 Hillside Drives contains multiple vacant store fronts including Montanas,
few, if any, local investors or landlords can afford its $45,074,000 price tag,
and it pays tax on just $576 per Sq. M.
Meanwhile the Noble Pig and its attached medium-market motel
are owned locally, at an assessed value of $6,529,000 paying tax of $1,086 / Sq.
M – and Hello Toast is a measly $450,500 to buy in and pays tax of $1,196 / Sq.
M.
Buildings like Red Beard, Hello Toast, and all the businesses
mentioned earlier are not just locally owned business, and owned by local
landlords – they also pay roughly twice the amount of tax, on streets that cost
a fraction as much to the public purse. For a North Shore comparison – Lotus
Inn - $1,309 / Sq. M.
So what needs to change in commercial areas in order to actually
start achieving the goals of the 1990 and subsequent OCPs? Let’s Look back at
the earlier list:
·
Minimum Lot Size, Maximum Lot Coverage, Minimum
Set Backs, Maximum Heights, Maximum Floor Area Ratios, Minimum Parking Requirements,
Allowed Uses, Minimum Lane Width, Minimum Distance between Intersections
The first step is to delete every single one of these lines.
If someone can convince someone else to subdivide their lot into a tiny little
parcel, you get a building like The North Shore Barbers at 241 Tranquille,
which is illegal by all current zoning laws. So why a minimum lot size? Servicing
the lot is paid as a user fee, and the intensity of the development pays a
higher tax rate than strip malls. Its an economic win for the City and small opportunity
for the small vendor in your Meme. With an assessed value of just $71,900 this
is a low rung on the entrepreneurial ladder – and pays tax of $1,207 per Sq. M.
Parking Minimums? Leave it to the landlords and developers.
Joshua Knaak of Arpa Investments would be the first person to tell you he
couldn’t sell every Condo in one of his buildings without parking – but he doesn’t
need the City mandated 1.8 stalls per unit required. Probably somewhere closer
to 0.8-1.1. But that should be for the developer to decide. Downtown you might need even less parking, in Orchards Walk, probably more - but I think that the builder selling the unit, taking the risk, is going to make the safest investment for themselves.
When it comes to viability of local restaurants, capacity is
not determined by Fire or Building Codes – it is determined by Parking Stalls.
In infill situations like the North Shore, many restaurants could easily
increase their seating (revenue) but are not allowed based on parking stalls –
in the most residentially dense and walkable area of our City – its parking
that determines our Occupant Load. As people try to renovate buildings on the North
Shore to spruce them up, they are rarely able to navigate these issues, so instead
just let them continue to decay, because after all, currently they are “legally
non-conforming”.
Personally, if we really wanted to be successful in producing
fantastic, small, business friendly environments, we would follow the lead of
nearly every other developed country in the world, like Japan, China, Taiwan,
Singapore, England, Scotland, Ireland, Norway, Denmark, Germany, Austria, Italy,
Spain………. And instead flip to Maximum Lot Size, Minimum Lot Coverage, Maximum
Parking Stalls.
That is never going to happen in North America in my lifetime.
But in the meantime, lets make it easier for small local developers, builders,
would be artisans, retailers, greengrocers, butchers and heck, candlestick
makers to get their foot in the door by removing all the things that make the
very design charettes that the City routinely holds up as examples of how we
wish to live – instead of making those Charette dreams in actuality, illegal to
build.
Above; 2004 OCP “Visioning
2020” – what we want for our future, was illegal to build then, and is even
more illegal to build now.
Below: 2020 North
Shore Neighbourhood Design Charette generated through a public input process
lasting the last 3 years. Still illegal to build – narrow roads, no parking, no
set back, above height limits, over floor area ratios…
Plus, with small projects, you are hardly likely to get white elephants like Mission Hill sitting above Summit half finished for most
of a decade. Big bets do not mean prosperity or opportunity, or assured success.
Empty malls like Sahali and Northhills are just line items on corporate balance
sheets which are both tax roll, walkability and vibrancy deserts – all counter
to serving what our OCPs prescribe. A final illustration borrowed from a past blog
post:
Columbia Place, in my opinion the cities MOST successful
stripmall, with its literal acres of parking, would struggle to find local
ownership with its assessed values of $81,169,000. It houses just 65 Businesses.
In comparison the 300 block of Victoria Street, occupying 1/8th the
space, houses a similar number of businesses, with the addition of some
residences and College.
All of these high values, walkable, businesses owned by
local landlords, filled with local businesses, all do not conform to the modern-day
zoning codes. Those codes make it either too expensive, or just completely not
possible to build. While dozens of cities from Portland, to Sacremento, to Edmonton
have started the process to rid themselves of these aspects of their zoning
codes that are running contrary to our goals of local business, food security
and car independency – the following video sums all this up quite nicely into a
minute and a half. Since this time, Ottowa has eliminated Parking Requirements,
but it is yet to be seen what the next decade will bring for the City.
So, in summary, my feelings are we need to:
·
Eliminate Parking Requirements in every area of
the City so that landlords big and small can start making market and demand-based
decisions around their parking supply
o
No parking requirement means small buildings on
small lots are legal and viable
o
No parking requirement means that infill developments
like the Hive, Station, Huston Place, etc. are able to be designed around
people rather than cars
o
No parking requirement does not mean that no one
will building parking, they will only build as much as they need or desire
·
Eliminate Lot Coverage and Setbacks in all Urban
Zones (Downtown, East End, McDonald Park, Tranquille Market, John Tod, etc.)
·
Eliminate Minimum Lot Size
·
Relax Land Use regulations to make small, local,
neighbourhood friendly uses legal, by-right, in more areas, especially existing
Mixed Use one like Tranquille
o
Remember, the success of little small
neighbourhood businesses are successful because of their neighbourhood. Consider
when folks complain about “people” speeding through their neighbourhood, in fact,
those people are themselves. From their own area.
o
If someone opens a small shop in a residential
area, the people who are going to make that shop busy are the very people who
live in the area. Unlike large chain stores where people drive from all over to
fill the parking lots on major arterial roads. Little shops on quiet
residential corners with 15 seats, generate walking traffic of 15 people from
the area. Not thousands of people from all over the city. And further, that
little neighbourhood shop owner – they live right in your neighbourhood too,
and their kids play soccer with yours.
By Mitchell Forgie - mitchforgie@gmail.com
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