Retail forced into the margins

Steep rents at area malls drive off small businesses

`There's a big demand'

Owners setting up shop in office, industrial space


November 10, 2003|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Dan Riker uses neon signs located behind reflective windows to attract customers to his bookstore. Katharine S. Gobbel flies flags and covers her windows with posters of sunbathers reclining on beaches, and Randall Brigs has signs along Route 108, pointing the way to his laser tag center.

Such efforts to grab a customer's attention are not remarkable, but for these retailers, they are far more important than for most because they are located in office and industrial complexes rather than more expensive commercial strips.

Demand for the limited retail space in Columbia is so high, finding a spot in office and industrial parks has become a common practice for small business owners attempting to establish a location in the coveted Columbia ZIP code.

Despite lingering economic uncertainties, national retailers are expanding in the Washington-Baltimore region, driving up costs in prime retail centers leaving small-business owners seeking to lure customers to their locations in the quiet mazes of suburban industrial parks.

Nowhere is that more apparent than in Columbia, where retail space is so limited that new developments are leased to national tenants before they are built.

"All I do is retail, and I don't try to do things in Columbia because it's just so difficult," said Dicky Darrell, a retail broker for Manekin LLC. "It's gotten worse. There are more people who would like to be in the Columbia area. The combination of more people wanting [in] and the fact that nothing's been zoned [for new retail] exacerbates that situation of trying to find something."

The biggest retailer in the world, Wal-Mart, only this year leased a building in Columbia, despite the fact that Target took two prime positions over the years. And Starbucks, known for its collection of prime, highly visible retail real estate throughout the country, only found locations for its outlets in Columbia in the past three years.

That retailers of that caliber wait patiently to enter this market sends a strong message to small retailers like Riker, and a look around light industrial complexes in the area makes the message even clearer.

"These office parks are rapidly becoming retail centers," Riker said, noting that he is often asked by customers with small businesses if they can rent a small portion of his bookstore for their startup ventures.

"No small business can pay $100 per square foot for the mall - it's only the chains that can afford that," he said. "All the village centers are full. The strip centers around here are full. There's a big demand for space."

Columbia's primary retail centers are the mall, eight village centers, Dobbin Center and Snowden Square, and two Columbia Crossings projects. Three of those spots cater to big-box retailers. And rent is a minimum of $30 per square foot and climbing, thanks to expansion pressure from national chains.

And while Howard County is in the middle of a comprehensive rezoning, a process undertaken once a decade to change zoning designations and regulations, there are no plans to create more retail space in Columbia where land is primarily controlled by the Rouse Co. and Kimco Realty.

For smaller business owners, claiming the Columbia ZIP code often means parking themselves in an industrial center, where one must contend with the county's stringent rules prohibiting many types of signs that might help customers find them. But the rent is generally about a third of what they would pay for a retail-zoned spot.

"[At] $36 per square foot, you can't survive [with] a new business," said Pinak Shah, who recently opened an Indian grocery store and distribution center in a park off Route 108. He flew a banner above his new Desi Bazaar for about a month before he was ordered to take it down.

So many quasi-retail shops have congregated in his complex - from gym and dance studios to churches and child care - that it has become a de facto family center. Shah said his customers often are parents who have dropped their child off for lessons at one of the nearby businesses. Even though he can't have signs, his proximity to the other centers has helped create a fairly steady traffic flow for a store about 2 months old.

"In the middle of nowhere, we've found [a] customer base ... [of] 345 in one month," he said.

According to Steven M. Johns, a planning supervisor with the county's Department of Planning and Zoning, the retail-style stores that are finding their way into industrial parks aren't likely to be pursued by the county unless area businesses complain. But he said the reuse of those parks - from straight office/industrial to quasi-retail - may reflect Columbia's development, and a shift in where businesses want to be located.

"It used to be that the county really wanted employment uses, like office uses [in those spaces] for tax base reasons," he said. "But I think it's fairly natural to see some of those older industrial centers [shift] to uses that have some retail component."

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