City ripe for retail rebirth, study says

Demographic shift makes downtown Baltimore prime spot for big chains

October 19, 2005|By JILL ROSEN | JILL ROSEN,SUN REPORTER

Old Navy? Bed Bath & Beyond? Pottery Barn? By bypassing Baltimore, you national retail chains might be missing out.

Downtown Baltimore has the population and the ready cash to make it one of the country's top 10 retail markets, according to a new study.

A retail assessment commissioned by the city and area development organizations shows the wealthy, waterfront parts of town boast demographics that rival established urban markets such as Philadelphia, Boston and Washington.

"I was surprised," Downtown Partnership President Kirby Fowler said of the results. "I go to New York, Philadelphia, Boston and D.C., and I'm always very jealous of the retail they have. ... We finally have a chance."

If Baltimore is indeed on the cusp of a retail wave, it would be welcome news for residents long used to the idea that a need for housewares or toys meant a trip beyond the Beltway.

It wasn't always that way. Once downtown Baltimore was the place to shop, with department stores such as the Hecht Co., Hochschild Kohn, Hutzler's and Stewart's forming a shopper's paradise on Howard Street.

Now downtown Baltimore has a small mall, the Gallery at Harborplace, and a smattering of other shops and restaurants, but the city's selection is dwarfed by Towson, Columbia and White Marsh -- all of which are crowded with national chain department stores.

Baltimore's new demographics have come at a fortuitous time, retail experts say.

Though for years desirable stores snubbed inner cities for richer suburban enclaves, things are changing. Suburbs across the country are becoming saturated with stores, just as downtowns are become increasingly attractive places to live.

National chains are giving cities a second look.

"There certainly has been that flip of mentality," said Patrice Duker, spokeswoman for the International Council of Shopping Centers. "A lot of retailers are saying, `Wait a minute, there are people in these areas with disposable income.' "

Baltimore's study, completed by Brad McDearman, a local economic development consultant, found that there were enough people with spending money living within a 1-mile radius of downtown to whet the appetite of the average national chain.

According to the study, a circle of that size drawn from the intersection of Pratt and Light streets in the Inner Harbor would include:

More than 36,000 residents.

More than 3,100 households with median incomes of at least $75,000..

An area with a population growth rate of 7.58 percent from 1990-2000.

"Baltimore is probably one of the 10 or 12 strongest downtowns in the country," McDearman said. "It's got the demographics, but it needs to package and sell itself much better."

The Downtown Partnership, along with the Baltimore Development Corp., the Charles Street Development Corp. and the city's planning department, have vowed to come up with a sales strategy highlighting the findings.

Baltimore will have an arsenal of sales materials before the next International Council of Shopping Centers conference, Fowler said. The events have become intense recruiting sites, with municipalities fiercely courting national retailers such as Starbucks and Nordstrom.

Nearly 50 cities had booths at the last conference, Duker said.

Fowler talked of trumpeting the study results in a banner over Baltimore's table.

"Our demographics are strong, why aren't you here?" Fowler said, spinning out an idea. "I'll get my creative types to come up with something better."

Though demographics are critical to luring the big brand stores, they're not the only consideration, industry experts say.

Assuming you pass the customer base requirements, the questions then turn to finances, said Daniel Butler, the National Retail Federation's vice president for merchandising and retail operations.

How much will it cost to open and operate a store? How high are taxes? Is insurance expensive? And -- the big one, Butler said -- will there be incentives?

Though McDearman's study found little justification for offering incentives, Butler said it's the little extras that can make or break a deal.

Typical municipal incentives can include giving retailers money for infrastructure improvements, tax relief, utility rebates, and permit and fee waivers.

"It can be the tipping point," Butler said.

But Fowler doesn't think Baltimore needs to do any arm-twisting. Best Buy, Super Fresh, Office Depot and Starbucks all headed here without needing an extra nudge, he points out.

More important, he said, is for the city to work with developers to persuade them to include more retail spaces in their projects and to make downtown a more attractive destination.

That means, Fowler said, softening five-lane Pratt Street into a greener, more strollable boulevard -- likely an expensive and complicated project.

"Hopefully, people will buy into it," he said. "Getting rid of five lanes of traffic is important to improving the street life."

In the meantime, he looks forward to facing retailers with his new demographic evidence.

He figures companies that took Baltimore seriously before, places such as Alamo Drafthouse Cinemas, House of Blues, Starbucks and Nordstrom, might now be convinced.

"Some of them have figured it out," Fowler said. "Others will figure it out as we spread the word."

jill.rosen@baltsun.com

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