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The Future of the Strip: Downhill

Edward T. McMahon / Feb 04 2011

For Release Sunday, February 6, 2011
Citiwire.net

Edward T. McMahonFor more than 50 years retailers have favored the commercial strip: a linear pattern of retail businesses strung along major roadways characterized by massive parking lots, big signs, box-like buildings and a total dependence on automobiles for access and circulation.

For years planners have tried to contain and improve the strip. Now they are getting help from consumers and the marketplace. The era of strip development is coming to an end. Evolving consumer behavior, changing demographics, high priced gasoline, internet shopping — are all pointing to a new paradigm for commercial development.

Commercial strips are not going to disappear overnight. But it is becoming increasingly clear that strip retail is retail for the last century. The future belongs to town centers, main streets and mixed use development. Here is why:

We’re overbuilt on the strip

From 1960 to 2000 there was an almost 10-fold increase in U.S. retail space, from four to 38 square feet per person. For many years retail space was growing five to six times faster than retail sales. Most of this space came in the form of discount superstores on the suburban strip.

The recession proved that we have too much retail. Strip centers are now littered with vacant stores. By some estimates, there is currently over 1 billion square feet of vacant retail space, much of which has to be re-purposed or demolished.

Retail is moving back to the city

Wal-Mart in late 2010 announced plans for its first-ever stores in Washington D.C. To make the new stores fit an urban environment, the company has agreed to consider an array of new layouts, designs and parking arrangements.

The store planned for New Jersey Avenue illustrates Wal-Mart’s new approach. The company plans a store of 75,000 to 80,000 square feet (much smaller than usual) on the ground floor of a five story mixed use building featuring 315 apartments, underground parking and space for small retail stores.

At the same time that Wal-Mart and Target are planning new urban stores all over America, as many as 400 former big box stores sit vacant on commercial strips. Most analysts agree that urban neighborhoods are the new frontier for retail: the one place left with more spending power than stores to spend it in.

Traffic congestion, fuel prices and design are problems for the strip

Americans value convenience but the perceived convenience of the strip has been reduced as traffic congestion has worsened in recent years. Add to this rising fuel prices and an overall physical environment designed for cars, instead of people, and it’s understandable why fewer people want to shop the strip and almost no one wants to linger.

Town centers and Main streets provide a “place-making dividend” that the homogenous blur of the strip can’t match. They also provide a “park once” environment that will grow in importance if fuel prices rise. Just imagine, what happens to strip development if gas prices hit $5.00 a gallon or more, as some analysts predict.

The economy is restructuring the retail landscape

The recession saw the collapse of numerous big box chains, like Circuit City and Linen’s N’ Things. This helped send vacancy rates soaring. After three years on the brink, consumer confidence has improved but we can expect a new normal when it comes to retail spending. Why? Because, unemployment remains high, the days of unlimited credit are over, and many analysts predict that a “new consumer frugality” will be the norm for years to come. What’s more, strip centers without anchors (like grocery stores) and Class B malls are virtually unfinanceable according to many experts.

We’re also moving into an era of hybrid shopping centers. Big boxes are moving into the mall and many malls will more closely resemble old fashioned main streets. Already seven of the 13 regional malls in the Denver metropolitan area have — like Belmar in Lakewood, Colorado — been turned into mixed use town centers.

Time constrained lifestyles and boredom with the dull sameness of most strip centers has meant a slow, but steady decline in the number and length of stays at strip malls. People go to get what they want and they leave. A pleasant (i.e. cool) atmosphere is particularly important to the GenY generation. A mixed-use town center with street life, outdoor dining, places to hangout and window shop is much more likely to attract the affection and the dollars of young shoppers than an auto dependent strip.

E-Commerce means fewer and smaller stores

Today, the nation’s “healthiest” retailer is not Wal-Mart or Costco. It is Amazon. Amazon has exploited the increasing availability of broadband internet and mobile technology to build a retail superpower. One of the biggest reasons why the strip is coming to an end is because bricks-and-mortar stores are becoming a smaller part of the retail landscape.

First, it was catalog shopping; now it is e-commerce, social media and mobile phones. This means that retailers will seek smaller footprints as merchandise categories move to on-line channels. For example, the rise of Netflix and streaming video means the end of bricks-and motor video stores. E-readers portend the end or at least the downsizing of bookstores; ditto for music stores, Hallmark card stores and other merchandise categories.

None of this is meant to suggest that we won’t still have neighbor centers with grocery stores, drugstores, coffee shops, etc. We will. But the endless expansion of the commercial strip — that homogenous blob of, sign clutter and asphalt that leads out from every town — is reaching the end of its useful life. A new paradigm is being shaped, not just by regulation but by consumers and the marketplace. Commercial strips (i.e. road towns) with no beginning and no end, with no center and no way to get around except by car, are becoming obsolete in an era of shrinking stores, rising gas prices, discerning consumers and online shopping.


Edward T. McMahon is a senior resident fellow at the Urban Land Institute and the Charles E. Fraser Chair for Sustainable Development and Environmental Policy.

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10 Comments

  1. Pamela Miles
    Posted February 4, 2011 at 11:19 am | Permalink

    Great news for my beautiful downtown Ridgefield, CT! Love to grab a cuppa tea and stroll the street with my sweetie on a lazy Sunday morning…

  2. Posted February 4, 2011 at 2:39 pm | Permalink

    Richard P. Horwitz wrote a book called, “The Strip: An American Place” (1985) which examined a particular locale along a highway access road near exit 242 on I-80 in Coraville, Iowa between 1978 and 1982. He showed how back then, a strip development struggled with some the very issues outlined here, but in nascent form (online retailers, for example, were not an issue back then). In a way, it was the social relationships of the workers which Horowitz saw as driving the atmosphere of the strip–along with an astonishing lack of awareness of the auto-dependent nature of the strip. (My review of his book is at http://www.december.com/places/people/horwitz1985.html).

    As long as there is an obsession for free parking and serving automobiles first and foremost, retail doesn’t seem like it will survive at all. I have ceased going out to the burbs for any of the needs that I can’t get within walking distance of my apartment, and I don’t plan to change that. I prefer shopping online now almost everything, and I resent going to areas that are not tuned to pedestrian circulation and where cars are king.

  3. Bill Brinton
    Posted February 5, 2011 at 6:54 am | Permalink

    Excellent observations. I hope that there will be more of Mr. McMahon’s work published in the future in Citiwire, especially his recommendations to battle highway spam and the ubiquitous billboard lobby.

  4. Linda Guthrie
    Posted February 7, 2011 at 2:23 am | Permalink

    In a quick look backwards, l’ll share Matthew Dalleck’s words in US News on Feb 5, 2009 about the role that Eisenhower’s highway legislation played in creating the strip mall, ” It (highway legislation) increased the homogeneity of life in the United States, giving rise to 40,000 miles of pavement, contributing to the ubiquity of strip malls, fast-food restaurants, and all-too-familiar chain retail stores that dot the highways of virtually every state. His legislation also led to a loss of architectural and physical diversity in the nation’s towns and cities. By electing to devote so much money to highway building, Eisenhower shortchanged public transit……” Let’s hope that whatever the plan for restoring the nation’s infrastructure, that the resulting impact on our lives isn’t regressive by redirecting us away from our new and growing fondness for the”drive less, enjoy more” life.

  5. Posted February 7, 2011 at 4:21 pm | Permalink

    I think this is really what is happening already. I moved to a smaller city after having lived in big cities all my life, and there is a lot of movement to our downtown center in Staunton, VA. It’s an exciting time. I love living here because of it. There’s even a website called http://www.lovethelocalvibe.com/ showcasing all the culture in town.
    Great article.

  6. Posted February 8, 2011 at 8:11 am | Permalink

    Except the majority of “main street town centers” are little more than strip centers in drag. I wrote about these for D Magazine recently:

    http://www.dmagazine.com/Home/D_Magazine/2011/January/How_the_Villages_at_Allen_and_Fairview_Got_It_All_Wrong.aspx

  7. Linda Guthrie
    Posted February 9, 2011 at 11:54 am | Permalink

    Patrick, perhaps not the majority. As a Texan, displaced to New England in my teens, I find New England town centers to be totally the opposite of most Texas towns, which don’t so much have centers as they have super wide mixed-use Main streets. The typical New England town center is an intimate space by comparison, where people can and often do spend time if the sidewalks are maintained and wide enough to include cafe tables and store front benches. Gentrification and revitalization of old mill buildings brought a proliferation of small retailers to fill the void left by department store-sized retailers that either died out or moved out of town to a big shopping mall. Newburyport, MA Where I live, is an example. By comparison, the chain stores are up at the strip malls near the highway on-off ramps along with the grocery stores. Our downtown revitalization was initiated by the same group that led the redevelopment of Faneuil Hall in Boston (Gordon Hall) and is peppered with teeny tiny retailers and local commercial establishments like banks, insurance companies, lawyers, etc. Our downtown mall is a few blocks from downtown, housed in a collection of refurbished tannery buildings covered with solar panels and is full of small retailers and entrepreneur’s offices. The only chains we have downtown are a Talbots housed in an old movie theater and a small Starbucks. Not too many Texas towns are like this, although there are some. Many New England town are similar to this – although I know Newburyport to be exceptional in this way. We’ve attracted the dreaded developer who homogenized Nantucket’s style. He has bought up considerable riverside property to develop at some point in the future. What he might do is more than a little scary – but I see the trends discussed in this article in full play in Newburyport.

  8. Matt King
    Posted February 14, 2011 at 10:11 am | Permalink

    I was a resident of Boston from 1986 to 1988 because of my specific interenst in urbanism and adaptive reuse. I returned to my home of Tulsa, Oklahoma only to find that there was very little interest in urbanism and saving our fantastic collection of Art Deco structures since land is plentiful and the city expanded based on the automobile so for many years urbanism had no role here. Like so many other communities, the strip center has overpopulated this community and I am one who is grateful for it’s demise. Our core, which is still the heart of Tulsa is over 60% surface parking as businesses migrated away from the core for greener pastures, literally. Only recently has the community made great strides in understanding what urbanism is, its significance and how to impliment it. The challenge will always be that Oklahoma is a property rights state and the attitude of folks who will fight for thier right to do what they wish with thier property. However recent re-investment, and a push to educate have resulted in an explosion of redevelopment in the core of Tulsa. This is certainly a very posotive move, but I am very concerned about what I am seeing in this part of the country relative to the reinventing of our downtowns. I see an attempt to recreate a downtown that reflects our values pror to the significance of the automobile and our ability to be mobile. I see that the architecture and planning is certainly more pedestrian friendly in terms of space, scale and texture, but we are seeing an extensive use of what I call “disposable building products”, which stem from the era of “disposable architecture” similar to what WalMart has done. Many of these products are not designed for long term and will result in constant maintenenance or blight. It has become more and more difficult to find developers who go beyond the bottom line and are in it to leave thier legacy.

  9. steve p
    Posted February 16, 2011 at 10:50 am | Permalink

    To follow up on this trend, look into ‘entrepreneurbia’. Where entrepreneurs go into suburbia and buy up cheap retail buildings and change their use. One trend I expect is to convert them into senior citizen centers, libraries, rec.centers, etc. They typically are on travelled streets, have abundant parking space, and very important ; THEY ARE CHEAP.

  10. Posted February 16, 2011 at 11:49 am | Permalink

    I just rode out to Belmar from my inner-city Denver home this Sunday afternoon because it’s easier to get there on weekends by public transit than other shopping. Combining that with a good walking environment makes the perfect combination. The bus was almost full till it got to Belmar. West of there, it continues with a handful of passengers into a seemingly endless strip.

    Similarly, Englewood Station on the RTD (Denver area) Light Rail lines is the biggest suburban stop on weekends because it has a walkable “Main Street” atmosphere that draws inner city residents.

    Most other shopping areas in metro Denver are accessible by transit on weekends, but are pretty depressing as a pedestrian. Both things are needed: convenient service AND a good walk environment. Given those things, people respond. The most interesting thing is that places like Belmar and Englewood have done this while still providing parking choices, too.