Wednesday, July 20, 2016

2010 Moser, Mayer, Phoenix Associates Greensboro Downtown Economic Development Strategy Returns

A few years ago I linked to the 2010 Moser, Mayer, Phoenix Associates Greensboro Downtown Economic Development Strategy which was posted on Action Greensboro's website as evidence of why Downtown Greensboro has struggled for so long. The nice folks at Action Greensboro almost immediately removed the study from their website.

But being that the City of Greensboro is also party to the study and helped to finance the study I recently forced the City to place the study online in reply to a recent Public Information Request. I think downtown business owners are going to find Page 38 to be of particular interest:
"Despite demand retail growth has been slow Despite the fact that downtown is attracting significant spending from visitors and a growing residential base, businesses have trouble staying open. Assuming an industry standard of 10% rent‐to‐sales ratio for successful retail, a business would need to generate $420,000 in annual sales in a typical downtown space of 3,000 SF with $14/SF rent. Local market data suggests that retailers in downtown Greensboro are achieving a lower sales volume, and spending closer to 25% of sales on rent. High start‐up costs compound already tight operating margins and impede the success of many storefront retail businesses. Downtown’s retail is currently approximately 15% vacant along Elm St, and anecdotal evidence suggests that many businesses do not survive the first year of operation.

Poor building conditions are the greatest economic barrier to the success of new retail. Many buildings in Greensboro were constructed in the early/mid‐1900s and are in need of major renovations. The cost of rehabilitating ground floor spaces and creating a “vanilla box” for retail use will range from $40‐$80 per square foot depending on the building’s condition and original design. This either drives rents higher or creates an extra upfront burden for the tenant. Many buildings have likely remained vacant because owners are unwilling to undertake the upgrade cost on a speculative basis."

And this one:

“Retail rents cannot fully support the cost of rehabilitating blighted buildings… Absent financial intervention, storefronts will remain vacant or will attract tenants of marginal quality and with a high probability of failure.”

And the link Action Greensboro/the Greensboro Partnership took down:

You see folks, I was telling you the truth in 2013 while Nancy Hoffman, the N&R and the rest of Mayor Vaughan's cronies continue to lie to you today.