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Blight or Boom?: Rooftops essential to retail development

Blight or Boom?: Rooftops essential to retail development

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Warehousing and logistics have become the predominant industry near the Exit 44 interchange of Interstate 81 on the western end of Carlisle, and is continuing to spread westward as warehouses are starting to spring up near the next exit — Exit 37 near Newville.

Those opposing the proliferation of warehouses have raised retail development as a potential alternative, asking for more time to test the retail development waters as the country emerges from the recession that started in 2008. It was the initial plan for the property that is now being eyed by developer Goodman Birtcher in Carlisle Borough and Dickinson and South Middleton townships.

Property owner David Loring of Equiterra Properties marketed a portion of the property for commercial use and sought primarily retail development for the property since April 2006. The site, however, did not generate much attention from retailers, who did not see enough nearby residential development to spark their interest. Without interest from larger retailers, fast-food chains were also not interested in the property.

Even as Goodman Birtcher continues its plan to develop a warehouse on the property, there are still more areas in Cumberland County which could potentially be used for warehousing or retail.

So what does it take to attract major retailers to an area like Cumberland County?

Richard E. Jordan II, chief executive officer of the Camp Hill-based Smith Land & Improvement Corp., says,

“They’re looking for their payback.”

The larger retailers know the areas in which they should have a presence. They have access to such an extensive amount of research and demographics about the Midstate that they know as much about the area — if not more — than its residents.

“They will come when they think they can make money there,” Jordan said.

Retailers weigh a variety of factors as they consider their earnings potential for proposed locations during the site selection process.

Whole Foods, for example, looks at the availability and the cost of real estate, population density and the area’s interest in organic or natural foods, said Katie Malloy, spokeswoman for Whole Foods Market in the mid-Atlantic region. The closest Whole Foods Market to Cumberland County is located near Baltimore.

“No one factor is most important,” Malloy said. “Finding the right combination is what’s most important.”

Retailers have specific site-selection criteria that companies like Gibbs Planning Group, based in Michigan, cross-reference with available locations nationwide.

All retailers have different demographics they consider when they look at a particular site, but they all want to see high quality building standards, good signage, attractive streetscapes and walkable communities, said Robert Gibbs, of the Gibbs Planning Group. Retailers also like to be near a large institution, whether that be a civic user like a college or a library, or a commercial user like a hotel.

For many retailers, location means a top-line property with the right anchor tenant to encourage a blend of shops. Smith Land is the owner of the Silver Creek Plaza along the Carlisle Pike in Silver Spring Township, which is anchored by Toys R Us. Jordan said that isn’t the largest of anchors, but it is effective for that site, which now includes national retailers like Buffalo Wild Wings, Weight Watchers, Subway, Great Clips and Sprint, as well as locals like Neato Burrito, FROYOS and F&M Trust.

“There’s a blend that has to work for people to come there to spend their money,” he said.

Jordan said retailers are also looking at easy access to the site, the education level of the community and the site’s proximity to other retail stores.

Jordan’s company also owns the West Shore Plaza in Lemoyne. There, he said, people will come to the farmer’s market, then stop at Glenn Miller’s Western Prime Beef And Deli to buy meat before stopping at Karns or the Fine Wine & Good Spirits shop to finish their shopping.

“All these in the same proximity have made that area a destination to shop,” he said.

Retailers also look for residential development near a proposed location.

“Access to rooftops is important. People want the convenience of shopping close to home,” Jordan said.

In the past, retailers would build in a location, anticipating the completion of future residential developments nearby to provide those much-desired rooftops. The retailers “really got burned” when those developments fell through, Gibbs said, so now they actually want to count rooftops near a proposed retail site.

Retailers tend to follow what Gibbs called a 50/50/50 rule, meaning the location puts the retailer in view of 50,000 cars per day, 50,000 people and a $50,000 average income. If two of the three exist, a location may be considered.

Even that old rule of thumb is undergoing a shift as retailers are starting to favor disposable income per acre over average income in a community. Gibbs said that could mean that in a more urban setting, there would be six to eight households in an acre making less than $50,000 per year, which have more disposable income than does an acre in the suburbs in which there are two households earning more than $50,000 per year.

In addition to having a higher disposable income, these urban areas are more walkable and under-retailed, Gibbs said. “They just don’t count on the suburbs to grow anymore,” he said.

That means companies will be looking to areas such as the former industrial sites included in the Carlisle Urban Redevelopment Plan rather than centers off the interstate. Even major retailers such as Target and Walmart are building stores as small as 18,000-square-feet that would fit into an urban setting.

They will, however, go to the shopping centers near interstates if they want to be in a community, but can’t find the right space downtown.

Whether locations are along an established road or in town, the Midstate has potential to see retail development in the next few years. Some of the larger retailers have established themselves in the primary markets around larger cities, and are now looking at the secondary and tertiary markets that would include the Midstate, Jordan said.

Like other segments of the economy, the retail sector quieted in the last few years, but it will be the leader as the economy improves. Jordan recently attended the International Council of Shopping Centers convention in Las Vegas, the largest collection of developers, retailers and brokers in the country. Larger developers were there, he said, and were notably active.

“We’re on the cusp of moving upward in the economy, and I think retail will lead the way,” he said.

The projected upward turn in retail development is just what frustrates opponents of the Goodman Birtcher warehouse who wanted to see additional effort at retail development before turning to more warehousing.

“When Loring tried to market it, we were in an economical freefall,” said Dan Wyrick, a member of the Dickinson Township planning commission. “It’s disingenuous to say I marketed it and couldn’t get any traction.”

In March, Dickinson Township supervisors approved a change in the zoning of both Loring’s land and an adjoining farm from business-residential to business-industrial. The move countered the recommendation of the township’s planning commission, which voted unanimously against recommending the plan. With the change, the opportunity for retail development near the interstate is gone.

“This was really the last access we had from 81 to get into that ground and develop retail development,” Wyrick said.


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