Near the half-million dollar houses are a trailer park and a short-sheet motel. A couple blocks away, tidy, comfortable homes sit behind neatly manicured lawns in the shadows of two tough-looking apartment complexes with security gates and iron fences.
Yet midway between the two is perhaps the biggest retail project in the history of that part of town – a 20-acre, multi-million dollar deal that will bring in several national chains and a host of smaller stores. That this neighborhood doesn’t fit neatly into the template national and regional retailers usually use to pick locations is not an excuse this time, but an obstacle to overcome to reach the area’s desirable and affluent, though decidedly urban, residents.
And what makes this project even more intriguing is that the retail center is not near Old Lake Highlands, the L Streets, or the White Rock neighborhood, but in Oak Cliff on Forth Worth Avenue, at the former home of the Bronco Bowl.
Which raises the question of “if there, why not here?” Have retailers and developers finally come to their senses and discovered that it’s possible to put high-quality retail in a neighborhood that isn’t Frisco?
Is it possible that the neighborhood’s increasing affluence and desirability will translate into more and varied stores and restaurants, meaning residents won’t have to drive west to Park Cities or north of LBJ to find quality retail?
The answer, the retail environment being what it is, is that it depends. Yes, the most important retailers in the country, from Wal-Mart on down, are beginning to realize that they need to do business in inner city areas, despite the gaps in their target demographics and the difficulty in acquiring land. That explains the influx of drug stores and home improvement centers, as well as the resurgence of Old Town at Lovers and Greenville, over the past couple of years.
And yes, Ray Washburne of Charter Holdings recently announced that he would sink a chunk of cash into renovating Kingsley Square, at Kingsley and Skillman, upgrading it to 140,000 square feet of what he terms a “boutique neighborhood center” anchored by a drug store and a new spot for Mi Cocina (see the September Advocate for more on this project).
But the larger retailers – the national and regional ones with a name-recognition factor – still want to do it on their own terms, which means Lake Highlands doesn’t always measure up, despite near heroic efforts by community groups and some brokers and developers. Hence, too many strip centers with dollar stores, convenience stores and fast food restaurants.
Our strip centers and shopping areas are too old and don’t meet today’s retail needs, which include bigger stores, fewer tenants and more visibility from the street. Equally as important, landlords and property owners (many, but not all, from elsewhere) don’t always have a financial incentive to renovate in order to attract better tenants, since they’re generating healthy cash flows from their current occupants.
Meanwhile, despite a lack of retail in the immediate area, Dallas remains one of the most over-stored parts of the country, say the experts, and we’re right in the middle of that excess. Complicating things further is that many potential sites are owned by more than one group of people, making the decision-making process that much more difficult.
“Retailers want to move into the inner city, and these days, that means everything below LBJ,” says Jimmy Christon, a developer who has worked extensively in Lake Highlands, including the renovation of the Northlake Center at Northwest Highway and Ferndale.
“The biggest problem is finding property for them. They’ll take a look at what you have, but if they can’t find a site at a price that makes sense for them, they won’t do it.”
WHAT DO RETAILERS WANT?
Retailers, and the developers and brokers who work with them, are a picky, fussy lot. They want a deal to be just right before they’ll do it, and to make the process even more exciting, they don’t like to discuss what it is that makes a deal just right. A variety of retailers and developers either declined to be interviewed for this story or did not return repeated phone calls.
Still, it’s possible to piece together what they’re looking for by talking to other retailers, consultants and the people who work with them. First and foremost is land, and lots of it, because stores are bigger than ever. Grocery stores aren’t 35,000 square feet anymore, but 60,000 square feet. A small department store like Ross needs 30,000 to 40,000 square feet, as do chain bookstores. Even a Starbucks can run as big as 8,000 square feet. And this doesn’t take into account the so-called big boxes like Wal-Mart, Target and Home Depot, which can be the size of three football fields.
Given those dimensions, too many Lake Highlands centers are just too small, says Susan Morgan, who chairs the economic development committee for the Lake Highlands Area Improvement Association.
“There’s just a mismatch between what retailers want and what we have,” she says. “This doesn’t mean we can’t attract them. It means we just have to try and find a way to do it.”
All retail discussions these days center around these kinds of national retailers because they’re pretty much the only ones left. Consolidation has devastated local and regional independents, whether in hardware, pets, books or clothing. One estimate says there are three-quarters fewer independent bookstores today than 30 years ago. In addition, national chains that specialized in smaller, local stores – Robert Hall, Dad & Lad, and Kinney Shoes – are mostly gone
Besides size, national retailers want visibility and to be near other national retailers, including and especially their competition. They want to be on major highways with lots of traffic and that are close to popular malls. Typical is the Bed Bath and Beyond center just northeast of NorthPark, says developers, which qualifies on every count – size, location, proximity and traffic.
Finally, national retailers look for specific demographics, a process that has become so sophisticated that it takes into account not just income, but family size, car ownership, population density and shopping habits. Retailers are so eager to get their exact demographics, says John Fox, who teaches at SMU and is a leading national authority on retailers, that they’ll even build stores in areas before the residents get there.
The West Village in Uptown, for example, was built on the assumption that the apartment and townhouse construction in the neighborhood would bring hip consumers who would patronize its hip stores and restaurants.
OVERCOMING OBSTACLES
This is not to say that similar sites don’t exist in Lake Highlands, or that our neighborhood doesn’t have the necessary demographics. There are, and it does, say brokers and developers. But given the size and layout of so many of the shopping centers, there are some high hurdles to clear, Morgan says.
Consider almost any shopping center in Lake Highlands, and it’s either too small for most national retailers, both in store size and total area, doesn’t have the required visibility, or suffers from some combination of these problems. In addition, many of them are what developers and brokers call “tweeners” – close enough to NorthPark and other larger shopping centers so that national retailers figure they don’t need another store in the area.
“Retail goes in cycles,” Morgan says, “and these days it’s of the big box variety. Every retailer wants the same thing – lots of square footage, high visibility, and to be clustered together. And once one of them goes up in a place, then they’ll all go up.”
There are several ways to approach these obstacles. Morgan’s economic development committee has worked with developers, brokers and retailers to push Lake Highlands’ attributes, and the group has had some success. She knows this, she says, because her phone calls are returned. Meanwhile, the Adopt-a-Corner program, which identified 15 retail areas, has reinforced the neighborhood’s commitment to local retailers.
A more long-range solution, Christon says, is to tear them down and start over, like his company did at Northlake Center, or to renovate, which is what happened at Town Creek at Royal and Abrams. Today, the center is almost full, complete with Walgreen’s, says Steve Music, who leases there.
“We knew we had an ugly duckling that needed to be enhanced,” he says. “And once we did that, then the retailers came to us. We didn’t have to do much marketing of Lake Highlands.”
The catch with teardown and renovation is that too many center owners aren’t interested in making that kind of investment, which can run into the millions of dollars. Their holdings are already profitable, so why spend money on something that may turn out to be less profitable? Or they may be absentee landlords, so the quality of the tenants doesn’t bother them quite as much as it does the neighborhood. Since these locations are so profitable, they’re unwilling to sell them unless they can get top dollar. The Bronco Bowl site, for example, went for a reported $6 million.
All of which means that the future of retail development in our neighborhood will likely remain uncertain. What has changed, though, is that momentum has apparently shifted. And for anyone who lives here, that’s almost good enough news all by itself.
