Life Around Dupont Circle Takes a New Turn

Rents Doubled

The factors in play in Dupont are the same ones bringing national retailers and restaurants to urban neighborhoods across the country. In the common pattern, a funky, offbeat neighborhood becomes trendy. Wealthier people move in. Chain retail follows.

"You've got neighborhoods that have been brought back to life because of the investment and hard work of independent businesses, and once those neighborhoods attract a certain popularity the chains come in," said Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance, an advocacy group. "If it's a hip neighborhood, the ability to associate your brand with the vibe and authenticity of the area can be very appealing."

That's what brought Johnny Rockets -- a hamburger chain usually found in suburban malls and tourist destinations -- to Dupont last month. "We can't beat Dupont for brand recognition," said district manager Micheal Williams. For many chains, urban neighborhoods are the last frontier. The suburbs where they started are saturated with stores. As the chains ran out of suburban sites, they realized that the demographics of many urban neighborhoods had shifted drastically.

Household income in Dupont Circle was once below the District average. But from 1990 to 2006, typical household income in Dupont, adjusted for inflation, rose from $46,000 to nearly $60,000, according to figures from Environmental Systems Research Institute. The average home value, adjusted for inflation, rose from $493,000 to about $582,000.

Dupont has remained an evening and weekend destination for dining, drinking and shopping for many who live and work elsewhere, especially young adults and gay people.

Meanwhile, office space in the neighborhood has expanded as older buildings were converted. With more office workers during the day, and more disposable income and wealth in Dupont at all hours, the chains' customer base has expanded. Dupont used to get most of its foot traffic on nights and weekends, real-estate agents said, but now it is an all-hours retail district.

Several of the big Dupont Circle landlords did not return phone calls regarding their activities in the neighborhood. Those who did said they had made efforts to accommodate local merchants.

"I prefer the local tenants because they keep the flair and the charm of Dupont Circle," said Michael Kain, who has owned property in the area since 1976. Most of his tenants are locals, but he also has Ann Taylor Loft, one of the biggest and most visible chain stores along Connecticut Avenue.

Halligan, of the Dupont Circle Citizens Association, said much of the decision-making is driven not by sentiment but by dollar signs.

"Chains think, 'What can this do for me?'" he said. "And the person renting is thinking, 'How much money can I make?'"

Defending the Chains

In some of the leases on mid-size shops that are expiring, brokers said, rents are less than $3,000 a month. Rents on newly signed leases for the same amount of space run from $6,000 to $12,000 a month, depending on the location. With their heavy foot traffic, chain stores can usually pay those rents.

"If you want to get frustrated at the local guy not wanting to pay the rent, get frustrated at him not being able to get his act together and compete," said Bill Miller, a senior vice president at Transwestern Commercial Services, a realty firm.