From the Ground Up
In Columbia Heights, Room for the Little Guys
Monday, October 1, 2007; Page D01
The shells for what will be some of the biggest big-box retailers Columbia Heights has ever known are rising along 14th and Irving streets and Park Road NW. They include Target, Best Buy, and Bed Bath & Beyond.
Yet below these retail giants, space has been reserved for the little guys.
A Peruvian restaurant has signed a lease, as has a local African American franchiser of the Quizno's sandwich chain. A Vietnamese grocer is negotiating to bring a Pho restaurant to the development. A locally owned spa may also come.
The $149.5 million DC USA project is being developed by Grid Properties of New York. President Drew Greenwald said the firm will reserve 15,000 square feet, or about 11 percent, of ground-floor retail space for local and minority-owned businesses, under an agreement with the District to buy and develop the land. He will reduce rents by 30 percent to encourage smaller tenants.
"With all the projects, it is going to be a nice mix," Greenwald said. "It kind of has a little bit of everything."
Throughout the District, developers are carving out space for locally owned or small businesses. While small businesses tend to be riskier bets than their better-financed corporate counterparts are, mixing local and national retailers is a goal of city officials when selling or leasing public land.
Mayor Adrian M. Fenty has made these set-asides for small and local businesses a priority in many negotiations with developers who seek to build on public land.
At the site of the former convention center on New York Avenue and Ninth Street NW, the city has struck one of the biggest of such agreements. The development team of Hines and Archstone-Smith has agreed to set aside 82,500 square feet, or 30 percent, of retail space for local or "unique shops." It defines unique shops as operating fewer than six locations nationally. The development team will adjust rents accordingly to meet the mandate, said Howard J. Riker, a vice president in Hines's Washington office.
"Local doesn't necessarily mean small or local doesn't mean new; it doesn't necessarily mean 'put at a disadvantage,' " Riker said. "The way that we will approach the leasing is that we want to make sure that all the retail tenants will succeed."
Yet questions remain as to whether small and local businesses can compete in an environment of national brands.
"We may want to support the little guy in the neighborhood, but if his coffee doesn't taste as good as Starbucks, if his clothes fall apart when you wear them or his furniture is out of fashion, are you going to go his store? You're not," said John A. Asadoorian, founder of Asadoorian Retail Solutions, a District brokerage firm.
Asadoorian added, "They should be viable businesses, and if they are viable, the property owners will want to put them in their projects anyway."