Mayor Barry and his advisers deserve an "A" for effort in trying to keep Hecht's department store in downtown Washington.
But the Barry administration ought to reconsider its plan to assist the retailer in terms of an overall policy rather than applying a hastily drawn solution to a perceived economic problem.
The Hecht Co., which is a division of the May Co. of St. Louis, finds itself practically isolated from the central retail core while blight has all but wiped out what had been a thriving commercial area around 7th and F streets NW. Indeed, the Hecht store itself is in need of extensive renovation or replacement.
Thus, the company has made it clear for some time that it will have to find another downtown location.
Concerned about the possible loss of retail sales, taxes and jobs to the suburbs if the Hecht Co. closes its downtown store, the mayor has quietly promised the company a Christmas wish list of incentives to remain in the city.
Offering inducements such as industrial-revenue-bond financing to retain and attract business has become an acceptable practice among municipalities, counties and states. But given the current situation, the mayor is acting on unsound advice or overreacting or both.
The entire plan to entice the Hecht Co. to stay downtown is based on the notion that, unless the retailer can build a new store at 12th and G streets NW (Metro Center), its only alternative is to abandon the city.
"I realize that a timely relocation of Hecht's to the Metro Center redevelopment project is essential for its remaining a downtown retailer," the mayor said in a letter to the May Co.
That's a fairly myopic assessment of the Hecht Co.'s needs as well as its choices of action.
As reported by Deputy Business & Finance Editor Jerry Knight in his Monday Morning column this week, the mayor has pledged to keep the Hecht Co. downtown by offering to support low-cost financing for construction on the store's existing site as well as a new one at Metro Center. Moreover, the mayor said he would consider widening 6th Street NW and changing height limits to permit construction of a 130-foot building on the present site.
What city and Hecht Co. officials seem to be saying is that the only viable site for a new department store is at Metro Center, on city-owned property. But what if the Metro Center property remains tied up for years in litigation between the city's redevelopment land agency and developer Oliver T. Carr?
Although it may make economic sense to assist the Hecht Co. to some degree, this, in effect, would reward the retailer for complacency and lack of planning and imagination over the past 10 years.
The Hecht Co. watched passively as two other department stores -- Lansburgh's and Kann's -- folded in the early '70s. Blight and suburban malls claimed other retailers, and the eastern end of the downtown retail core detriorated around Hecht's.
In the meantime, Washington-based Woodward & Lothrop Inc., the area's largest department store chain, took a risk that paid off in the long run. Knowing that the subway's major transfer point would be built under its downtown store, Woodies paid about $1 million to have an entrance to the subway station cut through its basement wall.
The gamble paid off in increased sales, and Woodies solidified the gains with a complete renovation of its flagship store.
Woodies' commitment to downtown didn't stop there. It subsequently announced that it will relinquish its annex, or North building, as part of a joint-venture agreement with a developer. The property will be replaced by a mixed-use complex that will include office space and a hotel.
The Hecht Co. is also only a few steps from a Metro station. While design limitations might have precluded Hecht's from duplicating Woodies' underground strategy, the building still is easily accessible to the subway.
And a swap of that property for a parcel at Metro Center would have made sense. Chances are, a developer may be willing to swap a site closer to the retail core for the Hecht property made more valuable by its proximity to a Metro station. Similar deals already have been made between developers and commercial property owners in the District.
Interestingly, the Hecht Co. built new stores in suburban malls in Prince George's County, Fairfax County, Annapolis and Baltimore County in the past 10 years. In each instance, the company negotiated an acceptable deal with developers, not elected officials.
If the RLA board ever gets off the dime and selects a developer for Metro Center, Hecht's would have to negotiate with that developer. Because the snafu over Metro Center is likely to continue for a while, the Hecht Co. ought to look to another developer before waiting for the city to come to its aid.
With the commercial real estate market in a slump, the timing may be perfect for the Hecht Co. to work out a reasonable deal independent of the Metro Center site. Even though downtown is in the midst of a building boom, developers are stuck with unleased space in what experts describe as a buyers' market.
Indeed, some developers have decided to forego or postpone development of choice parcels. Perhaps some of them would be willing to listen to a reasonable offer from the Hecht Co.