Recent announcements of plans by leading national retailers to open stores in Northern Virginia shopping malls is further evidence that downtown Washington is being written off as a major retail center. Massive redevelopment and the rhetoric of boosterism aside, Washington's retail core simply holds little attraction for investment by major retail chains.
It's been 10 years since Neiman-Marcus opened its store in Friendship Heights in Northwest Washington. In the interim, no other national retailer has opened a major department or specialty store in the District.
Extensive renovation by Woodward & Lothrop Inc. of its flagship store, the relocation of Hecht's department store to a new building, development of The Shops at National Place and the addition of specialty shops in the redeveloped Old Post Office building have increased sales activity, reduced blight and raised hope for a renaissance in downtown Washington. On the other hand, the continuing exodus of established merchants from downtown and the lack of interest on the part of national retailers to come in is a sure sign of continuing decline.
Recently a story in The Washington Post noted that increased competition from outside retailers opening stores in the Virginia suburbs "comes at a critical time" for Garfinckel's, the local specialty-store chain that is being acquired by Raleigh Stores Corp., also of Washington. The increased competition, by extension, comes at a critical time for downtown Washington's retail core.
Expressed concerns about the health of the retail core notwithstanding, D.C. officials and business leaders have not succeeded in reversing significant trends in retailing that gained momentum in the mid-1970s. The huge shift in population from city to suburbs was accompanied by substantial increases in commercial development, jobs and retail sales outside the District.
Regional malls replaced the downtown retail core as the primary shopping center for most area residents. With the development of at least six regional malls from the early 1970s until 1980, sustaining viability in the downtown retail core has been difficult to say the least. Bloomingdale's, Lord & Taylor, I. Magnin and other big-name retailers have spurned the downtown retail core in favor of suburban locations at White Flint Mall in Montgomery County and Tysons Corner and Fair Oaks Mall in Northern Virginia. Indeed, concessions offered by a developer at the District's insistence failed to attract Bloomingdale's.
It's fairly obvious that persuading major retailers to locate in the downtown retail core will be extremely difficult now that a new generation of suburban shopping malls is being developed. Retailers such as Neiman-Marcus, Nordstrom's, R.H. Macy & Co. and Saks Fifth Avenue have opted for locations in Tysons II, Pentagon City and an expanded Tysons Corner Shopping Center. Other major retailers are just as likely to make similar choices rather than seriously consider a downtown location.
This 10-year snub of downtown Washington continues to compound local problems that have contributed to its decline over the years. Ironically, even as city officials proclaim the need for a fourth department store to anchor the retail core, small merchants are being forced to make way for development of office buildings.
No major retailers are coming and scores of small merchants are leaving. The perception, right or wrong, is one in which priority is being given to the development of office projects. That's not very helpful to the District's goal of creating lively streets, bringing more shoppers downtown and generating greater revenue for retailers and the city.
Downtown Partnership, a public/private initiative created three years ago to guide the revitalization of the central business district, has identified five areas to be covered in its 1987 work program: parking, appearance, market study, improved management and safety.
The list should have included a national marketing campaign and development of realistic incentives, including subsidies and tax relief.
Two years ago, a member of Downtown Partnership shared some observations about the status of retailing in the central business district that are applicable today:
"The problem is that there are very few incentives that exist for developers or retailers.
"One of the thorniest problems is how to enhance retail in downtown Washington, whether it's large retailers or small retailers. Unless we can come up with more tools for the District to bargain with, it's hard to keep retail downtown."
It's equally difficult to get retailers to locate downtown even when it can be demonstrated that city residents, a large office work force and millions of visitors form a strong base of effective buying power.
It's also a tough sell to persuade a major retailer to locate in the retail core if the median rental rate is nearly $40 a square foot.
Certainly suburban malls have become the primary shopping centers of the area, but significant opportunities exist in the downtown retail core. It's up to D.C. officials to point them out to major retailers and to help them take advantage of those opportunities.