Put a few Preston Hollow residents together, and they’ll come up with 300 or so questions about retail development in the neighborhood. What’s going to happen to Preston and Royal or to Preston and Forest? Will big-box stores such as Wal-Mart eventually encroach on the neighborhood? Do we need something like West Village up here?
Fair questions all. Retail development – like crime and real estate prices – is one of those things that makes Preston Hollow what it is. So we put together a panel of nationally known developers and experts, all of whom have Dallas ties, to answer just those questions (each was interviewed separately by contributing editor Jeff Seigel). These are not bureaucrats or politicians; rather, these are the guys who pay the bills to throw the dirt:
Q: The urban lifestyle centers such as Mockingbird Station and West Village are the sorts of projects that everyone wants to build now. When you’re looking to put something like this in a neighborhood, what do you look for? What does the neighborhood need to have?
Stebbins: You have to start with reality. You can only do what the market allows you to do. It’s not one of those things that if you build it, they will come. It has to be market-based.
Ashmore: I get calls all of the time from municipalities that want something like that. But they are also within the trade area of a mall that has 70 percent of the tenants that would be in a town center. That’s not going to work. They just don’t understand the dynamics of the market.
Q: You mentioned trade area. Traditionally, that was defined by drawing circles on a map: one mile for a smaller center; three miles for a bigger one, and five miles for an even bigger one. Does that still apply? Or is there another way to measure trade area?
Hughes: Radials really don’t mean much anymore. It used to be how grocery stores spaced themselves, three miles apart. Now, what you’re looking at is density, how many housetops are in the area.
Bagwell: You have to ask yourself, “Who is our customer?” and then you have to build something for those customers. Look at who lives around the area. At West Village, the customer is young, urban, high income, disposable income, well traveled, sophisticated, stylish. So you can’t build West Village somewhere that you don’t have that.
Stebbins: What’s the area’s age? We have 26 percent 40-59 and 24 percent 25-40, because they are peak spending years. Do they have children? How many are women, because purchasing decisions are made by women.
Q: So you’re talking about demographics. But are there other things that matter as well?
Ashmore: It also means driving patterns, driving time, natural barriers. What’s the proximity for the shopper? They don’t want to drive great distances. What’s the road infrastructure like? Is there easy access, like at NorthPark or Mockingbird Station, right on Central Expressway?
Stebbins: We defined specific things that we wanted. Our drive time, for instance, is 15 minutes. There were no malls within nine or 10 miles.
Q: That doesn’t sound too complicated. So why don’t we see more of these things, especially in Preston Hollow?
Hughes: Developers who do retail, in general, don’t do a good job of finding out what the neighborhood needs. They have to worry about the investor yield requirement, so they don’t build what the neighborhood needs. You really need to interview the neighborhood.
Bagwell: You have to find a developer who is willing to do it correctly. Most developers, they’re just happy doing a one-off. Some of them just don’t give a damn about a lot of these things. You just can’t plop something down, transplant it from somewhere else. If you did that, why would anyone go? What’s new about that, what’s different about that?
Q: Isn’t that a little esoteric for a shopping center?
Hughes: There’s a philosophy. You have to create a sense of place. People yearn for places to go shopping that have a neighborhood feel, that are more intimate, on a smaller scale. They want the neighborhood hardware store, the neighborhood toy store, and I think they’re even willing to pay for it, with higher prices. I don’t even think they want all these big grocery stores, because for some reason we’ve gotten away from the smaller ones. Instead, you get big-box stores. But that’s not an adventure. That’s not a sense of place.
Stebbins: You have to give them reasons to go there every day. You don’t want just another strip center. That’s why we have the city hall [at Southlake]. They can get their driver’s license renewed. We have a post office. We’re going to add a movie theater and a restaurant row and a hotel. It really is about planning a community.
Q: You talk about local retail and how important that is. But how difficult is that to do?
Ashmore: Everyone says they want local retail. But they also want to shop at the Gap. And if you don’t get the national retailers, you can’t do the project.
Stebbins: We were very conscious of getting local retail, because that helps add to the sense of ownership in the community. We’re about 70 percent national and 30 percent local, and that’s a really high local number. But having said that, those 30 percent of the tenants take up 70 percent of our time. You have to consciously want local tenants, and that’s why many developers don’t get them.
Bagwell: You have to have local retailers buy into your philosophy. Once they saw what we were doing, that we were a reflection of the neighborhood, then we got the neighborhood flower shop.
Q: Preston Hollow is different than many other parts of town because there is established local retail. Can it stay there? Is there always going to be something like Preston and Royal?
Stebbins: Any time you look at that part of town,you have to take NorthPark into account. How close is it to want you to do? That’s something the national retailers all take into account. They don’t want to cannibalize their business. What you might see at Preston and Royal, for instance, is redevelopment, because in a lot of ways the layout is dated. A developer might see an opportunity to create something better, like giving up some of the parking to create a public space. That would give it nods of interest that it doesn’t have now.
Bagwell: In an established neighborhood, it depends on the developer. They have to be committed to place-making; they have to have the same goals and objectives as the neighborhood. And can they get enough land to meet those goals and objectives?
Q: There has been a lot of talk about big boxes, the superstores, encroaching on the neighborhood, especially along Central Expressway. Many of the residents don’t want them. Can the neighborhood help them out?
Hughes: It all depends on how badly they want to keep it out. The City Council has to get re-elected, so there’s the pure politics of it.
Q: So it’s about being patient, then, for people in the neighborhood?
Hughes: This is a problem we’re going to have for the next generation. There are a lot of buildings, not just out there now, but that are being built, that are going to be functionally obsolete. And then what’s going to happen to them? Are big boxes still going to be the way people shop?
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