Selling St. Louis: Exploring the Retail Geography of St. Louis City and County

The title of this post is the title of Matt Bauer’s thesis for his Masters in Urban Planning and Real Estate Development from St. Louis University. I’ve read all 80+ pages. Twice. First, I have to admire Bauer for getting a Master’s degree. I personally couldn’t wait to get out of school so I simply have a bachelor’s degree. I’ve decided to critique Bauer’s thesis as a means of providing feedback to him as well as getting some points out into cyberspace.

Click here to download the 5.6mb PDF file.

Bauer’s “Executive Summary” at the beginning of the thesis gets things going. Other major sections include a literature review, methodology, findings, recommendations and finally conclusions. As you’d expect from a thesis it contains many facts and figures that interrupt the otherwise excellent flow of the material. Bauer has kept this to a minimum so the paper reads very well. However, lots of information is presented which some may find overwhelming. If you do, put it down and come back to it later as it is well worth reading.

So I’m going to attempt to share my thoughts on Bauer’s thesis without taking another 80 pages to do so. For the most part I agree with Bauer and found his thesis a confirmation of my own beliefs. What was new to me was his detailed research into retail space based on zip codes. As a result he has discovered gaps in the retail market in addition to points of saturation. I come to some different conclusions than he in a few places which I will detail later. Be warned, this is a very long post.

> St. Louis (indeed other cities) tried to mock suburban shopping through malls and strip centers. They have failed.

> Retail can succeed in urban markets, retailers need to grow through increasing the number of stores.

> Baby boomers and Gen Y are looking for unique shopping experiences.

> Urban areas represent much higher spending densities than suburban areas, plus many urban areas are under-served.

> Bauer asserts that “convenience of nearby shopping is important to home-buyers.” Yes and no. To many buying homes on the edge of metropolitan areas they don’t want anything close to them while the urban buyer wants to walk to stores. Suburban buyers often drive a couple of miles to a store while the urban buyer will see the same two mile drive too great a distance. Convenience is relative and this is not explored in his thesis. [p6]

> The new Maplewood Commons is discussed at several points. Early on [p8] Bauer says, “As the cost and demand of city services rise, a city like Maplewood is forced to make a choice: new retail or old residential.” This view is too narrow and not representative of trends Bauer discusses later which include mixed-used lifestyle centers. Bauer continues, “In many cases suburban cities have little choice but to pick large-scale retail development over residential and community development.” His statements are based on retail being a net gain for cities and residential being a net loss. Maplewood had other choices beyond new retail and old residential, namely a “new urbanist” mix of retail and residential. Bauer seems to let Maplewood and other cities off the hook for their large-scale decisions without looking at how a mix might have been a good balance.

> I’m being picky here but Bauer states, “In the 1980s, the city not only saw its residents continuing to leave for new homes in the county, but retail spending was increasingly attracted to the county’s regional malls.” My issue is with the word “new” in the quote. I’d argue that city residents left for old houses in St. Louis County, Jefferson County and St. Charles County vacated by those residents seeking new houses in those same areas. At the very least Bauer should have omitted the word “new” from this section. [p8]

> One of the best sections talks about both St. Louis Centre and St. Louis Marketplace relative to suburban models and how they, “serve as a lesson that simply duplicating this successful model will not guarantee success.” This might be most important sentence in the entire thesis! Yet today people still continue to put forth projects and assume success simply because the model was successful elsewhere. Conversely, just because something failed in one location doesn’t necessarily mean it will fail in another location.

> “Today retailers face their most significant risk not from changing demographics, but from changing competition. In order to grow, retailers need to find new markets for new stores and in order to stay viable, new stores will eventually need to be updated and upgraded to remain competitive.” At points before and after this Bauer talks about baby boomers with more disposable income now that kids are gone and other demographic reasons why retailing is changing. To say at this point risk is not from demographic changes is contrary to other sections of the thesis. For example, two pages later [p12] Bauer states, “Retailing has evolved over the last six decades and it continues to evolve as consumers change shopping habits. Increasingly, people are spending less time shopping.”

> Bauer does address two conflicting trends. The increase of big box retailers with everything under one roof and smaller niche retailers.

> Some of the figures are very interesting and show that sprawl works beyond housing, “From 1968 to 1993, shopping center space more than doubled, this is four times the growth of retail sales during the same period.” It doesn’t take much to figure out that such a trend cannot be sustained every 25 years. Something must give. “During the period 1986 to 1991, retail square footage increased 23% while the population increased only 5%.” Wow, some disparity. We are building far more shopping than we need as a national trend. Not good but not surprising. Gotta have some reason to fire up that SUV.

> Bauer makes a great argument why retailers, now developers, are now “driving decisions about location, size and the design of retail developments.” He also argues costs for urban and suburban developments are “increasingly comparable” unlike the old days when it was much cheaper to build in the ‘burbs.” [p16]

> “The Baby-boomers and Generation Y represent the two largest demographic groups. These customers are the ones most coveted by retailers.” Ok, now this is personal. As a Generation X’r I think my money is good. Yes, we are a smaller group than the older boomers and younger Y groups but we are at the age where we are having increasing income and spending. Bauer fails to mention Gen Y at all in his thesis. [p18]

> “Retailers are now more willing to accept and some even prefer to locate in developments with a mix of retail and residential. These developments provide ‘built-in’ customers, an active environment and a sense of security that might not be available in traditional shopping centers.” This is why we as a city can begin to demand such development rather than just accept the typical suburban model.

> “Wal-Mart Supercenters threaten rural and suburban grocery stores, now grocers in urban and older suburban areas will be challenged by smaller Wal-Mart Neighborhood Markets.” I’m not sure if Bauer realizes how true this really is. I’ve seen it first hand in my birth place of Oklahoma City. These “neighborhood” markets have forced many other stores to close. My elderly parents must now drive much further to do their grocery shopping. [p22]

> “Today’s urban cities are filled with small parcels that must be acquired individually in order to create a site appropriate for a large-scale development.” This is where Bauer starts to go wrong in my view. He assumes urban retail must be in large-scale developments. Bauer continues citing reasons why doing large-scale projects in cities are difficult without exploring how many small-scale developments can be done side by side on an urban street.

> Bauer does a great job of addressing crime and perception of crime on page 24.

> He cites a source that says urban retailers have a much higher employee turnover rate but fails to mention reasons why. I was left wondering why and what do we do about it. My guesses on reasons why would be issues of transportation to and from work and child care.

> Bauer concludes the ‘Literature Review’ section with, “Many trends indicate that urban areas are ripe for more retail development. Increasingly, cities across the country are starting to see some of this development in their urban areas. Readings suggest that past trends in the retail industry and advantages inherent in suburban retail development may have left the City of St. Louis ‘under-retailed’ in comparison to surrounding St. Louis County.” Absolutely, we are quite under-retailed!

> Bauer points to alarming findings which I don’t dispute. Basically the findings are that people will bypass older and/or smaller shopping centers for newer and bigger centers. However, this was not the case for the St. Louis Marketplace. [p29]

> I love this sentence, “Studies comparing successful and unsuccessful shopping centers show that good design can offset a poor location, but that good location cannot make up for a poor design.” Design is important which is why I think recent developments like Gravois Plaza and Southtown will fail. [p30]

> Good discussion on age of buildings and retail infrastructure and how many retailers will see St. Louis’ buildings as obsolete. This doesn’t mean the buildings need to be razed but they do need significant upgrading to be competitive.

> Bauer does a good job at looking at pros and cons of subsidizing retail developments with tax credits. [p33]

> “Without addressing the problems and causes of concentrated poverty, it will remain difficult for retailers to locate and operate successfully in these areas.” Excellent presentation of various views on inner-city retail problems. [p34-38]

> Grocery shopping is something we all do and this is where a big divide exists. Bauer does an excellent job of arguing that inner-city shoppers are as concerned about the quality of the selection and appearance of the store as suburban shoppers. Urban grocery store owners fail to understand this. I know many people that drive from the city (including downtown) to Schnuck’s on Clayton Road in Richmond Heights because they want a better grocery store experience than they can find in the city. This Schnuck’s is certainly better than the Lindell Schnuck’s.

> Bauer’s methodology explanation begins on p41 and I generally accepted the methods.

> Of note is that areas of North St. Louis show “significant income density.” This is very important to note as the common public perception is that the North side is unilaterally poor. [p51]

> “In electronics almost $40 million in demand goes unmet each year in the city. This demand would justify 1.27 additional large electronics stores, such as Best Buy.” Well, Bauer has already argued quite well that urban shoppers are seeking more unique and urban experiences yet he is justifying a big box store. Why not argue for 3 smaller electronics stores? [p61]

> “It is important for cities to focus on land assembly to attract retail development.” I disagree. I understand Bauer’s points about big box and tendencies toward larger projects but his other points about unique urban shopping environments argues in favor of retail streets lined with renovated and new buildings. [p66]

> Bauer argues in favor of national chains. While his reasons are sound and applicable to most they don’t really apply to me personally.

> The section every city resident — in particular those at city hall — needs to read is on “Urban Design” starting on page 69. I won’t quote the whole section but he makes the case for big boxes entering the city but changing their models to work in an urban environment, “Using suburban design models for major city developments fails to exploit the city’s unique urban environment as an asset. If the city and the suburbs compete on suburban terms the city will lose out eventually.” Amen!

> “Land assembly is the most critically important role the government can play in the effort to attract retail development.” Bauer references a 1995 source for this viewpoint. I agree that municipalities can either be a help or hindrance to retail development. The concept of massing large parcels is at least as old as this reference. It is 2005 and Bauer correctly indicates the trend is toward more unique & urban retailing. That changes the picture of what is needed. Smaller footprints and mixed use are the key. In St. Louis that will mean new buildings along vacant sides between Tucker and Jefferson along streets like Locust, Washington and Delmar. It is time to move away from assembling big sites to making it easier for retailers to succeed along our urban streets. [p74]

> “Providing safe, clean streets and ample parking is an important part of making an urban retail area successful.” Clean and safe streets, yes. Ample parking? Maybe. Depends upon how you define ample. First, not every store needs their own parking lot. Second, the more residents you have near the retail the less parking that is needed. Portland Oregon comes to mind as a thriving downtown that intentionally limits parking to force the area to be more compact and pedestrian friendly. [p77]

> Another of the best points comes near the end, “Shopping centers in diverse mixed-income areas should focus their retail mix to meet the needs of high and low-income groups. By focusing on stores that are attractive to middle-income consumers, it is more likely that the store will be serving the entire market rather than just the low-end. Catering to the low-end of the market will not provide attractive shopping options for middle-class and upper-class markets.” This is so critical because a concentration of low-end shopping attracts only low-end residents. This becomes a ghetto area by default. We should strive for economic diversity. [p78]

You’re still here? Good for you. These are important issues to discuss as retail and residences are an important part of our city. Congrats to Matt Bauer and an excellent thesis.

– Steve