Outside the Big Box

One category of development that's frequently debated is big box retail. You know, the Costco's, Best Buys, and Home Depots of the world.

From a retail perspective, this is a profitable niche. Build a large (ok, huge!) store, pack it in with as much product as you can, limit service, and cut prices as much as possible. The store makes up in sales volume what it lacks in profit margin.

It's profitable for developers, as well. Profitable store, built for the long term, easy and cheap to build (they're usually pretty "bare boned"). For a developer, that's good business.

Here's where the debate comes in, though. Big box is not friendly to smart urban development. The stores themselves can often be an acre or more inside. With that much space, walkability is not really an option. Even in an urban environment, the perimiter is so large, you can walk a city block and still be outside the same store. Enough of these and you end up recreating the need for a car, which clogs the urban downtown, sending more people to suburbia, and so on...

Develop one of these in suburbia, though, and that 1-2 acre store turns into a several-acre site. Parking usually takes up at least double the space of the store. Then, there's loading dock access for multiple trucks, required landscaping, access roads, you get the picture. By definition, it's the complete opposite of smart development.

Lately, one more drawback has cropped up. The economic downturn hammered the retail sector, and there have been some bankruptcies and closures of big box retailers - Circuit City is one big example. With each store closure, one more big box is left vacant. That means acres of retail wasteland. No one else wants the stores right now, and until retail takes off again, the space will remain unused. Smaller stores have a much broader base of potential tenants, making them much easier to lease again. This also makes smaller retail stores a much smarter way to develop and grow an urban area.