Cleveland Park Woes
November 10, 2016
I have been reading on the Cleveland Park neighborhood listserv an interesting discussion. It began this time with the news that 7-Eleven has rented the space that used to be Dino’s Restaurant, Connecticut Avenue and Ordway Street, and will now open a store one block from the store it closed several years ago.
I say the discussion began “this time” because the neighbors in Cleveland Park pretty frequently write to each other about their disappointment with their commercial strip on Connecticut Avenue between Macomb and Porter Streets.
It is not up to their standards and they have lots of explanations most of which seem right to me. Among them:
Parking is difficult in their neighborhood and people don’t walk much. The constricting little lanes on Connecticut Avenue to which the neighborhood is so attached complicate traffic and don’t permit storefronts as visible and inviting as they might be otherwise. Landlords seem willing to tolerate long vacancies in their stores rather than reduce their rents and fill the stores. The massive Metro entrance on the west side blocks the view of the stores there and is always dirty. A lot of the strip is now owned by a large, national, publicly traded company that doesn’t care much about vacancies or the neighborhood. There are greater attractions on Wisconsin Avenue since the opening of Cathedral Commons. The neighborhood is not densely populated enough for its businesses and further residents don’t support small businesses as much as they should.
I agree with all of this. The Magruders/Palena space has been empty for two and half years, the former Dino’s for three years.
Small business is hard; it is risky. When they are entertaining the proposals from small, independent businesses landlords are able to extract few protections of consequence. They ask for personal guarantees and for larger-than-usual security deposits; but in the end they take greater risks than they would like to.
One Woodley Park resident wrote to the neighborhood site:
I can’t stress enough how problematic landlords are in this situation. Woodley Park wanted small locally owned business that would come into our neighborhood and make positive contributions to the community.
But the landlord made this argument
Market conditions demand tenants with good credit ratings, and eating establishments with a national presence have the requisite financial stability to not only sign leases but proven track records of success. Without such capabilities, the space is at risk of remaining vacant, which negatively affects the streetscape and viability of other retail spaces.
If you were a landlord wouldn’t you prefer to rent to 7-Eleven that might fail but will never default on its rent rather than a local operator who might have to struggle all the time to create a viable neighborhood business?
Businesses don’t always work well. Often they fail to pay their rent on time or at all and landlords have to make the difficult choice of hoping that things will work out or foreclosing, taking their spaces back and looking for other tenants.
Here is what another resident had to say:
Landlords invest in a neighborhood wanting nothing more than the vibrancy of the neighborhood! That said, they are people trying to earn a living, like everyone else. They’re trying to find a safe “investment” of their resources, just like everyone else. And when they spend $ tens of thousands to fit out space for a tenant (no exaggeration), PLUS pay a broker a hefty leasing fee, PLUS deal with the space being empty with no income while it’s being built, PLUS legal fees to negotiate the leases, …and then, after all that, the tenant fails and shuts the door before the lease term ends (e.g. Remember the cereal store, the StoneCold (sic) Creamery, the French pastry shop, the knitwear and running gear stores next to Petco, etc, etc…), that’s the landlord’s money down the drain. It’s not that landlords don’t love independent retailers, or care about the neighborhood…they absolutely do! But it’s a very risky business
The 7-11 is exactly the kind of business the rental agent dreams about, a national chain with deep pockets that can carry a store that cannot always pay its own way. Neither the ANC representative nor the local residents can do anything to convince a rental agent to rent to a bookstore or stationary store, a fabric shop (one of my wishes) or a consignment shop (my other wish). If you can crack that hard nut called the commercial rental agent, you will be accomplishing a lot.
Commercial property losses are valuable and sometimes landlords abuse them. They stop really trying to rent their vacant stores in the hope that a 7-Eleven will come along. They reject supply and demand and hold their rents at whatever level they think might be possible if some national chump does come along – and sometimes one does.
Then neighborhoods lose a second time. After having endured long periods of vacancies they end up with stores they don’t really want.
Landlords ought to be penalized for refusing to drop rents; someone wrote that in the listserv discussion:
If you want to force private building owners to stop sitting on vacant spaces and show some interest in the vitality of our neighborhood, then urge the Council to stop the practice of exempting them from the vacant property tax for up to two years if they “advertise.”
I think that’s right.
All this explains only partially why Cleveland Park appears to be doing poorly in its retail because other neighborhoods are doing better. The other side of the neighborhood, along Wisconsin Avenue, is prospering. Van Ness is blooming. Even Adams Morgan is coming along.
Adams Morgan has been in the doldrums since 1991, even before that. It has an abundance of apparently avaricious landlords who rent their spaces to awful businesses. Eighteenth Street looks deteriorated. It is perceived as dangerous.
But a new luxury hotel is rising on Columbia Road now and a few new restaurants and good old ones are doing very well. Adams Morgan appears to be on a slow rise.
When I decided to open Bread Furst I first looked at a space on Connecticut Avenue near the Washington Hilton, the Dupont Circle area. Then I considered a vacant space in Adams Morgan next to Mintwood Place. It had been vacant for a few years then (and is still vacant). I considered Mt. Pleasant and other spaces at Dupont Circle. I negotiated on the space at Chevy Chase Circle that is now Macon, the restaurant.
But I never considered looking in Cleveland Park.
Van Ness has never been very much of a neighborhood, not nearly as glamorous as Cleveland Park. Forest Hills is beautiful but on the whole the area is dominated by the looming University of the District of Columbia and by the massive futuristic Intelstat complex.
An unlikely candidate for renewal – but since Bread Furst opened in May 2014 here is what happened at Van Ness:
Neighbors formed a “vision committee” and applied to the National Trust for Historic Preservation’s Main Street America program and to the city for a grant.
They recuited Theresa Cameron to be a full-time director of the program and she has been at work for a year guiding community and economic development, organizing neighborhood events, and recruiting small businesses to enrich the neighborhood.
It was the right time for Van Ness. The old arcade, lovable but threadbare and impractical, was about to be demolished and a high-end rental building erected. The project belongs to B.F. Saul, not a detached national giant, but a local company committed to the city.
The Saul leasing agent, Zachary Friedlis lives in the neighborhood and, with the support of the Saul Company, rejected overtures from national chain stores and set out to find local operators for the two retail spaces in the building.
So Fabio Trabocchi of Fiola, one of the city’s illustrious chefs, is about to open a neighborhood pasta restaurant and the operators of Broad Branch Market in Chevy Chase have opened a market-deli in the other retail space.
And the building itself is beautiful.
As for us, the neighborhood values us so much that we see the same customers all the time, many several times each week. And there is no day during which someone fails to tell me how much we have done for the neighborhood.
OK, Cleveland Park. You are a few blocks down the street. Your neighborhood has always been my favorite in the city. For 60 years I have envied friends who live there. You are one mile away from Bread Furst. You should have fabulous neighborhood retail.
You have some disadvantages: You really have only half a neighborhood as the east side of Connecticut Avenue is practically in Rock Creek Park. Parking is more than difficult; it is a daunting challenge. Commercial development on the Connecticut Avenue side of your neighborhood has been eclipsed by development on the Wisconsin Avenue side. Those little parking lanes to which you are so attached are unappealing to prospective retailers. There is no possibility for customers to dash into and out of a store. Shopping there is a project.
But you have a fabulous movie theater and a few very good restaurants. You have far more street life than Van Ness does at the moment.
And just like us, you have a loveable but impractical little shopping mall. But what a spot it could be if you would encourage development of it into a mixed use building like our new Park Van Ness.
You know that you have a bad reputation among small business-people who say you don’t support your neighborhood’s independent business.
There are things we can do to re-energize the Conn. Ave. commercial area. One thing we should stop doing is publicly complain about our business area. We have many great businesses and it does them no benefit to have residents declare that it is a sleepy, sad place to visit. Let’s support our businesses to the rest of DC…
We can’t force building owners to lease to our desired businesses, but if we don’t support a business it can’t survive. But that isn’t how you want to influence the mix of businesses in Cleveland Park. Let’s focus on our current businesses and show future businesses that Cleveland Park is an exciting place to be.
It puzzles me that you don’t exercise your formidable neighborhood power.
Here is what one of you wrote:
Cleveland Park looks a bit derelict anyway: broken trees, broken sidewalks, parking meters that don’t work, empty retail spaces, plus it’s a speedway five hours a day — which prevents commercial activity for those hours. Would be nice to have a total make-over, with multi-story buildings, more restaurants with outdoor seating, traffic flow rationalized… Cleveland Park has no cachet: you go there for a specific errand, not to browse or take in the ambience or to linger on the sidewalk. It needs to tart itself up.
Small business is very hard; I have written that here before and everyone knows it. It gets not easier but harder. The new wage and hour regulations of the Obama Administration are complicated, expensive, and burdensome.
The universal paid leave policy for the District cheerfully advocated by right-minded good citizens is going to make things even more difficult for small businesses.
Our American habit of passing off onto small business the costs of social services that in virtually every other country are bourn by government makes life perilous.
But we are here, a small independent bakery with no aspirations of expansion, very happy to be an important part of a single neighborhood that is self-consciously pursuing its own improvement.
Surely Cleveland Park can do all that too.