Friday, March 5, 2010

Who Benefits from Urban Outfitters?

The Central Business Improvement District’s (CBID) board of directors recently approved a $500,000 grant to support the location of an Urban Outfitters store on Market Street in downtown Knoxville. For the record, I fully support and commend the actions of the CBID Board and Tim Hill and his staff at Hatcher-Hill Properties who solicited Urban Outfitters to consider Knoxville for expansion. Downtown developers and boosters have long sought a “catalyst project” to spur additional growth and development in the city center. I agree with Mr. Hill’s statement at the CBID meeting that Urban Outfitters can be that catalyst.

What I found interesting was the example he used to highlight the catalytic possibilities. He talked briefly about the Third Street Promenade, a downtown redevelopment project in Santa Monica, California. Urban Outfitters apparently committed early to this project. He mentioned four additional retailers who followed UO’s lead – Old Navy, Barnes & Noble, Apple and Pottery Barn. No one thinks that national retailers of this caliber will blindly follow Urban Outfitters into largely unproven markets like downtown Knoxville; however, let’s assume that UO exceeds its sales projections downtown. Other retailers will know about their success and will want to locate there. That is the nature of a catalytic project.

My questions are, “What happens when Pottery Barn and Old Navy call? Shouldn’t we be discussing it now? And Who exactly should be leading the discussion?”

Look at it practically. Apple’s footprint of less than 6,000 square feet can be accommodated easily; however, Old Navy Stores are generally between 20,000- 35,000 square feet. Barnes & Noble stores range from 25,000 – 67,000 square feet. Pottery Barn is a modest 10,000 – 14,000 square feet. If Urban Outfitters is the catalyst for their potential interest, it can reasonably be assumed that these retailers would want to occupy space nearby. Is it beyond possibility that Market Square could be taken over by national retailers? Others have suggested Jackson Avenue, specifically the McClung Warehouses, as a possible retail corridor. Although, if you are a retailer whose impetus for being in Knoxville is the benefit of co-tenancy with Urban Outfitters, would Jackson Avenue be a viable location?

In a random and admittedly limited poll, I asked people what building downtown is suitable for the next large retailer. One hundred percent of the respondents chose The Penney’s Building . And what about the third choice for a large retailer? Most people did not have an answer. The Campbell Building? The Farragut Building? Marble Alley?

The point is that we should be planning now. The grant approved by the CBID was not a desperate attempt to save downtown. It was an endorsement of downtown’s vibrancy and acknowledgement that sometimes major steps forward require a little catalyst. Let’s start talking about what happens when our catalyst catches fire.

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