Little support for proposed ban of chain stores

BOULDER – An informal poll of city council members and business leaders here shows little support for a proposed ban of national merchants to the city.

The Boulder Independent Business Alliance (BIBA) and its supporters say they’re worried about Boulder becoming Anytown U.S.A. They say national chains are driving out local retailers here, and city officials should protect the local merchants and the unique character of Boulder.

Their proposal, called the Community Vitality Act (CVA), is an effort to ban more national merchants to Boulder – Boulder Crossroads being somewhat exempt. Under the CVA’s terms, the city would give bidding preferences to local, independent contractors and would require its contractors to consider local bids first.

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Crossroads would be excused from parts of the CVA because “the problems that the CVA was designed to address really can’t be considered problems in the context of the indoor shopping mall. People expect a very different character of Crossroads,” says Jeff Milchen, BIBA’s director. Businesses already here or in the approval process also would be excluded from the CVA’s terms.

But few believe a problem exists between the balance of local and national merchants in Boulder. Downtown Boulder Inc. (DBI) says national retailers downtown (excluding chains owned by out-of-state corporations) today take up 73,960 square feet compared to 85,700 square feet from 1949 to 1969 — a 14 percent drop.

The reason for the drop? Most of those national retailers back then moved to Boulder Crossroads, which is now turning its attention to signing local businesses as tenants.

Either way, the CVA wouldn’t affect the way Art Coppola, president and chief executive officer of The Macerich Co., which owns Crossroads, conducts business. “We’re not talking to one national chain,” he says. “We will — if we have to.”

The CVA proposes that “formula businesses,” or chains at Crossroads, of more than 12,000 square feet undergo a special permitting and use review “to allow time for citizen input and review of the business’ potential impact on the community.”

Coppola says he would object to such a regulation yet can understand the impetus. He, too, would be concerned about nationals taking over the character of his town. “I wouldn’t be thrilled by it, but I wouldn’t be upset by it,” he says of the CVA, adding that he’s proposing “financial inducements” for local and regional tenants.

“I don’t need any encouragement from any ordinance to give preference to local and regional tenants,” Coppola says.

Opinions run gamut

Members of the city council, even those more inclined to support an initiative such as the CVA, aren’t quite ready for an outright ban on national merchants.

National chains have their advantages, explains real estate analyst Tim Gonerka of the Littleton-based Retail Resource Group. Gonerka says national companies have “whole corporate structures to fall back on,” have larger selections and well-known reputations.

“We’re a nation of convenience now, and people are comfortable with the selections that they know,” he says. “I would say in 70 percent of the cases, nationals do a lot more volume in sales, even with a like product.”

Gonerka adds, however, that an healthy shopping environment should have a healthy mix of local and national tenants. “You need the backbone of the strong nationals and the personality of locals,” he says.

Developer Jim Loftus, who has done projects that include local and national merchants, adds that city officials should be more concerned with the loss of retail sales tax from banning national merchants to the city.

Five members of the city council must agree that grounds exist to investigate the CVA’s merits. While community activists addressed the council in November, a formal proposal isn’t on the city council’s agenda but is on the members’ minds.

Councilman Spence Havlick, who favors local merchants, says before he decides his vote on BIBA’s proposal, he would need an inventory of the space that national and local retailers occupy; evidence that banning national retailers would encourage shoppers to patronize local businesses; and that proof that there wouldn’t be a “negative spillover” in the loss of sales-tax revenue.

Councilwoman Lisa Morzel, also sympathetic of local merchants, says she’s “certainly open to do something that addresses their concerns.” Also needed, however, is a public education campaign that explains how shopping choices impact Boulder’s quality of life, she says.

Other council members clearly stand in opposition to the CVA.

“Before staff begins researching issues surrounding the so-called Community Vitality Act, we should follow council policy and indicate if there is any support for this effort,” says Councilman Richard Lopez in an e-mail to council members. “I do not support spending valuable staff time on this discriminatory act.”

Councilman Gordon Riggle also cites several reasons for opposing the CVA. Some proposals are bad ideas, and some are ill-timed, he says. “This one is both.”

For Riggle, it’s an issue of utilitarianism and supply and demand. He says the proposal would reduce the range of choice, increase prices for a small range of goods and hurt lower-income families that depend on discount, national retailers.

“It’s just a selfish idea for the benefit of a handful of merchants at the expense of the larger community of citizens,” he says, adding that regional retail competition doesn’t allow Boulder to be choosy.

“The underlying assumption is an unreactive marketplace of consumers,” Riggle says, “that they will just mindlessly go to local retailers if there are no national retailers available. That’s fundamentally wrong. If you limit their choices in Boulder, they will take advantage of alternatives.”

And the alternatives are many. Boulder now has to compete for shoppers against the Internet and shopping megaplexes in Broomfield and other cities. According to the 1999 Boulder Citizen Survey, more than 80 percent of those polled reported daily access to the Internet and said they were growing dissatisfied with the lack of shopping choices within city limits.

Is there a problem?

Besides the potential loss of sales-tax revenue, Deputy Mayor Don Mock and Stan Zemler of the Boulder Chamber of Commerce see problems with the CVA’s terminology: “formula” vs. “non-formula.” Zemler, because of the us-vs.-them tone of the proposal, believes that city officials ultimately will rule that the CVA would be illegal.

“It becomes rather problematic to make a distinction between local and national chains,” Mock explains. “An awful lot of our locally homegrown businesses start to have additional outlets. By the time you get four of those elsewhere, do they suddenly become a formula business and, therefore, no longer favored even though they started here?”

BIBA should let free enterprise work, Mock continues. Before Pearl Street Mall, home to some of the town’s favorite local merchants, national merchants, such as J.C. Penney, Joslins and Woolworth’s occupied that space. They eventually faltered.

Milchen counters that national merchants can afford to come in and undersell independent retailers, forcing independents, to shut their doors, only to fail later. Independent businesses also help the local economy by their dependence on local support services, such attorneys, contractors and designers.

The CVA wouldn’t stop national corporations from buying local businesses; it only would stop them from making them clones of the corporate structure, Milchen says.

“(Independent businesses) can sell out to whomever they wish,” he explains. “(The corporation) can’t turn the independent business into a formula establishment, one that has the same standardized product line, menu, uniforms, etc. that the rest of the operations do.”

But would that be bad? Most everyone agrees that a healthy mix of local and national businesses is key.

Marilyn Haas, DBI’s director, says national retailers, such as DBI member Banana Republic, added vitality in the downtown area when the clothing retailer opened up shop. “Suddenly, others were interested in locating here – and not just nationals,” she says.