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SG-W:/ Fwd: The Home Town Advantage Bulletin - March 2001



I suspect a number of you will find this interesting, maybe even 
inspiring. Check the ILSR website (http://www.ilsr.org) for subscription 
info.

Steve

---------------- Begin Forwarded Message ----------------
Date:        03/22  12:59 PM
Received:    03/22  1:25 PM
From:        Stacy Mitchell, smitchell@ilsr.org
To:          home_town_advantage@topica.com

The Home Town Advantage Bulletin
Issue #4  -  March 2001


CONTENTS

-- About this Bulletin
ALLIANCES AND COOPERATIVES
-- In Boulder, Buying Local Pays
-- Vermont Country Stores Form Alliance
-- Eugene's Retailers Launch Joint Ad Campaign
NEW RULES
-- New Law Keeps Kansas City Business District Small-Scale
-- Coronado, Cal. Ordinance Curbs "Formula" Retail
-- Wisconsin Lawmakers Seek to Limit Big Box Subsidies
LOCAL BATTLES
-- Madison Residents say No to Walgreens, Push Alternatives
-- Ikea Backs Out of New Rochelle
-- Petoskey's Local Businesses Fight Massive Retail Development
ANTITRUST
-- Trial to Begin in Antitrust Suit Against Bookstore Chains


ABOUT THIS BULLETIN

In communities across the country--from Warner, New Hampshire to
Flagstaff, Arizona--citizens are taking action to defend and strengthen
their local economies. They are developing strategies and adopting new
policies to curb the expansion of chain stores and support locally owned
businesses.

The Institute for Local Self-Reliance (ILSR) has been tracking these
efforts and will use this bulletin to provide bimonthly updates on
significant developments. We hope it will serve as a tool for making
connections and sharing strategies within this growing movement. We
encourage readers to share news and resources by sending email to
smitchell@ilsr.org.

ILSR is a nonprofit research and education organization that promotes
healthy and sustainable local economies. This bulletin is part of ILSR's
New Rules Project (http://www.newrules.org), which publishes a quarterly
journal, The New Rules;  several electronic bulletins on specific
issues; and books, including The Home Town Advantage: How to Defend Your
Main Street Against Chain Stores and Why It Matters. We also maintains a
web-based clearinghouse of model public policies at
http://www.newrules.org.

Another good source of news on local efforts to keep megastores at bay
is the NewsFlash! section of the Sprawl-Busters web site
(http://www.sprawl-busters.com). Additional links and organizations are
listed at the end of each story.

If you're not already receiving this newsletter directly, subscribe by
sending a blank email to home_town_advantage-subscribe@topica.com  To
unsubscribe, send a blank email to
home_town_advantage-unsubscribe@topica.com


I.  ALLIANCES AND COOPERATIVES

IN BOULDER, BUYING LOCAL PAYS

Residents of Boulder, Col. no longer have to choose between supporting a
locally owned retailer and shopping elsewhere for a better deal. For
$15---less than the price of membership at one warehouse buying
club---they can purchase a Community Benefit Card from the Boulder
Independent Business Alliance (BIBA). The card provides discounts and
other benefits at more than 60 local businesses, with most knocking 10
percent off every product and service they offer.

The card can be purchased at local stores or from several nonprofit
organizations. In exchange for distributing the card, nonprofits keep
half of the proceeds to fund their own programs. "We have always tried
to point out the interdependence of community nonprofits and independent
businesses," says BIBA Director Jeff Milchen. "With this program, we
believe we've developed an effective tool to help both entities."

Founded in 1998, BIBA is perhaps the oldest and most successful
independent business alliance of its kind in the country. The
organization, which has more than 150 members, coordinates joint
marketing and promotional programs that encourage residents to support
locally owned businesses. "Put Your Money Where Your House Is," "Local
Businesses are Your Best Value," and "You're Not a Clone. Why Shop at
One?" are among the slogans that appear on BIBA's print ads, window
decals, and other marketing tools.

-- For more information about BIBA and its new Community Benefit Card,
visit http://www.boulder-iba.org.
-- To learn more about other independent business alliances, read back
issues of this Bulletin at http://www.newrules.org/hta/index.htm.


VERMONT COUNTRY STORES FORM ALLIANCE

Vermont is home to more than 250 country stores, many of which have been
the center of their communities for well over a century. Country stores
are as varied and unique as the towns they serve. Most are small, cozy,
locally owned and operated, and housed in historic buildings. Their
offerings include staple products like newspapers and bread, as well as
goods geared to the local market, such as fishing lures or gourmet
cheeses. Their owners tend to be deeply involved in local affairs and
the stores themselves often function as the town's main gathering place
and political center. "Country stores have a lot to do with making the
community feel like a real community," says Paul Bruhn of the
Preservation Trust of Vermont.

But Vermont's country stores are under siege. Many have already closed
and most of those that remain are struggling to stay open. They are
facing heightened competition from chain convenience stores, like
Cumberland Farms and Jiffy Mart, difficulties with suppliers, costly
repairs on older buildings, and a lack of resources for advertising and
marketing.

Early last year, a group of store owners began exploring the idea of a
creating an alliance that would enable country stores to work together
to solve mutual problems. The Vermont Public Interest Research Group
(VPIRG) hosted an initial meeting and provided the support necessary to
get a steering committee off the ground.

Since then, the Alliance has secured funding from the Vermont Community
Foundation, the Vermont Sustainable Jobs Fund, and the Vermont Country
Store, an established and widely known company. The Vermont Grocers
Association has provided in-kind support.

With the help of a consultant, the steering committee agreed on an
organizational structure and conducted a survey of country stores last
fall to identify common challenges and gage interest in the Alliance.
Out of 107 surveys, 70 responded and most favored the idea.

"We knew then that we were on to something," says Jay Hathaway, who owns
Peltier's Market in Dorset and has provided much of the Alliance's
initial leadership.

Over the next few months, the Alliance will begin recruiting members and
prioritizing goals. The group will focus primarily on cooperative
marketing and purchasing. Marketing ideas include working with the state
tourism department to create and distribute a map of country stores,
developing a logo and web presence, and producing brochures and other
marketing tools.

"Most people place enormous value on having a good little shop down the
road, where you can relax and have a cup of coffee and talk with your
neighbors," says Hathaway. But people tend to take such places for
granted, he notes. They'll drive the extra miles to save a few bucks at
a convenience store chain, and then wonder why the heart of their
village has closed its doors. The Alliance hopes to remind people of the
importance of supporting country stores.

Alliance members also plan to pool their purchasing power to reduce
costs and gain leverage with suppliers. One particularly pressing
problem is that many suppliers will not deliver to stores in remote
areas. With the Alliance as a central purchaser, however, contracts to
supply dozens of stores will soon be contingent on delivering throughout
the state.

"We have to get big to stay small," says Hathaway.

Other goals increasing sales of Vermont-made goods, encouraging members
to become involved in local planning and decision-making bodies, and
establishing a presence at the state legislature.

The Alliance also hopes to help communities resurrect country stores
that have already closed. Hathaway says one possibility is to assist
communities in forming cooperatives that would buy the property,
maintain the building, and lease it to a new owner at cost.

It's not a new idea. Many country stores were in fact started as town
cooperatives in the early 19th century. Hathaway purchased his store 26
years ago with the help of fourteen residents who put up $1,000 each.

More recently, a number of country stores in neighboring New Hampshire
have been revived thanks to community efforts. In Hebron, townspeople
formed the Hebron Common Cooperative, renovated their old country store,
and now lease it to a new owner for $1 a year. In Harrisville, the task
was undertaken by a nonprofit historic preservation organization. In
Sandwich, a group of residents known as the "Sandwich 10" stepped in
when the local owner decided to retire.

-- Preservation Trust of Vermont - http://www.ptvermont.org
-- Vermont Community Foundation - http://www.vermontcf.org
-- Vermont Grocers Association - http://www.vtgrocers.org
-- Vermont Public Interest Research Group - http://www.vpirg.org
-- Vermont Sustainable Jobs Fund - http://www.vsjf.org


EUGENE'S RETAILERS LAUNCH JOINT AD CAMPAIGN

Independent retailers in Eugene, Ore. have banded together to promote
the idea of shopping at locally owned stores. Their new cooperative
advertising program, known as Unique Eugene, aims to "persuade Eugeneans
that shopping at customer service-oriented local stores is better for
the community and more fun."

"The big stores have enough marketing power behind them to tell their
story," says co-founder Paul Nicholson. "We needed a way to tell ours."

Nicholson, owner of Paul's Bicycle Way of Life, conceived the idea for
Unique Eugene after having lunch with an advertising agent and another
local retailer. "We started to talk about how it was a shame that we
didn't have a mechanism for cooperative activities---even for something
as simple as putting ads for each other's stores in our own
newsletters," he says.

By pooling their money, member businesses can buy advertising that would
otherwise be out of reach. The group's first television ads, which aired
last August during the Olympics, focused on building recognition of the
Unique Eugene logo and promoting local retailers generally. Recent ads
combine broad promotion of the idea with a focus on two or three member
businesses.

"Our ads communicate to customers that they'll get a better value and
have a better experience shopping at a local retailer," says Nicholson.
In addition to print and broadcast advertising, Unique Eugene has
created posters, a web site, and gift certificates redeemable at any
member business.

The group currently has nine members, including shoe, record, book, and
appliance stores. Several other local businesses hope to join when
membership slots become available in July. Membership, however, will be
limited to twenty. More would be unwieldy, according Nicholson. Plus,
the group wants to stay focused on businesses that provide high quality
customer service and are involved in the community.

In addition to being locally owned and operated retail stores, members
must "respect and honor their employees" by paying higher than average
wages and encouraging employee participation in decision-making. Member
businesses must also take "steps to minimize their impact on our
environment" and "substantially participate in and contribute to local
charities and non-profits."

Basic membership costs $1,000 annually. In addition, stores are required
to contribute to at least one ad campaign a year by, for example, paying
one-third of the cost of an ad that features their own business and two
others.

So far, the response from the community has been excellent, according to
Nicholson. Many people are now familiar with the organization and
recognize the Unique Eugene logo. Members report lower advertising costs
overall and note that the organization has given them greater
opportunities to exchange ideas and strategies with other local
merchants.

--To learn more about Unique Eugene, visit the group on-line at
http://www.uniqueeugene.com or contact Paul Nicholson at 541-344-5725.


II.  NEW RULES

NEW LAW KEEPS KANSAS CITY BUSINESS DISTRICT SMALL-SCALE

In late November, the Kansas City Council voted to approve new zoning
rules to protect the Brookside business district from large-scale,
suburban-style chain store development.

The ordinance restricts retail uses to 10,000 square feet, except for
grocery stores, which may be as large as 25,000 square feet, prohibits
drive-through restaurants, limits building heights, caps the number of
parking spaces allowed, and sets design standards for the neighborhood.

Its purpose is to protect and maintain Brookside's small-scale,
neighborhood-serving businesses and pedestrian nature. The ordinance
specifies that auto-dependent businesses that serve a larger
geographical area are inappropriate for the district.

"We need to build and sustain healthy neighborhoods," said Councilman
Jim Rowland, who represents Brookside and sponsored the measure. As a
result of his efforts, Rowland was appointed the Grand Marshall of the
St. Patrick's Day parade for the Brookside area of Kansas City and was
nominated to receive an award from the Historic Kansas City Foundation.

Concern over the future of this historically significant business
district began to surface in the early 1990s as rising rents forced out
a number of long-time merchants. Then in 1998, much of the district was
purchased by an out-of-state real estate developer, Highwoods
Properties, Inc., whom residents feared would redevelop the area into a
large-scale shopping center.

The evening before the Planning Commission was to vote on the ordinance,
more than 300 Brookside residents met at a local church to show their
support.

Although the ordinance will keep larger chains out, it does not prevent
smaller, more architecturally sensitive chains from locating in
Brookside. This is a growing concern to residents, who recently
protested the closing of a locally owned gas station that Highwoods
planned to replace with a Starbucks coffeeshop.

Several communities have limited the proliferation of smaller chains
through formula business ordinances (see "Coronado" story below).

--The Brookside ordinance is available on the New Rules web site at
http://www.newrules.org/retail/brookside.html


CORONADO, CAL. ORDINANCE CURBS "FORMULA" RETAIL

In December, the city of Coronado, Cal. adopted an ordinance restricting
the proliferation of formula retail businesses. The ordinance notes that
the unregulated addition of such businesses would frustrate the city's
goal of maintaining a unique and diverse retail base, and limit
opportunities for small, local retailers.

Formula retail businesses are defined as those "required by contractual
or other arrangement to maintain any of the following: standardized. . .
array of services and/or merchandise, trademark, logo, service mark,
symbol, decor, architecture, layout, uniform, or similar standardized
feature."

The ordinance requires that formula retail businesses obtain a special
use permit from the city. Approval hinges on demonstrating that the
store will contribute to an appropriate balance of local, regional, or
national-based businesses and appropriate balance of small, medium, and
large-sized businesses. Formula businesses must be compatible with
surrounding uses and occupy no more than 50 linear feet of street
frontage.

Coronado, an island community of 20,000 in southern California, already
limits the number of formula restaurants allowed in the city to ten.

-- Coronado's ordinance, as well as other examples of formula business
restrictions, can be found on the New Rules web site at
http://www.newrules.org/retail/formula.html.


WISCONSIN LAWMAKERS SEEK TO LIMIT BIG BOX SUBSIDIES

Two state legislators are preparing a bill to modify Wisconsin's tax
increment financing (TIF) law that will likely limit the use of TIF for
retail development projects.

"I am concerned about the inappropriate use of TIF districts to
subsidize two kinds of development. The first is development that would
have occurred anyway. The other is big box retail development," says
Rep. Peter Bock (D-Milwaukee).

Bock and Rep. Michael Lehman (R-Hartford) are drafting a bill based on
recommendations issued last year by the Governor's Working Group on TIF.
The task force was appointed by Governor Tommy Thompson in response to
growing criticism of the state's TIF laws.

Under TIF, a city may designate an area in need of redevelopment and
freeze the tax assessment on properties within the designated district.
The city then pays for infrastructure improvements to attract new
businesses. The subsequent increase in the tax base (the "increment") is
used to pay off the bonds, after which the full value of the land and
property returns to the tax roles. In Wisconsin, the process can take as
long as 23 years. Many states employ some form of TIF.

TIF was intended to help redevelop blighted or neglected properties in
urban areas. Critics contend, however, that cities are increasingly
using TIF to subsidize the development of open space on the edges of
cities and towns.

In a 1999 report, 1000 Friends of Wisconsin found that nearly half of
the 661 active TIF districts in the state involved development of open
space. Many TIF districts were being used to subsidize big box retail
stores. In Baraboo, for example, city officials turned a cornfield and
an old apple orchard into a TIF district in order to finance a Wal-Mart.
The town of Oconomowoc spent nearly $20 million under TIF helping Target
build a distribution center.

Subsidizing retail development is a particularly poor use of tax
dollars. Unlike other kinds of development, new retail stores do not
generate new wealth. They simply shift consumer spending from one part
of town to another. For every job and tax dollar gained from the new
development, there will be a job and tax dollar lost at existing
businesses.

According to the 1000 Friends report, ten small to medium-sized grocery
stores closed in Madison after the city used TIF to subsidize the
construction of a new warehouse food chain.

The legislation being drafted by Reps. Bock and Lehman would incorporate
two policy changes recommended by the Governor's task force. One would
prohibit the use of TIF for projects that are predominantly retail. The
other would restrict the use of TIF for developing open space.

The reforms are supported by 1000 Friends and the Wisconsin Towns
Association, which represents more than 1,200 of the state's towns.
Wisconsin's other municipal association, the League of Municipalities,
which represents 190 cities and 378 villages, has sided with real estate
developers in opposing the changes.

-- 1000 Friends of Wisconsin's report, "Wisconsin's Tax Increment
Finance Law: Lending a Hand to Blighted Areas or Turning Cornfields into
Parking Lots?" can be found under "Legislative Initiatives" on the
group's web site at http://www.1kfriends.org.
-- For more on the Governor's Working Group on TIF, including its final
report, see http://www.dor.state.wi.us/html/tifgrpst.html.


III. LOCAL BATTLES

MADISON RESIDENTS SAY NO TO WALGREENS, PUSH ALTERNATIVES

Residents of a Madison neighborhood were shocked to learn in early
December that a 20-year-old local grocery store would be closing its
doors. Ken Kopp, owner of Ken Kopp's Fine Foods on Monroe Street, one of
the last independent grocery stores in the city, announced he was
retiring. Unable to find a buyer for the grocery business, Kopp planned
to sell the property to a developer who intended to build a 14,000
square foot drive-through Walgreens.

It was bad news all around. Kopp's had long been the neighborhood's
gathering spot. The local alderman referred to it as his second office.
Walgreens, moreover, was a decidedly unwelcome addition to a
neighborhood full of small, locally owned businesses, including two
community pharmacies.

"This neighborhood offers the benefits of connection: to family, to
neighbors, to community," notes Jane Riley of the Dudgeon-Monroe
Neighborhood Association. A distant corporation like Walgreens, she
contends, has no connection to the daily needs of the area.

Ken Kopp's closing was soon the talk of the neighborhood and much of the
city. It pushed the on-going presidential election off the front pages
and drew numerous letters to the editor. One resident hung a "No
Walgreens" banner on his fence.

The area's two aldermen, Ken Golden and Matt Sloan, organized a
neighborhood meeting. More than 350 people turned out. The meeting began
with a review of the Walgreens proposal and ended with a discussion of
possible alternatives.

After the meeting, three area neighborhood associations---Regent, Vilas,
and Dudgeon-Monroe---formed a working committee to explore options for
the site and coordinate a pledge drive. Neighbors have pledged $100,000
to date to fund an alternative development.

In February, Ken Kopp announced that the deal with the Walgreens
developer was off. His decision was based on the sentiment of the
neighborhood and concerns that the city would not approve Walgreens due
to traffic issues.

Kopp is now accepting proposals to purchase and redevelop the site. He
plans to make a decision by March 30.

One proposal involves expanding and moving the local library branch to
the site. Other proposals would maintain the location for food retailing
(the site has been home to a series of grocery stores since 1945). The
owner of the former Madison Sourdough Company, for example, has
suggested an emporium that would house several artisan food shops. Many
in the neighborhood hope the site will be sold to the newly formed
Monroe Street Grocery Cooperative.

-- For more information visit the Dudgeon-Monroe Neighborhood
Association's web site at http://www.dmna.org.


IKEA BACKS OUT OF NEW ROCHELLE

In the last issue of this Bulletin, we reported on a massive citizen
effort in New Rochelle, New York to block a 300,000 square foot Ikea
furniture superstore. In late January, Ikea and the city jointly
announced that they would drop the project.

Although the press release issued by Mayor Tim Idoni, who strongly
favored the chain, focused on certain unresolvable traffic issues,
opponents contend that the organized and sustained citizen opposition
ultimately led to the project's demise.

The announcement provides at least a temporary reprieve for the City
Park neighborhood, which was slated to be demolished by the city to make
way for Ikea. The 16 acres to be razed included 26 local businesses and
the homes of 160 residents. In his press release, Mayor Idoni says the
city remains committed to "redeveloping [this] blighted area" to
generate new tax revenue.

-- For more on the New Rochelle fight see the January 2001 issue of this
Bulletin at http://www.newrules.org/hta/hta0101.htm.
-- This is just one of several victories in the last two months for
communities fighting big box retailers. See Sprawl-Busters at
http://www.sprawl-busters.com/newsflash.html for more.


PETOSKEY'S LOCAL BUSINESSES FIGHT MASSIVE RETAIL DEVELOPMENT

Located on Lake Michigan, the small town of Petoskey in northern
Michigan draws thousands of visitors every year. They come for the
spectacular scenery and for an opportunity to experience what many
communities have long since lost: a vibrant downtown.

Renowned for its distinctive character and century-old buildings,
downtown Petoskey is more than a quaint destination for tourists. Its a
place that serves the everyday needs of residents. There's a grocery
store, hardware dealer, bookshop, florist, and pharmacy. All are locally
owned.

A major big box retail development under consideration in a neighboring
township, however, has threatened downtown Petoskey's future. "I fear
that this may be the end of the downtown as we know it. We will have
more seasonal businesses, and lose Penney's in the downtown, the
hardware store will be stretched, and so will this bookstore," contends
Julie Norcross, owner of McLean & Eakin Booksellers.

Norcross has joined other downtown merchants and residents in an effort
to block the 400,000 square foot retail development in nearby Bear Creek
Township. The development is slated for 90 acres currently zoned
residential and farm-forest. It would include several big boxes, as well
as smaller-scale chain stores. Combined, these stores would be larger
than the entire downtown. The city and surrounding county are home just
25,000 residents.

An economic impact analysis supplied by the developer contends that the
region can support an additional 500,000 square feet of retail space
with little or no impact on existing retailers. The developer argues
that the new center will serve as a regional shopping destination,
attracting shoppers from a wide area and therefore having only a
marginal impact on the downtown.

Studies in Iowa and elsewhere, however, indicate that the ability of new
superstores to draw regional shoppers is short-lived at best. In
tracking Wal-Mart's impact on Iowa towns, Dr. Kenneth Stone has found
that the host community's overall retail sales do increase initially as
a result of attracting shoppers from a larger area.

After a few years, however, sales level off and then begin to decline.
One in four of the host towns actually ended up with a smaller retail
sales base than they had prior to Wal-Mart's arrival. In the end, most
of Wal-Mart's sales came, not from regional shoppers, but directly at
the expense of existing local retailers, many of which were forced to
close.

What may prove to be even more of an economic concern, according to
Norcross, is the impact the development will have on tourism. "Why would
people travel to see the same place that they have in their own
backyard?" she asks.

That's one of several major issues raised by Gourdie, Fraser &
Associates, which was asked by Bear Creek Township to review the
developer's economic analysis. "Changing the retail focus from unique
specialty retailers. . .  in traditional, walkable shopping areas to
national chains in power centers. . . may contribute to eroding the
qualities that attract tourism dollars in the first place," the review
notes.

The retail development conflicts with the goals outlined in the
comprehensive plans of all three affected communities---Petoskey, Bear
Creek, and adjacent Resort Township---as well as the county's master
plan. All discuss the need to control growth and protect the area's
rural nature.

The debate over the development has revealed a strong need for regional
cooperation on development issues. Although the impact of the retail
complex will be felt in three communities, the region has no mechanism
for joint review of large-scale developments. Instead the decision rests
entirely with the Bear Creek Township Board, which must re-zone the land
before the developer can proceed.

-- To learn more about regional review of large-scale developments,
check out the Cape Cod Commission and Vermont's Act 250 on the New Rules
web site at http://www.newrules.org/retail/impact.html.


IV.  ANTITRUST

TRIAL TO BEGIN IN ANTITRUST SUIT AGAINST BOOKSTORE CHAINS

After more than two years in the discovery phase, a trial is finally
scheduled to begin on April 9 in the antitrust lawsuit brought by the
American Booksellers Association (ABA) and more than 20 individual
bookstores against Barnes & Noble and Borders Books.

The lawsuit, filed in federal court in California, charges the two
chains with using their market clout to bully publishers into providing
"secret, discriminatory, and illegal" discounts not made available to
independent bookstores, even on orders of the same volume. These
discounts in turn helped fuel the companies' rapid expansion in the last
decade.

-- To follow the trial, visit the ABA's web site at
http://www.bookweb.org for regular updates or sign-up for the ABA
Litigation Update, a special daily email publication that will track the
trial, by sending email to info@bookweb.org with "Opt-in to ABA Legal
Update" in the subject line.
-- For background on the lawsuit, see the New Rules web site at
http://www.newrules.org/retail/antiprice.html.



Copyright 2001 by the Institute for Local Self-Reliance.

No portion of this bulletin, except for brief quotations with
attribution, may be reproduced or utilized in any form without
permission from the Institute for Local Self-Reliance, 1313 5th Street
SE, Minneapolis MN 55414 - Tel: 612-379-3815 - Fax: 612-379-3920 ? Web:
http://www.ilsr.org.

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