Bringing Home The Stores
Southeast D.C. Needs the Planned Skyland Shopping Center

By Margaret Webb Pressler
Washington Post Staff Writer
Sunday, June 22, 2003

When I heard about the ambitious plans the city and a local developer have for the Skyland Shopping Center in the Hillcrest section of Southeast Washington, I had to see it. What, I wondered, could possibly justify the huge effort that is being undertaken to remake it into a relatively simple neighborhood shopping center? In the suburbs, these things just seem to pop up, with such regularity that residents take them for granted.

Then I walked around Skyland, a hodgepodge of service stores and stereotypically urban retail -- liquor store, athletic store, laundromat. A group of men loitered outside the CVS. The parking lot was disjointed, broken and poorly lighted. Yet here was this vast tract of land in a grossly underserved market. It began to make sense that those who envision a modern-day shopping center are convinced they are doing the right thing.

“It will give to the community the other retail needs that right now force a lot of these people to drive into Maryland,” said Gary D. Rappaport, the developer working on the project with several public and private partners.

It’s not that there’s nothing worthwhile at Skyland now. Indeed, many residents in this neighborhood rely on its small retail tenants. But the place is not welcoming, it doesn’t feel particularly safe, and there’s far more that it doesn’t have than it does, especially compared with its suburban counterparts.

There are 85,000 people living around Skyland, with a median household income of $35,000. It is certainly not a rich neighborhood, but the city estimates that residents in that part of the city spend about $470 million a year on their retail purchases. Currently, only 33 percent of that is spent in their own community -- for everything else, they have to drive a lot farther, probably to Maryland. There is no home-improvement store, only one large supermarket, inadequate choices for apparel and virtually no place to buy a TV or video camera.

That is just not the way it should be. It’s unfair to the residents and a loss for D.C. coffers.
But what do you do about it? Cities across the country have been wrestling with such vexing retail inequities in their underserved neighborhoods, particularly those with heavy minority populations (nearly 95 percent in Hillcrest). It has been a near-constant complaint for at least 15 years that pockets of the Washington area were being bypassed as national retailers expanded feverishly all around them.

Throughout the 1990s, when I covered the retail industry, brokers who peddled real estate to retailers would explain that most national chains didn’t want to be in areas with large minority populations or high poverty rates because they thought it was harder to find good employees and they expected more theft and higher security costs. Retailers wanted to be in shopping centers where they could stick with their standard layouts, offer enough parking, keep their costs down and never think outside the big box. And there were plenty of such opportunities.

Now, though, many of those same companies have saturated the suburbs and are looking for more growth, so they are turning inward and increasingly bending their prototypes to fit unusual settings. At the same time, cities are becoming more savvy about recruiting retailers with various financing incentives and public-private partnerships.

“I think the mayor has really made this a clear top priority, in terms of making certain that east of the river sees its fair share of redevelopment, as the west of the river has seen,” said Greg Jeffries, senior development director of the National Capital Revitalization Corp., the quasi-public organization that is overseeing several redevelopment projects around the city.

Even with a mayor’s blessing, though, these projects can be enormously complex. At Skyland, the biggest problem NCRC faces is assembling the land. The new Skyland’s 11½ acres of developed property abutting five acres of woodland are actually 18 parcels with 15 different owners. All of that has to be bought.

Jeffries said the city will negotiate to buy out the owners, but if some won’t sell, that won’t stop the project. “Clearly our organization does have the ability to exercise eminent domain,” Jeffries said. “That is not something we’re looking at at this present time. But as a last-ditch effort it may be something that we would consider.”

Once the land is assembled, the city would negotiate a sale to Rappaport, the developer, who is already trying to line up retailers. He is convinced that getting national tenants won’t be a problem, and he is looking at some combination of a grocery store, a home-improvement center, an apparel retailer, a discount store, an electronics store, small service retail and a couple of sit-down restaurants along the lines of TGI Friday’s.
“The most important thing they need is they need to believe it’s real,” Rappaport said of the retailers that are interested. With the mayor’s word on the line, several potential tenants are doing sophisticated analyses of the market right now, Rappaport said, to determine whether they want to be in Skyland.

The impact would be enormous. Jeffries points out that the project probably would triple employment in the center, to about 400 people -- a much-needed boost in a community with a 10 percent unemployment rate. Sales tax receipts might also triple, and property taxes will go up, too. “Bringing in large-scale anchors with highly recognizable names, obviously the sales generation will really jump considerably,” he said.

Even if everything goes as well as possible, the center wouldn’t be built until 2005 or 2006. And there are many hurdles ahead. Current landowners should get a fair deal, even if they must sell unwillingly. Current tenants should have a crack at the center -- and Rappaport says some will (although not the liquor store). The community, already a partner in the project through the Marshall Heights Citizens Association, must continue to press for the type of retail it needs. The mayor must not lose his resolve. Rappaport must stick to the center and help guide it, as he has done with many successful suburban shopping centers nationwide, as well as a tidy little retail development at Eighth and H streets NE, which he’s owned since 1987.

The retailers, too, need to think hard about ways they can adapt to markets like Hillcrest. Big national chains don’t like to break the mold of their typical stores. When they do, they sometimes have difficulty tweaking their business models to allow for unusual layouts or locations or a different mix of merchandise. It’s time they start trying harder.

At Skyland, big retailers might find business is a bit more expensive, with higher insurance rates and maintenance costs, among other things. It might take a little longer to get a stable, reliable workforce in place than it would in more suburban locations. But whatever changes the retailers have to make to their approach and their expectations, they should. The residents around Skyland -- even if they don’t fit the typical shopper profile for most big retailers -- are consumers with money to spend. They support major chain stores now, by driving some distance to them. One has to assume they would patronize those chains even more if it were more convenient.