Then a Quizno's, now vacant.
Maybe soon a Lucky's Chicken.
Have you ever seen one of your favorite restaurants, one that seemed popular and busy, go out of business, with the owner explaining that the landlord raised the rent to an unaffordable level? And then watch the now vacant building sit empty for months or years with a "For Lease" sign out front? What's with that?
The fact that the building sits empty suggests that demand isn't high enough to justify the higher rent. You'd think classic economics would say that it's not in the building owner's self interest to raise the rent if the demand for space isn't there at that price point. Can anything be done to keep storefronts occupied and productive?
Answers to these questions come from an article from "The Harvard Joint Center for Housing Studies" (my reading sources contain multitudes ;-).
The simple explanation of what's at work here is, "a primary driver of retail vacancy in dense urban areas is the fact that landlords are willing to forgo rents today in order to preserve the option to lease their space to someone else (who might pay higher rents) tomorrow." In the study, 58% of the leases studied have ten-year terms, so landlords have an incentive to wait quite a long time until just the right tenant comes along who is willing, and able, to pay higher rents for a long time.
As for what can be done about the situation, one sometimes offered solution is a so-called vacancy tax on empty storefronts. After all, the city loses sales taxes when a store sits empty, but the cost of providing fire and police protection stays roughly the same. A vacancy tax decreases the incentive for landlords to wait for that higher-rent-paying tenant. The State of New York is considering such a tax. "The Harvard Joint Center for Housing Studies" has a warning: "a vacancy tax would decrease the vacancy rate and rents but would lower tenant quality and lead to faster churn."
The article offers this as a reason why all this matters: "Although interdisciplinary literature finds that neighborhoods with a variety of retail amenities tend to be safer, healthier, and wealthier, this literature is nearly silent on how these retail amenities come to exist and thrive. In reality, physical retail amenities rely heavily on the built environment, which is mostly owned and managed by commercial landlords."
So what's important for a healthy neighborhood is the "built environment," that is, the bones of a city, not necessarily the current tenants. The takeaway for me is that the City of Richardson needs to focus on the "built environment" and the rest will follow. Quit worrying about attracting the latest popular tenant, who too often for my taste seems to be a drive-through fast-food chicken vendor like bb.q Chicken, Chick-fil-A, Raising Cane's, El Pollo Loco, KFC, No.1 Plus Chicken, or the under-construction Popeye's and Lucky Chicken, all of which are within walking distance of Richardson Square in east Richardson, not that anyone walks in that neighborhood. The "built environment" is too car-centric. And that's what I learned today. (Correction: two of those fast-food chicken restaurants do not offer drive-through service).
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