Housing Complex

Even Moratorium Whisperings Chill Business Interest

For a few months now, Advisory Neighborhood Commission 6B has been thinking over how to keep a pleasant balance of retail and restaurants on the increasingly boozy Barracks Row. One of the tools for doing that is a moratorium on new liquor licenses, which a "Retail Mix Task Force" has explored through talking with representatives of other neighborhoods, as well as 8th Street SE business owners. The commissioner spearheading the effort, Norm Metzger, has been careful to qualify that they're not pushing for a moratorium–but prospective entrepreneurs have been spooked nonetheless.

"That's just a perception that's out there," said Barracks Row Main Street executive director Martin Smith, at a Monday evening meeting with landlords and business groups. In the last 60 to 90 days, Smith said, he's been hearing from realtors that people thinking about leasing space on the Row have been dissuaded by talk of a moratorium, as well as several liquor license protests. “They say, I don’t want to deal with that," Smith noted. 

Moreover, Smith added, even retail establishments interested in locating on 8th Street often ask if they can find a space in between two restaurants, since people waiting for tables will often stop in and shop.

Few know the competitive pressures of booze-serving businesses better than Dennis Bourgault, proprietor of the pet shop Chateau Animaux. Bourgault owned his building at 524 8th Street SE, until the revitalization of the neighborhood sent commercial property taxes skyrocketing 180 percent in one year, forcing him to sell (he's moving the business down to leased space in the 700 block). The building sat on the market for a year and a half, with no inquiries from people interested in retail–the eventual buyer is putting in two restaurants. And he knew he had to sell before any moratorium cut off that possibility. "If the rules change, we're screwed, frankly," Bourgault said.

The other danger of messing with alcohol regulations is the adverse effect it could have on the less prosperous reaches of Barracks Row. Only the northernmost blocks, closest to Pennsylvania Avenue, are really thriving–as you walk further south, foot traffic drops off dramatically (the Marine Barracks aren't much help, at least where commerce is concerned). That troubles landlord Myles Doherty, who has been trying to lease a building on the 700 block for over a year now after the previous occupant, an art gallery, couldn't even afford the $22 per square foot rent. Doherty says he's never put a restaurant in that space–they're more of a headache than retail tenants–but he might have to, since no one else wants to brave the sometimes-desolate location.

Besides, he points out, the restaurants are what led the area's revitalization in the first place. "They were the goose that laid the golden egg," he said.

Metzger quickly backpedaled on his blog yesterday, writing that the ANC "NEVER proposed" a moratorium. But moratoria are funny that way: They're a blunt instrument, even in concept. Lots of other tools exist to manage nightlife without stifling business growth, which on lower 8th Street especially is still fragile.

Comments

  1. #1

    You need something popular on the sourthern end of the strip to attract lots of residents. Like a strip club. Or bathhouse.

  2. #2

    And I laugh at Norm's description of the license protest as the only way to force a business to enter into a "Voluntary Agreement."

    Not to self: If you're forced into something via time-consuming and expensive pseudo-litigation, it can't be described as "voluntary."

  3. #3

    The revitalization is ongoing, and will continue south along 8th St, under the SE/SW Fwy bridge, and on to M St. A moratorium--even talk of a moratorium--is detrimental to the overall health of these people's neighborhood. It is not yet an established restaurant district in that most people in DC and in the surrounding area have not yet heard of it. Being as open as possible to all legitimate businesses for now is the only way that those who live near Barracks Row will eventually achieve their appropriate mix of retail. and restaurants.

    Neighborhood residents would do well to just buy a box of ear plugs. I use them every weekend--the Quiet Please! foam ear plugs are my favorite.

  4. #4

    Get rid of the stupid ANC's!

  5. #5

    Ironically, moratoriums on alcoholic beverage licensing do have the effect of supporting retail, because it puts a sort of brake on demand. Restaurants can outpay standard retail for rent, because they have much greater volume of sales and profit margin compared to traditional retail. (People eat every day, they don't buy stuff at a hardware store every day. and while margins on food are comparable to standard retail--except groceries, gross margins on alcohol are about 80%.)

    I think it's why there is still a hardware store on 17th Street NW for example, across from the Safeway. Otherwise that place would have been a restaurant a long time ago.

    Barracks Row though is a tough place for retail because it is perpindicular to the main pedestrian nearby areas (Pennsylvania Ave.), retail needs to be concentrated at least initially in the block right at the Metro, and trickle off (except for destination retail) as you go further down the corridor and away from the Metro, CVS, and Eastern Market.

    The thing is what is the "natural level" of restaurants where supply and demand are relatively equal. Because ideally new places that open don't come at the expense of the overall health of the district.

    I wonder about that for H Street. Unless somehow H Street is to become more like Bethesda or Shirlington as the restaurant destination for a relatively large restaurant retail trade area, and I think that's a stretch.

    WRT "retail mix" planning, of course I think it's a good idea. It's what I have worked on when I've done commercial district revitalization framework plans and it's a straightforward process.

    FWIW, I wrote a suggested retail mix outline for Florida Market as part of a submission to ANC6C and the Zoning Commission a couple years ago.

    http://urbanplacesandspaces.blogspot.com/2009/02/retail-planning-and-florida-market.html

    It's a model for what should be done in most commercial districts in the city, not just on 8th St. SE. (And the DC Retail Action Strategy does lay a framework for that in many of the city's commercial districts, although there isn't an implementation process.) It doesn't have an implementation plan, but it wasn't a commissioned study (meaning I didn't get paid to do it, and therefore lacked the motivation to do a full blown study).

  6. #6

    ANC 6B was wrong to protest new liquor licenses for Nooshi, Moby Dick and Pacifico on specious grounds. Claiming some magical "tipping point" or "saturation point" has been reached on 8th Street SE, without any data or evidence, is specious grounds for protesting a liquor license.

    Since November 2010, no new liquor license application has been approved on 8th Street north of the SE/SW freeway, and it looks and smells like a defacto liquor license moratorium is currently in place in ANC 6B. Time for ANC 6B to do something dramatic to dispell that perception, pronto.

  7. #7

    I am a resident living a block or so from 8th Street SE and was very dismayed to hear about the tactics being used and the irrational rationale being used to discourage new restaurants from coming in. I imagine that everyone agrees that a retail/restaurant mix is ideal - yet the solutions employed to get there are incredibly flawed. Instead of discouraging restaurants from coming to the neighborhood and increasing foot traffic and revenues there should be analysis on what can be done to lower rents and property taxes to provide incentives to those retail stores that cannot rely on food or liquor sales to cover their overhead.

    Similar flawed reasoning was utilized when the awful idea was proposed to redirect traffic down 7th Street SE from Pennsylvania Avenue SE, which would have undoubtedly driven residents from their homes, created a traffic jam that would deter people from coming to the neighborhood etc. Instead, more restaurants came and foot traffic and positive notoriety increased.

    I am not sure what qualifies someone to be on the ANC but I must say, there should be more stringent qualifications is such disastrous proposals keep gaining traction.

  8. #8

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