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Retail growth outpaces what region's population can bear, studies say; new plaza in one community might create blight in another
By Rick Armon
Beacon Journal staff writer
Published on Sunday, Jul 06, 2008
When the first shopping plazas started opening in Montrose about 20 years ago, some people wondered if the new retail district could survive.
Montrose — the suburban crossroads of Fairlawn and Bath and Copley townships — was undeveloped and sparsely populated. And the Akron region already had existing shopping meccas in several malls and strip plazas.
Of course, that concern seems silly now. Montrose emerged as one of the area's leading shopping districts with hundreds of national retailers, chain stores, restaurants and hotels.
With shopping areas opening in recent years in Brimfield Township, Green, Hudson and Wadsworth, and others proposed for Akron, Boston Heights and Twinsburg, the question about whether the region can sustain its existing and planned retail projects is again being asked.
Especially when there is a finite number of shoppers in Northeast Ohio thanks to stagnant population growth.
Two studies — one by the Cuyahoga County Planning Commission in 2000 and a follow-up done by students at Cleveland State University last year — concluded what many consider obvious: The Cleveland market, including northern Summit County, has too much retail for its population.
But many retailers, developers and government leaders don't agree. (Some privately joke that the area isn't over-retailed, just under-populated.)
Shopping districts are following the population that has migrated from urban centers into the suburbs and beyond, they said. With that shift, there will be natural winners — Montrose — and losers — Rolling Acres Mall in southwest Akron.
''You have to look at the retail landscape as a dynamic system,'' said Michael Marchetta, vice president of the Dan Marchetta Construction Co., which built that first plaza in Montrose. ''There are areas that are always expanding and areas that are always contracting.''
Winners vs. losers
The Akron area has seen plenty of both in the last few years.
In Green, DeVille Developments of Jackson Township built Arlington Ridge Marketplace along Arlington Road. The big anchor in the strip mall is Target Corp.
In Cuyahoga Falls, the State Road Plaza became nearly vacant. The city bought the blighted complex earlier this year for $10.2 million.
In Wadsworth, Brewer Development of Dallas constructed Wadsworth Crossings, a retail development along Interstate 76 that includes a Lowe's, Target and Kohl's.
In Akron, the Rolling Acres Mall has struggled and is nearly vacant. The owner is shopping for a buyer.
In Brimfield Township, 3D Real Estate Partners of Independence built Cascades of Brimfield, a retail, commercial and residential complex along Interstate 76. The complex includes a Wal-Mart Supercenter and Lowe's.
In North Randall in southern Cuyahoga County, the Randall Park Mall closed this year.
And in downtown Hudson, Thomas Murdough created First & Main, an open-air mall filled with upscale shops and restaurants.
''What you are seeing now is the natural survival of the fittest,'' said Dale Lewison, professor of marketing at the University of Akron and director of the Taylor Institute for Direct Marketing. ''The best stores that fit the existing needs and preferences of the consumers will survive.''
Projects, vacancies grow
There's no shortage of big-scale retail projects on the drawing board.
A University Hospitals plastic surgeon earlier this year proposed the $100 million Twinsburg Fashion Place, an outdoor shopping district in Twinsburg and Twinsburg Township.
A Cleveland developer wants to construct a retail and office complex along state Route 8 in Boston Heights.
And the plans to build a new worldwide headquarters for Goodyear Tire & Rubber Co. in east Akron include a major, as of yet undetermined, retail component. Officials had hoped for a big splashy tourist draw such as Bass Pro Shops.
Developers and government leaders often tout the increased number of jobs and tax dollars coming into the community with new retail projects. But they don't mention that those shoppers and their dollars have to come from somewhere — often the retail district in a neighboring community.
That leaves empty storefronts.
Summit County has 2,141 retail stores and 33.9 million square feet of retail space, according to the CoStar Group Inc., a leading provider of commercial real estate information/marketing services to the commercial real estate industry.
Seven percent, or 2.4 million square feet, is vacant — an average amount in the industry, according to real estate experts.
The vacant Kmarts and Tops grocery stores can add up quickly, said Jennifer Fernandez, an account executive with NAI Cummins, a commercial real estate company in Akron. But she added that she doesn't believe there's an overabundance of vacant retail here.
''It depends on the area,'' she said.
Laurel Gress, a Wadsworth resident who works as a bookkeeper at a downtown Akron law firm, said she doesn't understand why developers keep building stores when many are sitting vacant now.
''I don't think they even use their heads,'' said Gress, a member of the Western Reserve Land Conservancy, a nonprofit conservation group. ''It's not just retail. It's development in general.
''Businesses go out of business all the time. And instead of renovating old buildings, they build new ones.''
The International Council of Shopping Centers is predicting that 5,770 chain stores will close nationwide this year, a 25 percent increase over last year.
Prediction proves true
The Cuyahoga County Planning Commission concluded in 2000 that the Cleveland market had too many stores for its population.
The Northeast Ohio Regional Retail Analysis report examined Cuyahoga, Geauga, Lake, Lorain, Medina and Portage counties, and the northern half of Summit County. (Summit County leaders declined to participate so the entire county was not included.)
The study concluded that the ''region is saturated in the convenience and shopping goods categories by more than 6 million square feet.'' If developers continued to build retail complexes, it ''could prove to be a serious threat to existing retail centers throughout the region,'' the study added.
However, that's just what happened, according to a follow-up study done by Cleveland State students last year.
The study says there was a surplus of nearly 22.5 million square feet of retail last year in the region. (A surplus doesn't mean stores are struggling.)
''Unchecked retail development on the region's periphery has continued at the expense of the core,'' the authors said in the report, Northeast Ohio Retail Development Impacts: Policy Implications for a Sustainable Community Future. ''Aging infrastructure goes without maintenance, surface runoff creates flooding and other problems, old retail facilities sit vacant, and Clevelanders spend more time idling in their cars, increasing physical health problems and polluting the air.''
Evaluating area
The ultimate decision, though, lies with retailers.
''It really doesn't matter whether you or I think [the region is] over-retailed,'' said John Vavrus, the manager and leasing agent at Summit Mall in Fairlawn. ''The decision whether it is or not is going to be made by the retailers.
''They do extensive research before they make any commitments to an area or location. If they feel that there's no potential for the business they need to generate, there's no way a developer will be able to bring a project out of the ground.''
Fernandez agreed, saying retailers conduct thorough demographic studies looking at everything from household income to age before moving into a community.
Traditional malls are facing increased competition not only from new ''lifestyle'' outdoor malls and other retail districts, but also online retailers. They must change or die, analysts said.
Unlike many other traditional malls, Summit Mall is reinventing itself by adding an outdoor component and popular stores and restaurants such as Cold Water Creek, Ann Taylor and Bravo.
''When I started working in retail many decades ago, I learned one thing that I've never forgotten,'' Vavrus said. ''There was a saying that retail is change. When you think about it, that's all retail is. You buy clothing . . . because the styles change and the colors change.
''Who knows how we will change five years from now. But again, it's all about change.''
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.
When the first shopping plazas started opening in Montrose about 20 years ago, some people wondered if the new retail district could survive.
Get the full article here.
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