Mistakes Planners Make when Creating Retail Districts

* The following excerpt appeared originally in the March 2012 issue of Planning magazine; published by the American Planning Association.

Creating successful urban retail districts is a goal of planners and community leaders alike. But as Robert J. Gibbs points out in Principles of Urban Retail Planning and Development(2012; Wiley; 272 pp.; $80), planners may be hampered in that task by an overly romantic view of an ideal shopping area. Even in the best planned new urbanist developments, he points out, retail components often fail to live up to expectations.

….(Gibbs) explodes various myths about what makes a successful retail district and lists some of the common mistakes made by planners, business owners, and community leaders — failing to begin a project with a professional market analysis, for instance. He shies away from easy answers. While clearly in favor of the walkable retail districts that planners typically espouse, for instance, he concedes that they don’t always succeed financially.

Gibbs includes plenty of useful information on specifics such as parking. His book will be most useful to private-sector planners and those who work with public-private partnerships. But the material it contains will also be helpful to public planners dealing with zoning issues. — Ryan Smith”

Several of us here at UDG, have at one point in our lives, worked for real estate market analysts (in fact, we have several current clients that are in this line of business).  This is where we learned the value of conducting a market analysis for planning and development purposes.  Our backgrounds in GIS and Urban Planning provide us with a unique perspective on the concept of the market analysis.  We have seen more than our fair share of good and bad examples of market analysis.  If you are a city conducting a land use or comprehensive plan, it is in your best interest to include market analysis as part of the planning process.  In addition, you should thoroughly vet the analyst to make sure they understand what the goals and objectives of the plan are.  Traditional, boilerplate market analysis is not going to suffice.  Cities, and the spaces within a city, are unique.   The market analyst must be willing to approach their task as part of the entire planning team, which means they must be engaged in the process from start to finish.

Traditional market analysis does not address the goals of a land use or comprehensive plan.  There are two basic questions planners need to answer with respect to the market analysis:  1.  Is there a market and 2. how “much” should we plan for? Further, planners (and the public in general) may ask questions regarding “what it takes” to achieve the critical mass required to achieve the desired results.  For example, “how many households do we need to add, at varying income levels, to achieve the critical mass required to support a medium-sized grocery store?”

Geographic Information Systems (GIS) are the perfect tool for conducting this type of analysis and far too few analysts invest the time and money to employ a robust GIS to help them answer these spatial questions.  A GIS makes it much easier to visualize the current conditions as well as visualize future conditions – which is at the heart of the concept of planning.

Urban Decision Group has been fine tuning this very type of analysis into a service we call “Planning Market Analytics“.  Planning Market Analytics is specifically designed for informing  comprehensive or land-use plans.  Like a traditional market analysis, field observations are required but the observations must be targeted and focused on the goals at hand.  Our service focuses on a data-driven GIS model to produce predictive analytics via established methods such as Huff Modeling.

The Planning Market Analytics service is usually expensive because of its intended audience.  The audience for a traditional market analysis generally consists of developers and  financiers.  That group is looking for very specific price points, rents, and lease rates for defined product types like town homes or 2 bedroom apartments.  The planning audience, on the other hand, is focused on the larger picture.  They need to  know if a project has a  chance at being successful (is there a market?), how much space should be allocated, what infrastructure improvements will be necessary, etc.  Two different audiences require two difference approaches.

So if you’re a city, county, region or state that is engaging in city or regional planning, I agree with the letter writer above.  Do you your homework first.  It’s a nominal portion of the project cost that can literally save you millions on the back end.

If you would like more information on Planning Market Analytics and you live in North America, contact Urban Decision Group at 614-383-8447 or email Rick Stein at rstein at urbandecisiongroup.com.

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