Mayor wants chain stores to keep out
Steven Fulop, the mayor of Jersey City, NJ, is a big fan of local businesses but not large chain stores. Before the beginning of the last holiday season, Mr. Fulop asked locals to stay home on Thanksgiving Day to enjoy their families and then come to his city’s neighborhoods to do their shopping over the holiday weekend. Now, he’s throwing his support behind a measure that would limit the amount of space landlords could rent to chain stores in his city’s downtown neighborhoods.
According to a Wall Street Journal report, new rules that Mr. Fulop intends to propose at a City Council meeting this evening would limit 30 percent of commercial space to businesses that have 10 other properties within 300 miles from Jersey City, which sits across the Hudson River from Manhattan.
Jersey City, as the Journal report points out, is not the first municipality seeking to support local businesses as chain outlets pop up all over the landscape. Nantucket, MA and San Francisco have rules limiting chains in certain areas. Some claim chain store expansion has helped to erode the unique identities of towns.
"We don’t want every retail space to become a Gap, TGI Fridays or a Starbucks," Mr. Fulop told the Journal.
Mr. Fulop, who worked for Goldman Sachs before entering politics, faces critics who say the market should decide and landlords should be able to rent space to whatever business they choose.
Discussion Questions
Do you agree or disagree that the expansion of chain stores has been detrimental to the character of towns and cities across the U.S.? Should towns limit the types of stores and restaurants that open in neighborhoods or should it be left to the market?
I don’t think the amount of retail space for a store is the only issue. Apparently Mr. Fulop is not familiar with omnichannel trends and BOPIS. What would happen if Amazon rented a small space in Jersey City for their new pop-up store for Prime members?
The historic character of some downtowns may justify the desire to keep out national chains in some cases. But for the most part this type of limitation smacks of self-preservation, not historic preservation. And it’s arguable that a well-curated selection of national retailers can draw traffic to the local merchants, too.
It’s reminiscent of the argument that Walmart affected the survival rate of small-town retail everywhere it went. (And now Amazon is the most popular villain.) This may be true, but it has as much to do with local businesses that were vulnerable in the first place due to their own operating weaknesses.
The market is going to perform a great deal more effectively than the bulk of “town fathers.” I’ve had the pleasure of living in a number of suburban areas, as well as big cities across the U.S.
Consistently, when government steps in, developers stall out. Owners of real estate parcels quickly succumb to finding a renter/buyer, and before you know it, we have more real estate agencies or two too many banks in a four-block area.
Mr. Fulop learned the benefit of having government regulation at Goldman Sachs to protect the special interests. His carrying this thinking over to Jersey City will not be of benefit to that downtown area.
There is no easy answer to this question. Chain stores frequently offer the lower prices that consumers desire, and with many now have exclusive product lines. Local stores support the local population in ways that chain stores don’t, from local ownership to closer ties with the community. I’ve yet to see a regulatory or statutory formula that worked well and kept everyone satisfied.
I’m seeing a lawsuit in their future. 🙂
Personally, I don’t like the idea of national chains overtaking local shopping districts. To me it is the cloning of America. It is cultural atrophy. However, express laws to make this difficult strike me a government over-reach (small government, in this case). If there are historical districts, let’s preserve them. But, beyond that, it is just shopping.
Living in Connecticut 20 years ago I saw Main Street in Westport transition from interesting local merchants to all national chains. There was no longer a difference in walking down Main Street or being in a mall. It was sad, but it didn’t stop the business on Main Street. In terms of foot traffic, I observed it probably increased by 50 percent. That is what the people want I guess.
Dick Seesel hit it on the head. This is about self-preservation and a desire to preserve the status quo. And I’d be willing to wager the sentiment extends beyond retailing in Mayor Fulop’s fair city. How is the city’s discrimination against chain stores (and chain store employees) different than the discrimination critics decry in “religious freedom” laws? If the right to practice a religion is limited at selective exclusion then isn’t a government’s right limited at the same place?
You can not build a fence to keep a Walmart out of your area, as the online ordering system and Amazon have taken care of that. All you can do is make sure that as a small business owner you do it better than the big stores, in terms of service and signature gotta-have items at a fair price.
This will not guarantee anything, unless you add in all the intangibles for success i.e., outstanding service, community involvement, networking, social media presence, killer deals every week to draw them in and making sure you follow up with continuous training for your employees.
No assurances for long term survival, but chances of success are much greater if you follow a system that keeps you in the spotlight in a positive way.
If this were 1995, I’d think this would have traction. Quite simply, there just isn’t a need for any big box stores and their threat is in how many they will close soon, not how many they will open.
As Walmart showed us years ago, what you want and the reality of what is are much different. We may want to preserve local businesses. But we can not do it at the expense of those looking for lower prices and better choices. I am a proponent of local businesses and the downtown area. But sadly, the downtown area has moved to the ‘burbs. Some of the ‘burbs are recreating the downtown feel. But it is being done with national chains as the occupants.
When Mel Brooks once said “It’s good to be the king!” he neglected to mention it is only good for the king. Mr. Fulop needs to focus on a few other issues in the merry, merry land of Jersey City before getting into selection mode for the companies fortunate to be selected as tax payers and employers in his kingdom. I applaud his efforts for those that got him where he is, but some attention to the ones paying for the majority of what needs to be done is not a bad thing.
I think it’s myopic.
Long term, it will be a disservice to the community. There are benefits chains bring to the community and labor pool that indie stores can’t match. Unfortunately, it is ultimately the town’s decision and often political posturing will win over reason.
While I am all for local retail and small business, this kind of blunt instrument government intervention is not the way to help it thrive. Just as cities with rent control see the quality of their housing stock deteriorate, I think this move by Jersey City would eventually raise the vacancy rate in the areas where limits were imposed.
Rather stacking the deck here, aren’t we? Of course chains aren’t good for a town’s “character,” but that’s only a small part of what should be asked. What about sales tax revenue, tenant financial strength, and the simple ability of people to shop where they (apparently) want to?
Mr. Fulop is traveling a well trodden path—opposition to chains has been around as long as chains have—but traditionally the opposition has come from the smaller merchants themselves, for obvious reasons. We’ll have to guess what the full agenda is here.
With the exception of Millennials, I’d say most of us are tired of large chains infiltrating every square inch of concrete in our neighborhoods. No personal touch or care towards the consumer; nor any real knowledge of their products from those who work there.
Privately owned neighborhoods from the “day” knew their customers, acknowledged them and had product knowledge of items they sold. It was warm and friendly and fit into the landscape of the area and neighborhood. It is also more prone to bring in variations of cultures, products, enticing foods and goods that we can all enjoy. So tired of the canned and sterile environments of big chain stores; especially Walmart.
Steve Fulop is on the right track. Start putting the money in the hands of locals and start up entrepreneurs who want something of their own, not to support the big bucks of corporate board members.
Perhaps if the mayor did more to encourage small business, rather than discourage business….
Unfortunately, many property owners in in business districts are not professional landlords, and lack the financial capability to fund the remodeling and upgrades necessary to build out tenant spaces for independent businesses that also lack sufficient capital for the build out.
Vacant buildings are not good for business.
Once upon a time, Americans believed in freedom. We rejected the ability of government to limit who was allowed to live in a certain part of town, or attend a particular school, or open a business.
We should reject that now, too.
Ultimately the people who live in these communities decide on what happens. Whatever they decide, then that’s what is best. Protecting and preserving communities is well meaning. Eventually residents get annoyed if local businesses then fall asleep at the wheel and have high prices, poor service, and low wages. When chain retailers do open and run them out, consumers often realize just how poorly those small businesses were run. We should never subsidize mediocrity. Like the old saying goes, be careful who you vote for.
Agree completely! Citizens in towns that want to increase the quality of life and property values should insist that the local economy is well-guarded. I understand the historic character and local flavor but it is the money that makes it all possible in the end. Otherwise you end up with a lot of half-starts and starving artists who can’t sustain.