DOWNTOWNS STRUGGLE TO KEEP LOCAL RETAILERS
West Palm, Delray at crossroads with big retailers in wings.
Thomas Rebhandl has big plans for City Center Pharmacy, a shop he opened 14 years ago at 416 Clematis St.
For one, he hopes to buy the 76-year-old building, which occupies a busy spot across from West Palm Beach’s library and City Hall. Inside the pharmacy, he wants to transform the handsome, darkwood bar that sits unused along a side wall into an old-school soda fountain.
But word that a CVS or 7-Eleven might intersperse with Clematis Street’s locally owned shops and eateries has West Palm residents wondering whether the convenience of chain stores would rob downtown’s signature strip of the charm of stores such as Rebhandl’s.
He has no doubt what would happen. For starters, how could he buy the building and hope to make mortgage payments when a national chain is competing three doors down? “They’re going to crush me, most definitely.”
Downtown Delray Beach stands at a similar crossroads: A new study shows it can support large retailers that would bring in millions of dollars a year, but city leaders say to allow big-box stores could crush the charm of Atlantic Avenue.
Both cities are struggling with how to maintain their identities in the face of national and local retail realities.
“There’s this struggle to understand: How much can we shape our community with regulation, versus market forces,” said Raphael Clemente, executive director of the Downtown Development Authority. “We can write any regulatory guideline we want but does the market actually allow that to happen?”
As it stands, West Palm Beach allows drugstores or convenience stores downtown, though a 2012 ordinance bans stores from selling wine or beer, as both those chains do, Clemente said. Two stores are grandfathered in — one of them City Center Pharmacy — but Rebhandl said he has never sold wine or beer because he doesn’t want to attract vagrants.
Two national chains are negotiating for variances to get around the ban. CVS hopes to lease the Ultima gym space at 400 Clematis, and 7-Eleven is interested in 300 Clematis, which formerly housed Don Ramon restaurant. If they get around the ban, Rebhandl said he would be forced to sell beer and wine to compete.
Officials say the city commission could vote as soon as Feb. 12.
There’s also an ongoing conversation about whether to allow building owners to use their ground floors for something other than shops and restaurants, such as offices or brokerages. Faced with empty storefronts, their leasing prospects dimmed by a nationwide decline in brick-and-mortar retail, landlords and other promoters of downtown activity are increasingly open to alternatives to bring life to city streets.
Downtown residents and business people are torn by the choices.
“My main concern would be destroying our local character and our local businesses,” downtown resident Susan Landeryou said. “National chains competing against our own small businesses. Our local businesses wouldn’t stand a chance.”
Rick Gonzalez, an architect who gives historical tours of downtown and whose offices are above the space 7-Eleven is eyeing, offers an opposing view.
“I hope it’s going to be a good thing for Clematis Street,” Gonzalez said. “One of the big issues we have on Clematis Street, unlike Delray Beach, Lake Worth or Hollywood, is that we have very little neighborhood retail.”
The city has hotels in the works, offices in the planning stages, but “we need some convenience stores,” he said. The spots being considered by CVS and 7-Eleven are “critical” corners for downtown vitality, and it’s important they not stay vacant for long, he said.
Most cities blend local and chain stores — there’s room for both, in Gonzalez’s view. The local scene has unique bars but also supports one of the most successful Duffy’s Sports Grills, a regional sports-bar chain.
“We have Starbucks, but we also have Subculture. I go to both, for different reasons,” Gonzalez said. “For quick coffee, I go to Starbucks but for Philosopher’s Club meetings we go to Subculture.”
Are rents too high?
Paul Snitkin, vice president of the downtown commercial brokerage Anderson and Carr, said the spaces CVS and 7-Eleven plan to lease have been vacant or underleased for years.
The spot being vacated by Ultima Gym was listed for rent or sale for at least five years before CVS offered the landlord a more lucrative deal, he said.
The spot 7-Eleven wants was on the market three years, and restaurants came and went.
“We were looking for clothing retailers, art galleries — anything,” Snitkin said.
The brokers courted Coral Gables bookstore/bistro Books & Books for six months, to no avail.
Snitkin adds: “We were telling them we’d send a limo down to get them up here. One of my clients lives in Coral Gables. I had him go by to talk to them. We thought they’d be a perfect fit for us. Then 7-Eleven came by, offering to pay exorbitant rent for a long-term deal.
“The property owners were, ‘Thank you very much!’ Rather than have a building vacant for years, they have a tenant on the way.
“We’re trying to get a great mix on the street, but it’s the market that’s speaking, it’s not us. If the market shows the way it’s going, that’s what the needs are,” Snitkin said. “7-Eleven and CVS see the need in the future by all the residential units being built. There’s no place downtown for people to grab something to put something in pantry they forgot at Publix or whatever. It’s making life simpler for those people who live downtown. Clematis should be more of an entertainment deal, but it’s not working out that way.”
As far as the look of the street, it won’t be a typical 7-Eleven, he said. The chain plans a prototype store, one of three in the U.S., that’s like a cross between 7-Eleven and a Fresh Market, with “easyto-grab, healthy snacks, craft beers” and a coffee bar with 25 kinds of coffee, “more targeted to on-the-go professional people, to grab a healthy snack and possibly a Slurpee and be on the road.”
And what happens to places like Center City Pharmacy?
“I’ve never even shopped there,” Snitkin said.
In Delray Beach, meanwhile, the conversation has gone beyond the prospect of downtown chain stores to big chain stores.
Since May, under contract with the city, urban planner Robert Gibbs has collected data on downtown retailers, restaurants and other businesses. The consultant said the area around Atlantic Avenue can support more retail and restaurant space than it does now. He presented these findings to the city commission in December.
Gibbs’ ongoing study also confirmed a long-suspected hunch of community leaders about the downtown, which has lost many family businesses to large retailers or chain restaurants: It has character and is walkable but rents are too high.
Downtown rents are “among the highest we’ve seen in the country,” Gibbs said. Where most tenants spend 10 percent of their profit on rent, Delray Beach retailers spend between 16 percent and 20 percent, he said.
Downtown Delray is prime real estate for big-box retailers and generates more than double the national average in retail sales per square foot, Gibbs said.
“You probably will get a lot of pressure from very large format, large leading retailers here,” he said.
According to his research, those big businesses could capture $221 million in sales.
But are they welcome on Atlantic Avenue?
“Everything you’ve just projected eviscerates that which makes this street unique,” Mayor Cary Glickstein said.