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Chapter One
INTRODUCTION
John A. Dawson and J. Dennis Lord
The shopping centre, over the last 30 years, has become an established feature of urban structure in countries with widely divergent urban policies. The essence of the shopping centre lies in the concept of a managed and controlled retail environment. Both the internal organisation and the operation of the shopping centre are managed by the developer or owner, with tenant mix, design, promotion, security, maintenance and many other of the operational features, specifically controlled and administered. The purpose of this management and administration generally is the maximisation of the retail power of the centre as a whole. Increasingly, because this retail power is now considerable within urban areas, the agencies responsible for overall urban management are themselves looking for ways to control, maybe limit, but certainly direct this power, such that social costs do not result from the potential abuse of economic power. Thus, attempts are made by urban government to control location, to exert influence on operations, to encourage environmentally acceptable designs, to ensure safe construction, to create a balanced provision of retail facilities and to manage the catalytic processes which shopping centres can exert. Controls therefore are exerted not only internally on the shopping centre as an economic entity, but also externally on the shopping centre as an element of the environment. The chapters in this book illustrate the variety of these internal and external controls, their operation and their effects.
DEFINITION
The term “shopping centre” is often somewhat loosely used to mean a group of shops. Within this book the term is used in its more strict interpretation to mean a group of commercial establishments which have been designed, planned, developed, owned, marketed and managed as a unit. The use of the term “shopping centre” to mean a coherent and controlled group of establishments allows the “shopping centre” to be distinguished from the “shopping district”, which is a concentration of shops and other commercial establishments each in individual ownership and on individual sites. One or more shopping centres may be embedded in a shopping district, or the shopping centre may be freestanding. The distinction between shopping centre and shopping district is important because the concept of a shopping centre implies management and control of competition. Competition is usually given free rein in a shopping district. The economic and geographical models and theories of competition relevant to retailing have been formulated for shopping districts, not for shopping centres. Many of these theories have little relevance to retailing in shopping centres. The distinction is also important because shopping centres are accounting for an increasing share of retail sales volumes at the expense of shops located in shopping districts. Within the USA, over half of total retail sales now pass through shopping centres; in Britain it is probably less than half this figure, but, as in almost all countries, sales through shopping centres are increasing at a faster rate than retail sales in general. Control and management are the key factors differentiating shopping centres from shopping districts. These activities within shopping centres are the cynosure of this book.
THEMES
The studies of policies, controls and management in shopping centre development which make up this book comprise three groups. One aim of the book is to consider and exemplify control and management policies, so a first group of chapters considers some general policies internal and external to shopping centre operation. The second group of chapters consists of case studies of centre development in several urban and metropolitan areas. A third group of chapters reviews recent changes in centre development activity and the policy response to these changes.
In Part I studies are presented of landuse policies towards shopping centres in the USA and the UK. In the USA, Dawson and Lord show that both federal and state agencies have intervened in the shopping centre location process. The policies of both agencies with those of Florida and Vermont considered in detail and of Federal Government, exemplified by Community Conservation Guidance and UDAG policies, have met with mixed success. Attempts by policy agencies to impose policies on the growing and increasingly powerful shopping centre industry have been resisted by the industry and generally have failed to achieve their objectives. Alternatively, where policies have been designed on the basis of co-operation or a partnership between policy group and shopping centre industry, they appear to have been more successful and certainly in the case of the UDAG programme, the policy initiatives have had far-reaching implications. In the next chapter, Schiller points to the success of cooperative type policies in the UK. The form of development in the UK contrasts markedly with that in the USA in location, space standards and design. Contrasts also exist in the management of centres through tenant mix, lease practices, promotion, etc. But, despite these contrasts, Schiller argues, in similar vein to Dawson and Lord, that successful centre development has occurred when planner and developer operate in unison. The land-use planner can operate policies which guide rather than coerce developers in their location decisions. The aims of planning policy can then be met without major conflict. Savitt, in the third chapter, analyses a policy area where conflict rather than co-operation has been the keynote of policy. The control of tenant mix in a centre raises many interesting issues as to how far a developer or owner may go in his property, in controlling retail operations. The concept of a department store in which individual departments are organised and managed to optimise total sales in the store is one pole of a continuum of organisational structures which passes through the shop-in-shop idea to the fully fledged shopping centre at the other pole. Whilst policies and legislation exist to exert public influences on tenant mix in a shopping centre, questions can be raised as to how far along this continuum these policies should be applied. Savitt, in reviewing specific cases and issues in the USA, raises questions about the purpose, use and justification of various tenant policies. The first section of the book is concerned therefore with explicit description and consideration of particular policy approaches.
The second group of essays in Part II comprises case studies of centre development in specific cities. The extent to which landuse and other related policies affect shopping centre location and operation varies from country to country. The city case studies have been selected to illustrate this variety ranging from relative absence of control in Atlanta to the strict controls of Canberra. Dent, in his study of Atlanta, shows how in the early stages of development of a system of shopping centres, development follows population but gradually the process changes such that centre development acts as a catalyst for more general economic and social development. This may occur in the almost free market of Atlanta and may also occur in cities with a stricter planning regime. In Toronto, Shaw points to pressures on the one hand between city centre developments and suburban schemes and on the other between shopping centres and shopping districts and ribbons. The resolution of these pressures within a spatial system of centres is one of the aims of landuse planning policy. In the studies of Paris and Newcastle, similar pressures are shown with the policy in Paris, as Delobez indicates, favouring new suburban centres and the policy in Newcastle, as Davies notes, favouring central city schemes. In both cities, the planning agencies represent a powerful force guiding the developers' decisions. Within Paris, an example is provided of how centres have been developed to act as catalytic poles for commercial growth — reiterating a theme brought out in respect of Atlanta and comparable to the larger schemes Dawson describes in Canberra. The total control of a centralised landuse planning agency in Canberra contrasts with the inter-agency competition illustrated in Newcastle, but in both cities dynamic economies have become sluggish, creating new types of problems for the shopping centre industry, which thrives on economic growth. The attempts to come to terms with slower growth in Canberra have generated frequently changing landuse policies which have sought to reduce the amount of floorspace, whilst still providing a hierarchical arrangement of centres in a city of low population density. Although the difference in the degree of control between Canberra and Atlanta could hardly be greater, it is interesting to note that in both cities multi-use centres have come to provide the anchors of the shopping centre system.
The five chapters in Part II, each focusing on an individual city, illustrate a range of planning policies aimed at influencing the location of centres and the spatial structure of the system of centres. In these urban case studies, it is evident however that changes in the composition and retail operation of centres have taken place over their several decades of development in individual cities. New types of centre have been designed to take account of trends in retail operations; new investment and new retail styles have been attracted to the more affluent parts of the city; older centres have required re-styling to keep them competitive with the centre system.
Whilst the city case studies concentrate on spatial changes in centre systems, the chapters in Part III illustrate some of these structural changes. Lord begins by linking together the spatial change on an urban scale with spatial and structural change at the regional level in North America. He points to strong regional differentials in both historic and contemporary growth patterns. The regional patterns reflect national shifts in relative economic prosperity, the general expansion of the industry and the consequent diffusion of the centre concept, and the growth of new centre operations in middle markets. Other structural changes are examined in the second chapter of the section as Lord explores renovation, recycling and the conversion of older centres to meet the demands of new types of retail merchandising. Decisions on centre redevelopment result from corporate policy decisions. Centre owners have to react in some way to the existence of an ageing asset. Various policy options are open to them including sale, redevelopment, rehabilitation and the retenanting of the centre, perhaps to allow off-price retailers to locate there. Lord explores the various policy options and points to future trends in this general area. In the final chapter, Young, in returning to the theme mentioned in many of the previous chapters, extends and elaborates the ideas of shopping centres as surburban growth poles. He points to the metamorphosis of the regional centre into a “minicity” and illustrates the implications of this for city structure. The new style multi-use centres and “mini-cities” pose new types of policy issues to many levels of urban government. Their sheer size poses issues associated with the concentration of retail power and environmental management. Public policy agencies are still feeling their way in respect of the whys and hows of policy intervention. By considering examples in Orange County, California, Young is able to illustrate policy issues which many other metropolitan areas will be addressing in the late 1980s.
It is hoped that by bringing together descriptions and analyses of shopping centre development and by focusing discussion on a range of public and corporate policy issues raised by centre development, there will be a better understanding of shopping centre operation. Only with this greater depth of understanding will sensible and sensitive relationships be worked out between developers charged with managing a major urban institution and public policy makers charged with managing the urban economy and environment.
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PART I
POLICY ISSUES AND APPROACHES
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Chapter Two
FEDERAL AND STATE INTERVENTION IN SHOPPING CENTRE DEVELOPMENT IN THE USA
John A. Dawson and J. Dennis Lord
THE EMERGENCE OF POLICY ACTIVITIES
Public policy control aimed directly at commercial development of all types in the USA traditionally has been minimal. Indirectly at the national level broad economic and financial policy has affected economic factors such as interest rates and so has had a consequential effect on the amount and level of shopping centre investment. It is possible also to trace other indirect policy influences, for example in the interstate highway programme and its creation of circumferential metropolitan freeways. Until recent years with a more realistic federal interpretation of urban trends (Berry 1981), intervention from the federal government on shopping centre issues was limited to these indirect and unstructured measures. Public policy control, as much as it existed at all, was locally based and implemented through zoning legislation. Local zoning plans still seek to direct the development of new centres but the relative ease with which such plans can be changed weakens zoning powers considerably. Although not totally unconstrained, shopping centre development in the USA has been little influenced by public policy. As long as taxes were paid, shopping centres were operated with little attention given to any broader public social and economic costs incurred from their operation.
The establishment of legislation to assess environmental impact and the social costs of major projects in general inevitably resulted in a closer scrutiny of the broad costs and benefits of shopping centre development. The National Environment Policy Act of 1969 required that the environmental effects of federal actions be evaluated and this Act served to increase federal and state awareness of the social costs of some of their own actions and those of commercial developers. In the last decade both federal and state authorities have become more willing to intervene in the shopping centre development process. Intervention may be regulatory negativism by simply refusing permission for new schemes or it may be more positive in attempting to manage and shape economic growth. The movement towards intervention is not widespread and centre developers still operate relatively unfettered in comparison with most other countries. Nonetheless, interventionist activity is significant in a few states in shaping new centre development and isolated federal programmes are affecting the location and type of centre being developed.
Four examples of policy intervention are considered in this chapter. First is the shortlived Community Conservation Guidance, a federal programme in operation from 1979 to 1981. It authorised, under certain circumstances, the preparation of an impact analysis for new retail development associated in some way with federal actions. The programme generated strong views from many quarters and was quickly killed after the change in the Presidency in 1981. As a second example of federal activity, the Urban Development Action Grant (UDAG) programme is considered. This programme survived the change in Presidency and encourages, by financial loans, partnerships between government and industry on condition that private funds are invested alongside the loan. The approach is one of encouraging development. Two examples of states' policies also are provided. The first of these is Vermont's Act 250 which requires that developers of schemes larger than a critical size obtain a development permit from the state. Somewhat similar is the Developments of Regional Impact programme in Florida which seeks, through a Regional Planning Council assessment procedure applied to shopping centre applications above a critical size, to encourage developers to take responsibility for various environmental costs and to reduce the negative impacts of the new centre. Several other states have, or are considering, similar types of interventionist policy and Vermont and Florida serve as examples of what has been achieved already.
THE COMMUNITY CONSERVATION GUIDANCE POLICY
The Community Conservation Guidance Policy (CCG) issued by former President Carter in November, 1979 represents the most significant example to date of federal governmental intervention in retail development in the USA (CCG 1979). The document could be appropriately labelled as a retail location policy because of its potential impact on the location of new retail capital investment. The policy remained in effect for approximately one and one-half years before its termination in June,1981 by the newly elected U.S. President, Ronald Reagan. If the policy had continued, its effect might have been similar to the focus of retail development policy in Great Britain, i.e. the containment of suburban retail growth and the encouragement of new investment in the city centre (Lord 1981).
As part of former President Carter's broad urban programme, the general goal of the CCG policy was the preservation and conservation of USA urban communities. The government acknowledged that many previous federal actions had contributed to the problems of urban America with some federal actions working at cross purposes. The CCG policy was intended to ensure that various federal actions would not have the effect of eroding existing commercial areas, particularly CBDs. Specifically the policy was concerned with situations where federal monies might be used to support the construction of suburban shopping centres which would have an adverse impact on retailing in existing commercial centres.
The CCG policy was invoked in anticipation of the construction of a shopping centre. A community impact analysis was required if any pending federal action would lead to the construction of a shopping centre which might adversely affect, or impact, existing commercial areas. Examples of federal actions included highway widening projects, the construction of exit ramps on interstate highways in order to provide access to the shopping centre and the extension of water and sewer lines. The federal agency involved in any of these types of activites was asked to consider ways of modifying its actions, possibly to the extent of withholding funds if the community impact analysis revealed an adverse impact on existing retail centres. While it is important to note that the CCG policy would not have actually directly prevented the construction of a shopping centre, the w...
