The Inherent Power of Landlords

This is the first in a series about how landlords and their current and potential commercial tenants, as well as business and neighborhood associations, can work together to create vibrant, livable neighborhoods and business districts.

Whether they realize it or not, landlords have the power to actively or passively shape and restrict a neighborhood's commercial success. There are plenty of success stories, but there are also a number of commercial challenges occurring right now in some of the city's 95 neighborhoods.

Some trends point to an oversaturation of similar and competing commercial ventures in a business district. Other districts are struggling to attract new business because of the prevalence of non-business ventures. And some business owners ready to open shop are having trouble convincing landlords to simply lease them a space.
 

Ghost Towns

Unless they have a dentist's appointment or need to stop at an ATM, visitors to Jamison Square are unlikely to take a stroll along the east end of NW Lovejoy Street.

When it's warm, people from all over the Portland metro area flock to Jamison Square, in the Pearl District's north end, to stretch out on the grass and watch their children or dogs play. But, unless they have a dentist's appointment or need to stop at an ATM, they're unlikely to take a stroll along the east end of NW Lovejoy Street, just one block away.

Lovejoy was originally developed to be a bustling commercial destination. But if you walk the street today, you might think you’ve stumbled into a sleepy bedroom community. Many of the spaces along the Pearl’s Lovejoy strip have been leased to similar service ventures, specifically banks and dentists, making it feel as quiet as a sparse, Wyoming landscape.

In fact, the east end of NW Lovejoy is particularly packed with banks—five of which stand in a four-block stretch—and dental practices—three of which are located literally within 100 paces of one another.

And even though neighbors and business owners alike joke about tumbleweeds rolling down the street, the fact is this overabundance of similar businesses means that it's often possible to stand in the middle of Lovejoy Street for long stretches without ever having to dodge oncoming traffic, no matter the time of day.

Sunset Districts

Chateau Mississippi on N Mississippi Ave. has five occupants, four serve food.

Unlike that patch of the Pearl, the hip-business corridor on North Mississippi Avenue in Boise has become a thriving commercial destination—but only once the sun starts setting.

Trevin Miller, owner of Mr. Green Beans, the Mississippi Avenue DIY coffee roaster and retailer, suggests that the reason for this is because Mississippi's main drag is now loaded with restaurants and bars, meaning the strip's foot traffic doesn't start gearing up until 4 p.m., or just in time for happy hour.

For retailers like Miller, foot traffic is important, and he says that on weekends and during special, annual events, like the Mississippi Street Fair and Cirque du Cycling bicycle race, the foot traffic is there. But on weekdays before happy hour? Not so much.

In fact, he sees a boost in business only when people take lunch breaks or when the bars begin to open, just as he's about to lock up, Miller says.

Miller doesn't begrudge the strip's sunset activity—after all, he chairs the Historic Mississippi Avenue Business Association—but he said the trend of building more bars and eateries can negatively impact not only retailers, but the strip's service sector too.

An oversaturation of restaurants, he says, means that landlords end up leasing entire buildings to people who earn their living selling the same thing: food. The cuisine may differ, but the basic product doesn't. And Miller suggests, when four or five restaurateurs in the same building begin competing for foot traffic, they might abandon their business models, changing their menus, prices or even the quality of their food to get those potential customers through their doors. All this reconfiguring could lead to a dramatic effect on the financial health of each eatery.

And this trend, Miller indicates, may be hard to reverse. He points out that if an eatery doesn't make it, the abandoned space will most likely be leased to another restaurateur, because it costs a lot more to retrofit a restaurant with a kitchen back into a retail space than it does to simply let another proprietor have a new go at it.

And so, a new round of competition begins every day at 4 p.m., or just before retailers call it a day.

Districts That Don't Serve the Entire Neighborhood

When Albertsons left Gateway in 2010, the building it left behind wasn't leased to another grocer, but sold to Goodwill Industries.

Other neighborhoods, like those under the umbrella of the Gateway Area Business Association (GABA), are struggling to draw, and even retain, business to its area. 

GABA President Fred Sanchez says that his neighborhood has also become oversaturated, in this case, with nonprofits and social services agencies.

In the 1960s, Sanchez says, NE Halsey Street in Parkrose Heights was home to numerous banks, real estate offices, restaurants and bars. But over time, as businesses shuttered, empty spaces were leased to agencies that assist those in need, like shelters, food kitchens and thrift stores. When Albertsons left Gateway a couple of years ago, the building it left behind wasn't leased to another grocer, but sold to Goodwill Industries.

"We do need to help those down and out," Sanchez says, stressing the importance of continuing to care for the financially vulnerable among us. "We have an obligation to help."

But there remains a substantial portion of Gateway residents who don't need those services, and who would welcome a more diverse business district in their own backyard.

Sanchez says Gateway has the potential to become a "20-minute neighborhood" because of the district's high-density residential zoning and its pre-existing transportation infrastructure—it has a MAX station and easy access to the freeway.

If such commercial and high-density development were to occur, Sanchez says, Gateway could bring in tourists and day-trippers from other parts of the city to create a thriving business corridor that is more representative of the neighborhood.

The opportunity, he insists, is not only there, but it is "tremendous."

He says GABA just needs to convince both landlords and potential business owners that Gateway is ripe for rediscovery.

"Get me a McMenamins in Gateway," Sanchez says, "and I'll show you a vibrant neighborhood."

Districts Where Landlords Refuse to Invest

Kenton landlords have refused to lease space to prospective tenants.

Sometimes, convincing a landlord that your neighborhood is worthy of investment can be the least of your worries, especially when they won't respond to your phone calls.

Following a successful run as a pop-up shop downtown, Boys' Fort’s Richard Rolfe and Jake Francis set about trying to find a permanent home for their men's retail venture in the Kenton neighborhood.

Rolfe has called Kenton home for the last 10 years and admits that he never thought the neighborhood would be home to a successful commercial corridor. Over time though, he noticed things starting to improve and figured why not set up shop in one of the empty retail spaces in his own neighborhood.

There’s just one problem, though: Rolfe could not find a landlord willing to lease him a space. In fact, a few landlords turned him down outright.

Rolfe says that he was particularly enthusiastic about an empty space in the middle of North Denver Avenue's retail corridor, but was told that it would've been too expensive for the landowner to bring it up to code before even considering leasing it to him.

"So it sits empty and derelict next to our beautiful new library," Rolfe says.

"You can't make a landlord rent to you if they aren't interested," he says. "And if they are interested, the space is either priced as if it were downtown or viewed as a gamble on a new upstart business."

In the meantime, Boys’ Fort has taken the route that many Portland startups are increasingly taking: In April, they joined forces with two other local businesses, sharing both space and rent.

Whether your neighborhood has too many of the same kind of businesses or landlords unwilling to recognize change around the corner, Neighborhood Notes will continue this series with how landlords choose commercial tenants and how this can shape the way your neighborhood feels.

Until then, have you witnessed the influence of landlords in your neighborhood or business district? Tell us, good or bad.