Thursday, March 24, 2011

On small businesses and DCUSA, part 1: rent & set-asides

As readers know, I've been concerned a bit about all the chains coming into DCUSA. I'm going to write a few posts about the issues, and this is the first. Stay tuned for more.

Thanks to Jim Graham I got in touch with Robert Moore of the Development Corporation of Columbia Heights, which among other things, works with renting in DCUSA. I asked him about small businesses in the building.

Contrary to a recent comment on this blog, which said the building wasn't designed for small businesses, Moore says there was a setaside program organized by the DC government: "Space plans were and still are prepared indicating the specific spaces for the set aside program. The DCUSA set aside space program includes a 30% rent reduction for local, neighborhood and minority businesses seeking to lease space."

Moore said it works like this: a business submits a detailed business plan and application from DCCH, with specifics on location, size, and how much money they have. He said two businesses have taken advantage of the deal: Senor Chicken on Park Road and the IHOP (which is a local franchise). The other set-aside spots are vacant.

As for why more small, local businesses haven't moved in:
We have responded to any number of small businesses interested in leasing in DCUSA. For the most part, the buildings spaces are a bit too large for most start up businesses. Financing the costs of build out also is too costly for many small tenants and lenders have not been interested in making business loans for start ups. We remain aggressively interested in assisting small businesses.
That's too bad, but let's hope they do keep looking. There are still some open spaces: see the original floor plan to give you an idea of those spaces (note that this floor plan is years old, so lots of the tenants are different.)

This is just part 1 of this series. More to come.

12 comments:

Bobby said...

Every time I walk past Senor Chicken, I can't help but notice that it is completely devoid of customers. I can't comment on the quality of its food, but given its location I'm shocked that it can't pull more people in.

Lauren McK said...

Is this floor plan up to date? This shows a Caribou Coffee on the corner where the BOA is. I'd love to see what's really anticipated for the spaces.

Andrew said...

Should have mentioned that -- this is the original floor plan from years ago. I'll update.

Anonymous said...

http://hampdenmerchants.com/

Hampden in Baltimore has done quite well to keep out chains and build up local businesses. Many smaller businesses in the city actually moved to Hampden in recent years. Cost is obviously a factor, but its not everything.

Has anyone involved in the community business associations looked into reviewing their methods, or is there just not any actual interest in keeping things local? Its certainly doable.

Deanwoodenizen said...

DCCH has to do more than set aside space. DCCH should have partnered with a business development entity (Latino Economic Development Corporation and Washington Area Community Investment Fund come to mind) to develop a small business training program. Setting up a training program that includes financial assistance like a low-interest rate loan on build-out will do a lot more and show a lot more commitment than just setting aside space and lowering rent.

Tom Veil said...

Aw, man, we could have had a Maggie Moo's? Now I'm mourning the death of that chain's DC presence all over again.

Oh, and Senor Chicken totally deserves some love for the "starkly lit cheap chicken shack" market. With the exception of drink selection, it beats Pollo Campero at everything, and I personally prefer it over the smaller places to the west.

Anonymous said...

While there is indeed a set-aside for small businesses, the building itself isn't set-up for small businesses. I don't see how many small businesses would see the spaces there as attractive.

Look at Senor Chicken as an example. The physical space doesn't look right for that small business. The ceilings are much too-high.

The DC USA building itself, without much articulation between the different types of businesses it seeks to attract, is set up for chain establishments. While I wish more small businesses would be able to set up shop there, I just see it very, very hard to accomplish even with the rent reduction.

Gus said...

Well...Lane Bryant is closing. Not a good sign for retailers in general. I agree that DCCH hasn't really been very effective. Until you can offer special financing, most minority owned or local owned business can't stay liquid to survive the first two years. Then you have the money bloc in the city sitting on franchise rights for the District. Makes it hard for your average Joe or Jose to get their foot in the door.

IMGoph said...

thanks so much for undertaking this series, andrew. this is the kind of quality reporting that local neighborhood blogs should be doing!

LaLa said...

It's a little disheartening that, despite the fact that 30% of the space was set aside for small businesses, they did not actually design those spaces for small businesses to set up shop. That seems to be an inherent problem with the site, and seems to call for a reconfiguration of the available spaces.

BRIAN said...

I look forward to this series. Thanks for taking up this effort.

Isayaah Parker said...

Nobody wants small business at DCUSA, the whole point of it was to attract nationalized American chains to the core of DC. Hence the name, "DC USA" A rather nationally commercial name. There are opportunities around Columbia Heights for local small start ups, but DC USA is not the place. As someone mentioned before, the lay out is just awkward for anything like a MAMA'S QUILTS or ROSA'S EMPENADAS...I'd like to see a Walgreens there to compete with the horrible CVS.