Reuse/redevelopment plan required for large buildings?

[stroskey]

We are a non-metro city of about 30,000. I am doing some research on requiring large retailers (say...over 25,000 square feet or another arbitrary number) to have a redevelopment or reuse plan should the business ever leave that particular site. Have any of your communities done this in the past?

I see the benefit but question the enforcement techniques. How will the developer know what will work in the future? Should they be required to change the facade for easier development of smaller businesses? How can the city afford to demo a large building if these are not met, etc? We've dealt with escrow accounts in the past and it was a nightmare so we want to stay away from that.

Thanks.

[mike gurnee]

Run away from the idea...unless you anticipate being gone before enforcement is necessary.

[ColoGI]

We are a non-metro city of about 30,000. I am doing some research on requiring large retailers (say...over 25,000 square feet or another arbitrary number) to have a redevelopment or reuse plan should the business ever leave that particular site. Have any of your communities done this in the past?

I see the benefit but question the enforcement techniques. How will the developer know what will work in the future? Should they be required to change the facade for easier development of smaller businesses? How can the city afford to demo a large building if these are not met, etc? We've dealt with escrow accounts in the past and it was a nightmare so we want to stay away from that.

Thanks.

Its a swell idea and I can see this being floated, and public comment - including developers - laughing long and loud and the idea retracted. Much better to have the plant originate from within for when the owners walk away from buildings, in hopes that something remotely close to the plan happens 15 years from now.

[stroskey]

Without being difficult, why is it a bad idea? I understand why businesses may not want it but those in a community with 2 or three empyt shells of old Walmarts may feel different?

[Raf]

Without being difficult, why is it a bad idea? I understand why businesses may not want it but those in a community with 2 or three empyt shells of old Walmarts may feel different?

It is nearly impossible to predict if/when a business goes out of business and its potential uses in the future. Think about the movie back to the future part II. We are suppose to be in hover cars and boards 5 years from now. Is that going to happen? umm no. God knows what the latest commerical fad will be 5 years from now.

On top of that, 25,000 sf of retail is hardly large. That's not even your typical grocery store. If anything it is at best a few retail pads put together, maybe a drug store with a few support pads. Typical large retail that you need to worry about starts at around 60,000 sf (old school k-marts and wal-mart stand alones).

Maybe you should require an economic study done for larger commerical projects and potential impacts it may have with local revenue and existing business. You would think that would be the main concern with new retail is the existing centers or shops going out of business and their potential reuse. Just sayin.

[mendelman]

First is equity.

If you are even remotely serious about this (especially for only "large" properties) you need to have a legally defensible reason why you are trageting only a certain segment. Because unless you have a good reason people are going to want to know why you aren't requiring it of all commercial development - past and to be.

The best method to mitigate the "effects" of vacancy for large properties is to provide economic incentives (tax breaks, TIF funding, etc.) to reduce developer/owner costs to make redevelopment more likely.

Good luck. You're going to need it.

[stroskey]

We aren't pursuing it but rather just gathering information - reasons for and against it. I doubt it would ever happen in my tenure but it's nice to know some thoughts on the subject. Thank you for the input.

[DetroitPlanner]

On top of that, 25,000 sf of retail is hardly large. That's not even your typical grocery store. If anything it is at best a few retail pads put together, maybe a drug store with a few support pads. Typical large retail that you need to worry about starts at around 60,000 sf (old school k-marts and wal-mart stand alones).

I was thinking the same thing... you want to see re-use issues? What do you do with a closed 5 million square foot manufacturing facility that is on 8 stories?

[mgk920]

Another problem with re-use (one that I have brought up before in these forvms), and a major issue in some jurisdictions, is the 'no compete' clause that is frequently placed into the properties' deeds by their original owners when they move out. Ie, a commercial building that was developed as a grocery store that by deed, cannot be used by anyone else to sell groceries. Ditto banks, electronics stores, movie theaters, home improvement centers, etc.

What have been the experiences of jurisdictions that have tried outlawing those clauses?

Also, has any jurisdiction ever tried exercising eminent domain over such a deed clause in order to, for example, relieve a grocery store 'desert' within its borders?

Mike

[Cardinal]

Another problem with re-use (one that I have brought up before in these forvms), and a major issue in some jurisdictions, is the 'no compete' clause that is frequently placed into the properties' deeds by their original owners when they move out. Ie, a commercial building that was developed as a grocery store that by deed, cannot be used by anyone else to sell groceries. Ditto banks, electronics stores, movie theaters, home improvement centers, etc.

What have been the experiences of jurisdictions that have tried outlawing those clauses?

Also, has any jurisdiction ever tried exercising eminent domain over such a deed clause in order to, for example, relieve a grocery store 'desert' within its borders?

Mike

The non-compete clause is one of the major issues. Addressing this would go a long way to making it possible to fill these vacant spaces. Besides that, there is the issue of functionality. I am often called in to advise communities or owners about reuse of their commercial buildings, finding out that the building's shape, ceiling height, parking, or other characteristics present a hurdle for potential new users. Of course, you might ask if these issues really can be addressed up front. Perhaps we might ensure adequate parking (or the area preserved to add parking if necessary). But are we really going to ask a discount store or grocer to build no more than 100 feet deep so that the building might be divided into 5000 square foot stores in the future?

[fringe]

I appreciate the motive of the idea in the OP, which sounds like effort to prevent big box ghostism. In our area it would be called "unfriendly to business".

A grocer in our county built 125K SF, occupied it for ten years, then built new and bigger adjacent, abandoned older area, which sits empty still today.

Word is he plans soon to demolish the older, build new on the ruins, and then abandon the current area.

Question. How does this modus operandi make economic sense? Does he write off the vacant area as a loss against what he makes on the occupied?

[Tobinn]

I don't see the point in having someone come up with plans to supersede the current site plan - who's going to enforce it? What happens if the site is sold and the new property owner has other ideas? What happens if the everyone involved simply goes out of business and leaves town - who's to building the backup plans?

I'd just leave that idea alone.

As far as non-compete clauses, if any special permissions are needed to get the project approved perhaps one of the conditions could be not having any non-compete clauses or other such restrictions attached to the deed.