There's something afoot at the corner of Haywood and College streets, and it's not just the massive renovation under way at the former CVS pharmacy site. After all, there are similar projects scattered around downtown Asheville.
Still, this particular project stands out enough to have touched off community discussion of a topic this city seems to revisit every few years: Is Asheville's downtown really an appropriate place for chain stores? And if not, what can be done about them?
Asheville's downtown is widely heralded for the independent shops and restaurants that give the city its unique ambiance, say visitors and residents alike. "Funky" is the adjective that's repeatedly invoked, and the city's distinctive character is even cited as a draw for new industry in search of the still emerging "creative class."
So when clothing and home furnishings retailer Urban Outfitters announced in early July that it would open a downtown Asheville store by this fall, the news was sure to generate some reaction. Xpress wrote about the issue of chain stores in 2003, when several franchises set up shop downtown, and again in 2007, when City Council candidate Elaine Lite proposed banning chains in the city center. And in 2005, when Starbucks Coffee Co. opened a store on Charlotte Street (not exactly the heart of the central business district), the brand-new building was vandalized.
Urban Outfitters, however, had huddled with both the Downtown Commission and the Downtown Association beforehand, and their arrival on the scene was hailed in some quarters.
"Overwhelmingly the board thinks the downtown should be a mix of independent, franchise and chain business," Downtown Association President Byron Greiner reports. "If you really think about it, downtown can't survive just on independent businesses."
Chain stores, he maintains, beef up downtown's tax base, and their name recognition attracts a new population of shoppers to the area.
Kristie Quinn agrees. A partner in Boone Associates, an Asheville-based real-estate and development company, she's been working with Urban Outfitters officials and the local landlord.
Urban Outfitters, says Quinn, will give other downtown retailers a boost, because the company is a strong draw with a national reputation. Company representatives, she notes, have said they'll work with other local retailers to ensure that there's no duplication in what's offered.
But some small-business owners aren't so sure, fearing that big chains' deeper pockets could drive up downtown rents.
Asia Mahon, who is president of the Lexington Avenue Merchants Association and owns the dress shop Virtue, says she's spoken with other business owners who fear that Urban Outfitters' arrival will trigger rent increases that could force independent stores out. "I think that's the main fear of these little businesses. We're not as much afraid of the competition as we are of our rents going up and driving us out of business."
Mahon, who's had various businesses on Lexington since 1992, says low rents have been key to her ability to open shops and keep them going. That, in turn, has spurred other entrepreneurs to launch quirky boutiques that have helped Asheville build its reputation as a one-of-a-kind shopping destination.
Pat Whalen, president of Public Interest Projects, a business and real estate development firm, says downtown property owners are well aware that chains can pay double or more what local businesses can but that, nonetheless, some landlords simply refuse to rent to national and multinational companies.
"Oh yeah, we've done that," says Whalen. "A lot of people who did development in the '90s were very cognizant that it was the local businesses that were the backbone of what downtown was all about."
But in tough economic times with more downtown storefronts coming open, he notes, property owners' commitment to keeping things local may be sorely tested.
"Everybody's under financial pressure: landlords, business owners, everybody. When people get desperate, different things may happen," he observes.
Until recently, Whalen also chaired the Downtown Commission and served on the Downtown Master Plan Advisory Committee, a group of stakeholders who helped keep a local eye on the draft plan produced by consultants Goody Clancy and passed on to City Council in June. He says the topic of chain stores did come up, but it never really jelled into a firm recommendation.
"There's not a lot of real new protections in the Downtown Master Plan," says Whalen. "That was kind of left for the future if we want to do it."
There was also talk of finding ways to direct chains to other local specialty shopping areas such as Biltmore Village, notes architect Tom Gallaher, who was hired by Goody Clancy to participate in the master-plan meetings. But again, no firm language was formulated, and the document now before Council contains only a general statement acknowledging independent businesses' importance to downtown and urging support for them.
Discussion with the Downtown Commission produced the same result, says Gallaher. "There was no mechanism to sort of say, 'You're OK, you're not.' It certainly was a tempting topic, but it was never a serious pursuit."
But even if the will is there, crafting ordinances designed to screen out chain stores is something of a sticky wicket, says Jeff Milchen of the Bozeman, Mont.-based American Independent Business Alliance. Milchen, who gave talks on this very topic to several Asheville groups a few years ago, says legal precedent, including Supreme Court rulings, prohibits discriminating against a business based on its ownership.
What is allowed, he says, is creating general rules based on the desired character of stores. Architecture and design are the most obvious elements of character, he explains, but it can also include things like standardized merchandise and employee uniforms. Thus, many have eschewed the term "chain store" in favor of the more legally acceptable "formula store."
Another obstacle Asheville might face in attempting to restrict chains is the fact that in many cases, North Carolina municipalities must get permission from the General Assembly to pass certain types of laws. And since many Tar Heel cities are struggling financially and would probably welcome chain stores, "I'm not even sure what we'd be allowed to do," says Whalen.
Nonetheless, there have been some local efforts to investigate the options for controlling the impact of chains downtown. In 2005, Council member Brownie Newman introduced a plan to restructure the city's tax code to ensure that chain businesses pay their fare share of taxes. And requests from the community have led the city attorney to research the issue, Urban Planner Stephanie Monson of the city's Office of Economic Development reports, though so far, no proposals have come before City Council. Meanwhile, apart from some industrial uses and adult establishments, there are very few restrictions on businesses downtown, according to Assistant Planning Director Shannon Tuch.
"I've heard murmurs of people wanting to do something about it, but it's always been … put on the back burner to deal with later on," says Whalen. "And I'm not sure Urban Outfitters' coming to town and replacing another chain is going to be the straw that broke the camel's back to get people excited about doing something permanent downtown."
A rapid retail shift
But that hasn't prevented people in other cities from tackling the issue. The New Rules Project, a program of the Washington, D.C.-based Institute for Local Self-Reliance, lists on its Web site a menu of news stories, studies and op-ed pieces concerning the need to support locally owned businesses and keep chains out, and highlighting potential threats to those goals.
Even when only a few chain stores start moving in, communities should be on guard, maintains Stacy Mitchell, senior researcher for the project. "The real reason people become concerned about this is that many of these retailers are looking at the same marketing info. And many are watching one another," she explains, adding, "You can undergo a fairly rapid retail shift."
That financial impact, notes Mitchell (who also chairs the American Independent Business Alliance's board) isn't limited to rent increases. Study after study bears out the fact that national chains put less money back into the community.
In Chicago, she says, one study found that for every $100 spent, locally owned businesses reinvested $68 in the community; for chains, the figure was $43.
Steve Rasmussen, co-founder of Buy Local WNC, agrees. "They suck all the money away; they don't recirculate it," he says. "They don't hire local Web designers; they don't hire local architects; they don't hire local designers. That clothing is made in China, not here."
(Some of Urban Outfitters clothing is made overseas and, in 2008, a group of shareholders asked the company to adopt an international human-rights policy.)
Another strength of independently owned shops, says Mahon, has been their ability to work together. The clothing boutiques on Lexington, she notes, share buying lists to make sure each one carries different product lines. The practice, says Mahon, "is unheard of" — but the result is positive.
"It benefits everybody, because we're all unique, and it makes the shopping experience for the people coming down the street enjoyable. They see something new in every store."
And though Urban Outfitters' arrival is a mark of downtown's success, says Mahon, "We're not excited about Asheville becoming gentrified to where it's going to look like anywhere else you're going to go." Small-business owners, she believes, will simply be forced to work smarter in order to say alive.
"I just think small businesses need to prepare themselves and just stay focused on filling a niche that Urban Outfitters is not filling. And we're going to have to make our business the most welcoming, positive experience for the customer."
A question of semantics?
As with just about everything Asheville, however, there's no standard reaction to the question of chain stores.
Marc McCloud, who owns Orbit DVD, an independent movie-rental business in West Asheville, says he's a fierce defender of mom-and-pop operations — but he also sees the benefits of bigger stores.
"I want everyone to succeed, but personally, I don't have a problem with Urban Outfitters coming in," says McCloud. "I think there might be an opportunity for a whole new clientele of people coming to downtown Asheville."
Small businesses, he maintains, just have to be ready to deal with increased competition and higher rents, noting, "Those are factors you kind of have to be prepared for anyway."
McCloud also sees some hypocrisy in what businesses people say they do and don't like. "They hate Starbucks, but they love Dunkin' Donuts. They hate Wal-Mart, but they love Target. Some people say they would love it if an Apple Store came into downtown. Well, they're a chain."
And therein lies another piece of Asheville's chain dilemma: A number of established downtown businesses, including the Marble Slab Creamery, Kilwin's Chocolates and Ice Cream, Mellow Mushroom Pizza Bakers, Mast General Store, are either chain stores or franchises. And the departure of the CVS that's being replaced by Urban Outfitters sparked much lamentation on the part of downtown residents who shopped there for household necessities.
"The thing is, we have chain stores [now]," says Gallaher. "But they happen to be the chain stores we like."
Invisible hand or hands-on?
Even Starbucks made it past the spray-paint-and-broken-window phase and has no problem filling its seats. But that hasn't seemed to affect the survival of local indie coffee shops, says Greiner, who warns against stigmatizing a business just because another one like it exists someplace else. Greiner was featured in a 2003 Xpress story about chain stores, having opened Anntony's Caribbean Cafe, which had a twin in Charlotte.
"People identified us as a chain," he recalls. "But we were locally owned, hired local employees and paid local taxes." (The local Anntony's closed several years ago, and Greiner now sells real estate with Keller Williams.)
Greiner also rejects the idea that Urban Outfitters won't actively participate in the community. "They are a perfect example of what we want," he asserts, adding that company representatives told the Downtown Association they plan to be involved financially with local charities and nonprofits. Quinn, meanwhile, says the company may offer local artworks for sale on store walls and host local musicians in the store.
It seems worth noting that Asheville hasn't always been off-limits to chains: The evidence is literally written on the walls of its historic structures. Woolworth's and Kress were both national chains whose buildings now house stalls for local artists. It was the Great Depression's economic devastation that emptied downtown of chains, and it was the revitalization drive of the 1980s and '90s that spawned today's predominance of local businesses.
Bob and Ellen Carr own Tops for Shoes, a downtown institution that attracts many out-of-town shoppers. Bob Carr served on a downtown revitalization committee back in the 1980s, when the area was marked by deserted streets and boarded-up storefronts. At that time, a chain like Urban Outfitters would have been ushered in with no questions asked, he maintains.
"Back in the '80s, we would have loved to have them come in. Now that we have all these established businesses, I'm not sure we need them," says Carr. "But they're going to be a draw, and hopefully everybody can share in the retail growth."
And in any case, he thinks it's "inevitable that national chains are going to start looking at Asheville. All you have to do is walk around the streets and see all the people that are out there to know there's a market." But Carr goes on to say that he hopes downtown retains its status as a novel shopping destination. How to make this happen? "I think the marketplace needs to take care of that," he observes.
Not everyone shares Carr's faith, however. Sara Legatski, who owns downtown clothing stores Honeypot and HUNK, worries that Urban Outfitters' arrival heralds the "mall-ification" of downtown.
"We should be discouraging national chains from moving here. They are not compatible with our working infrastructure," she believes. "An 8,000-square-foot store that sells over 30,000 products a year is offering nothing special or niche — [it belongs] in the mall or on Tunnel Road."
Meanwhile, she says, local stores are already suffering enough in the current economic climate.
"There are not enough resources to go around right now, and most independent businesses are running on 60 to 70 percent of their normal income. People are being driven to take out loans to stay afloat, and any competition — especially a multibillion-dollar conglomerate —is certainly threatening," she asserts.
Milchen of the American Independent Business Alliance also thinks there needs to be a more proactive approach to protecting downtown's "funky" character.
"Asheville," he says, "is striking in its core downtown by being dominated by local businesses. That is an asset that should be guarded."