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Downtown Shopping: What Happened and How Can We Turn it Around?

December 6, 2002 @ 8:30 PM on WVIZ

DICK:
THAT JINGLING NOISE YOU’RE HEARING ISN’T THE SOUND OF SANTA’S SLEIGHBELLS. IT’S THE SOUND OF MONEY IN YOUR POCKET JUST WAITING TO BE SPENT DURING THIS HOLIDAY SEASON, TRADITIONALLY THE MOST WONDERFUL TIME OF THE YEAR FOR RETAILERS. JOINING US NOW FOR THIS WEEK’S “MAKING CHANGE” CHAT ON HOLIDAY SHOPPING IS IDEASTREAM’S JULIE HENRY.AND JULIE, WHAT’S THE OUTLOOK FOR LOCAL RETAIL OUTLETS THIS YEAR?

JULIE:
WELL DICK, SOME NATIONAL ANALYSTS ARE OPTIMISTIC THAT RECENT GAINS IN THE ECONOMY WILL HAVE AMERICANS OUT BUYING IN FORCE THIS DECEMBER. OTHERS SEEM MORE SCROOGE-LIKE AND ARE PREDICTING THE WEAKEST HOLIDAY SHOPPING SEASON IN A DECADE.

JULIE:
EITHER WAY, AS YOU HEAD OUT TO SPEND YOUR HARD-EARNED DOLLARS IN THE WEEKS AHEAD, CHANCES ARE GOOD YOU WON’T BE SPENDING THEM DOWNTOWN. WHILE DOWNTOWN CLEVELAND USED TO BE A SHOPPING MECCA WITH SIX DEPARTMENT STORES… LAST DECEMBER’S CLOSING OF DILLARD’S TOOK THAT NUMBER DOWN TO ZERO.

SO WHAT HAPPENED TO THE DOWNTOWN DEPARTMENT STORES? WELL RECENTLY, I HAD A CHANCE TO ASK GREGORY STOUP, RESEARCH DIRECTOR AT THE CENTER FOR REGIONAL ECONOMIC ISSUES AT CASE WESTERN RESERVE UNIVERSITY’S WEATHERHEAD SCHOOL OF MANAGEMENT. AND HERE’S WHAT HE SAID:
Gregory: Well these metrics area always somewhat sketchy. But if you look at the trends in downtown retail employment, particularly in cities across the midwest, you would find a broad trend that shows a lot of these regions and downtowns are suffering and many of them are actually in a state of decline. For NE Ohio, however, we're one of the handful of cities that have squeeked out a positive growth over the last 4-5 years. Now the loss of Dillard's in the last year will probably negatively impact those numbers, but the broader trend in total employment in downtown remains positive, which suggests by itself there's still some growth opportunity within the sector.

JH: WHAT'S THE EFFECT OF BUILDING ALL THESE MALLS THAT JUST KEEP GOING FARTHER AND FARTHER OUT FROM THE HEART OF THE CITY? IS THAT JUST DRAGGING SHOPPERS OUT TO THE OUTLYING AREAS?

Gregory: There is a little bit of that. But if you look at what really drives growth in retail, it's less the trends in population than the trends in income for a region. So for a place like NE Ohio where its popuation's growth tends to be somewhat stagnant, the retail sector can still expand providing that incomes continue to grow. And incomes do continue to grow in NE Ohio despite the current economic situation.

JH: I'VE HEARD PEOPLE SAY, LOOK LET'S SAY I LIVE IN MEDINA AND I WORK IN INDEPENDENCE AND I GO TO SEE MOVIES IN STRONGSVILLE AND I DON'T EVEN GO DOWNTOWN. SO WHY SHOULD I CARE. MAYBE DOWNTOWNS ARE OBSOLETE AND WE SHOULD JUST LET IT GO.

Gregory: Well there is a strong corrolation between the health of a region's downtown and it's overall economic performance. And that shouldn't be a surprise to us because when you think about the economic benefits that are association clusters of economic activity in close proximity to one another, they exist. And I know we're all being told that the internet is changing the way we do business and that face to face transactions are really something of a bygone era. And there's a lot of truth to that. But at the same time, big deals, multimillion dollar deals are not done by e-mail. And so it is a contact sport that exists in a town. And so if you can meet your number one client or a banker simply by walking across Superior Avenue for lunch, you have a competitive advantage over your rival who doesn't have that opportunity.

JH: SO LET'S SAY THAT I'M GOING OUT SHOPPING THIS HOLIDAY SEASON AND I WOULD LIKE TO SUPPORT THE DOWNTOWN AREA. WHAT KIND OF DIFFERENCE CAN I MAKE LET'S SAY IF I JUST SPENT ONE DAY SHOPPING DOWNTOWN RATHER THAN AT MY LOCAL MALL?

Gregory: Well the difference would be significant, and over time certainly resources and development activity would follow that. But I think it's a better strategy and more constructive to think about developing an overall comprehensive plan for the downtown, rather than try to guilt people to come downtown once or twice to do their shopping. If you develop an overall strategy to support the economic base, the broad base, you're much better off. So what does that strategy look like? A big part of it is supporting the tourism sector so that you can better capture those income dollars that exist outside the state and outside the region. Part of it is nurturing the residential community. If you don't have people living in the downtown, it's difficult to sustain local commerce in the long run. Another important piece of the pie is having a healthy and strong public transportation system. And affordable and plentiful parking to better capture the income that exists outside your central city but still in your metropolitan area. And you need a business and entrepreneurial friendly community. And this is just to retain and expand the business portion of that economic activity.

JH: SO WHERE ARE WE IN TERMS OF DEVELOPING A PLAN THAT ADDRESSES SOME OF THESE ISSUES?

Gregory: I think these are all underway. And you have organizations that are trying to push each piece of that. You see the Growth Association and its Team NEO effort really trying to bolster an attraction for the region. And the business community is really engaged heavily in trying to shore up a tourism strategy for the region.
JULIE:
AND TO GET A MORE DETAILED PICTURE OF OUR REGIONAL ECONOMY… CHECK OUT THE MAKING CHANGE WEBSITE AT WVIZ-DOT-ORG OR WCPN-DOT-ORG. WE WILL LINK YOU UP TO THE CENTER FOR REGIONAL ECONOMIC ISSUES. THEY HAVE A NUMBER OF REPORTS AND ARTICLES AVAILABLE ONLINE THAT WILL GIVE YOU SOME OF THE FACTS YOU NEED TO MAKE INFORMED CHOICES AS WE BEGIN REINVENTING NORTHEAST OHIO'S ECONOMY.

Support for the Making Change segments on “Feagler and Friends” is provided through a grant from the SBC Foundation. SBC companies provide a full range of voice, data, networking and e-business services throughout 13 states, including Ohio.