Local Planners, Not Big-Box Execs, Blamed For Small Biz Woes

City planning mapHow cozy are you with your local planning commission, city council or county officials? If you want to preserve existing small businesses and the look of a local business district that has evolved over many years, those are the decision makers you need on your side.

While it’s popular to blame national big-box retailers for the demise of smaller local merchants, more often than not, the real culprit is zoning changes instigated by local government officials. In their attempt to boost local revenues they often make zoning changes aimed at redevelopment. These efforts typically force out existing businesses and tend to eliminate the architectural and cultural features that make an area unique.

Saving local merchants

This is what a Hunter College study found after looking at 10 year’s worth of business changes in Brooklyn. Mike Owen Benediktsson, assistant professor of sociology along with students Brian Lamberta and Erika Larson concluding that fighting chain stores alone isn’t enough to prevent the loss of “mom-and-pop” shops in a community.

Always on the hunt for strengthening an area’s tax base, local officials usually turn to the tactic of adding commercial space through rezoning. This gives property owners an incentive to either redevelop their sites themselves or sell out to developers. Along with this comes higher rents that force out existing tenants.

This scenario is far more common than a chain retail giant swooping into a community and forcing out smaller businesses through competitive pricing. However, if large existing storefronts come under the umbrella of rezoning for redevelopment, it paves the way for the big national brands to come in.

Kelo v. City of New London

This is somewhat reminiscent of what happened in New London, Connecticut, when the city used its power of eminent domain to transfer land from one private owner to another in the name of economic development. The US Supreme Court ruled the taking legal, but tragically, the hoped for development never materialized.

It is certainly true that small businesses need local governments that are financially strong. However, it’s also true that the lure of higher tax revenues can put small business owners and their elected officials on the opposite sides of some zoning issues.

I remember a local official once saying that all the important decisions he made during his career were land use issues. That’s critical for small business owners to keep in mind as they decide who to support for local office. On the positive side of this issue, many local agencies are eager for public input on zoning proposals and master plan development. Be sure you participate.

If you don’t, you might someday find that you can’t afford to do business in your own hometown.

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Image: Kabul РCity of Light Development area and concept plan, uploaded by Arcaddmarketing, used under a Creative Commons Attribution-ShareAlike license.