The Shaw location of Glen's Garden Market is closing after a little more than two years nestled in The Shay, a new mixed-use development. The locavore grocery is not alone. Over the past year there has been a series of retail closures including Chrome Industries, Kit and Ace, Steven Alan, Frank and Oak, and Bucketfeet. Argent is also shuttering soon, but will be replaced by a Korean BBQ joint. (Yay!)
When asked why Glen's was closing, owner Danielle Vogel said: “I think Shaw was super hot two years ago, and then it never delivered on its own promise. We’ve had developments like The Wharf that’ve drawn people away, and there were changes in our political system that changed the constituency of our communities. The bubble kind of passed over.”
The Shay is among a slew of high end businesses around Eighth and V streets NW in the “North End of Shaw” that cropped up as part of the neighborhood's rebranding. Developer JBG companies settled on the name when they were trying to pitch their project to retailers, who kept confusing it with a separate cluster of development in a southern part of the neighborhood.
Now there's a high-end development similar to The Shay slated to replace Town, the city's largest gay bar. However, the closures have sparked questions about the actual impact of “rebranding” neighborhoods — whether it actually helps and for how long, and what the impacts might be on the original businesses in the area, not just the new trendy ones.
Contributor Brian McEntee posed a more pointed (if tongue-in-cheek) question on Twitter: “Is Shaw over?”
“And by Shaw, I mean less the actual neighborhood than the re-branding and commodification,” McEntee added.
how many “hip” “high-end” “newly transformed” “millennial-y” “neighborhoods” can the population of DC sustain?— sharrowsDC (@sharrowsDC) March 26, 2018
Danielle's quote is interesting because she makes it seem like the Wharf sucked up all the oxygen— sharrowsDC (@sharrowsDC) March 26, 2018
(I can't say if that's actually true- the wharf isn't really my jam, but I personally can only keep open so many businesses. they rely on lots of people!)— sharrowsDC (@sharrowsDC) March 26, 2018
also, retail is hard. like, everywhere, and for reasons well beyond if a neighborhood is the coolest and newest. so it's hard to know how much that's a factor.— sharrowsDC (@sharrowsDC) March 26, 2018
but even beyond that, I just sorta wonder how fickle the consumer is in 2018 and if the half-life is the new new place is getting even shorter— sharrowsDC (@sharrowsDC) March 26, 2018
or if there's something just wrong with North End Shaw, which in my opinion, is just as good (if not way better) of a canned insta-neighborhood as anything else going on— sharrowsDC (@sharrowsDC) March 26, 2018
Needless to say, our contributors (and local Redditors) have a lot of thoughts on the matter.
Alex Baca wonders what the real problem is:
I don't know if Shaw's over. I also wonder if that's the question we should be asking (though I definitely appreciate Brian prompting the conversation). A lot of well-meaning, affluent white liberals in my neighborhood in Cleveland bemoan the opening of new breweries, because “we already have so many places to drink, so why can't we have neighborhood-serving retail, like a dry cleaner, or [insert morally appropriate business here]?”
I usually respond by saying that if there isn't demand for the breweries, they will close, thereby proving these types of people right. That doesn't make them happy, either.
I am curious as to the actual issue here. Lots of retailers in the Shay are closing. Are rents too high? Is this actually a problem? I think it is, but I'm having a hard time putting my finger on what the solutions, if any, should be.
Gordon Chaffin doesn't think we should take these closings too seriously — yet:
I would take this set of closings with a pound of salt. With a new construction building like The Shay, or an insta-neighborhood like The Wharf, the initial set of commercial leases probably have a high margin of error for the businesses. That is, it's a very early point in the product-market fit and price discovery process. After the confetti settles on a new project, these businesses have actual operating data that will drive some turnover. Sure, the developers do their best to get good-fit tenants on the grand opening, but there need to be a few cycles of turnover before a neighborhood is dead.
Also, as a matter of taxonomy, these neighborhood distinctions get parsed to death. If Shaw is less than 36 square blocks, a few closures swing the neighborhood. This is one of the many reasons I don't like being pedantic about Truxton Circle vs. Bloomingdale, etc.
Dan Reed thinks there actually isn't enough retail in the neighborhood yet to sustain certain kinds of businesses:
I think it comes down to this quote from the story: [owner Danielle Vogel] says there aren’t enough people walking through the doors to sustain a business like Glen’s. I used to work at Vermont and U in a coworking space. At night, U Street is hopping, but during the day it is a sleepy small town — everyone goes downtown to work. Retail needs foot traffic to survive, and it's just not there yet, at least during the day.
With The Shay, I think there (ironically) wasn't enough retail to give it that critical mass to make it a destination. People seeking trendy shopping stuff can hit up Georgetown or maybe 14th Street and know they'll have a bunch of options to choose from. You had to *decide* to go to Warby Parker, or Chrome, etc. and when you're done, here you are at 7th and Florida with nowhere else to look. That hurts traffic too, especially for the lesser-known stores.
Maxime Develliers shared an anecdote about his mother's restaurant:
Though I often see foot traffic and changes in neighborhood trendiness as the true cause of businesses opening and closing, leases are a huge factor as well. There is no doubt in my mind that most businesses in Cleveland Park have closed because the neighborhood has declined in popularity and is not as accessible by foot and bike as, say, U Street. However, my mom would have kept Lavandou in Cleveland Park open had the owners not sold the building to a wealthy foreign investor.
The new owner met with my mom multiple times trying to convince her to keep the restaurant open, promising that he'd pay for new kitchen appliances, etc. But, as an outsider looking in, he thought that the high property values in the neighborhood meant that there were tons of wealthy people willing to often spend $20-30 on an entree at their local French restaurant. What his data didn't show was that many of those expensive homes are occupied by retirees who no longer have a steady income flowing in or prefer not to spend the money they do have saved up on dinner at an upscale, local eatery. Under the previous owners (the Tropea family), the rent was $7,000 a month.
Under the new owner, the rent would increase by $3,000 per month ($10,000 total) which simply was not feasible for a restaurant that had turned into a neighborhood eatery, no longer a regional destination. My mom could provide some more data for you guys if you'd like, but one number I'll never forget is that Palena (located in the small, historic building adjacent to the gas station on the corner of Porter) was paying $20,000 a month in rent. In Cleveland Park. Not downtown. That always blew my mind.
Payton Chung broke it down:
JBG took a big risk by limiting the food & beverage (restaurant/bar) uses at this site — beyond even the 50 percent maximum under the its ARTS zoning — and ultimately I don't think the bet paid off. The Wharf took a different tack. It's a historic food destination, and it doesn't have zoning limiting F&B. The five-star restaurants and concert venues all have a regional draw, and a bit of service retail can tag along with them. Foot traffic was slow over the winter, but has really picked back up this spring. My neighbors are annoyed at the crowds, but we finally have bakeries and bookstores — which our little neighborhood of 10,000 could not otherwise support.
Everyone says that they love soft-goods retail (apparel, linens, beauty), but it's super difficult because it's all-or-nothing. People comparison-shop clothing much more than other categories, which means that “critical mass” matters a whole lot more. Tysons Corner and Georgetown can offer this, with dozens of shops all selling the same general categories of goods. These shops like to be near their competitors (what retailers call “adjacencies”): for the jacket I'm wearing, I thought I'd buy it at Brand X in Georgetown, but they didn't have the right size, so I walked down to Brand Y and got something different there. The “flight to quality” and clustering will reinforce this even more as shopping moves online.
This is where shopping malls and “instant neighborhoods” like CityCenterDC or the Wharf have a leg up: they can guarantee adjacencies, since they own that, too. They can discount a music venue's lease, because they'll make up the money on a restaurant or hotel lease next door. If the great retail mix increases property values, the big owners can keep more of those increases for themselves. When ownership is more dispersed, every landlord tries to maximize their own rent, and you end up with a bunch of lookalike stores.
More specific to The Shay's retail mix, my last work trip to LA looked at a few other developments that were trying to cluster “street couture,” pricey fashion boutiques that appeal to a younger and more urban audience than Rodeo Drive or CityCenterDC. There's a lot of supply chasing the same trendy vibe there, and fashion is fickle — there have already been several waves of openings and closings in various parts of town (Cahuenga and Robertson were out, Arts District was in but its epicenter keeps shifting). It's weird to hear people in LA talk through their realization that things should be within walking distance of one another.
Specific to Glen's, groceries require an insane number of customers: margins are really tight, and staffing levels are high. Especially with a Whole Foods opening two blocks away, and the O Street Giant four blocks south, I was skeptical that the customer base was really there.
What are your thoughts?