Improvement Plans for H Street Retail Shops

1. Improvement Plans for H Street Retail Shops Andrew King, TalhaOcal, Mitsuru Misawa August 16, 2012

2. Agenda • Summary • Overview of Current Situation • Future Timeline • SWOT Analysis • Store Expansion History • Leakage and Surplus Factor Analysis • Recommendations • Increase Retail • Security/Safety • Sanitation/Cleanness • Transportation/Accessibility

3. Summary • Current Situation • H Street has great potential for retail shop owners. • Customers want more shops along H Street. • Restaurants have been saturated but growth continues. • Issues Recognized: Security, Sanitation, and Transportation • Strategies for H Streetas a whole • Increase retail shops • Resolve three main issues • Security/Safety • Street Lamps, Security, Diversify businesses • Sanitation/Cleanness • Volunteering • Transportation/Accessibility • Partnership with Capital Bikeshare • Parking and taxis • Possible BID formation

4. Major Project Overview (Timeline) • 2012 • Construction of streetcar tracks from Node 1 to Benning • 2013 • Giant will open (in between 3rd St and 4th St) • Streetcars will start to run from Node 1 to Benningin Summer 2013 • [Long term future] • H street’s streetcars will reach Georgetown http://www.dcstreetcar.com/fact-sheets.html

5. SWOT Analysis

6. Retail Store Distribution/location Node 2 Fashion One J & V Pawn Family Liquor Shoe City Foot Locker Sports Zone Rite-Aid T-Mobile Z-Mart Rent-A-Center H Street Pharmacy King's Beauty Supply GameStop Boost Mobile Stan's Discount Clothing Rainbow Styles DTLR Fashion Susan Fashion Jewelry Store Men's Fashion Center PK Hardware Cricket Wireless Picture That Dana Jewelry 3 Point Teks 7-Eleven C.A.T. Boutique Super Pharmacy & Medical Equipment North East Beauty Supply Convenience Grocery Thrift Store Daily Rider Me & My Supermarket Family Dollar Jumbo Liquor 1 2 3 Node 3 Auto Zone Atlas Vet Euro Style Thrift Store Mike's Thrift Store Rasheed BaitulKhair Node 1 Capitol Fine Wine & Spirits Dynamic Wellness Metro Mutts Murry'sFood Store Beauty Supply AspireHealth Store Adobe Design [This survey was done in July 2012.]

7. Retail Expansion Retail Growth in the H Street Corridor, 2009-2012 • Overall, Retail has increased • Node 1: 4 to 6 • Node 2: 12 to 36 • Node 3: 3 to 7 • 38 shops have opened • 8 shops have closed • Node 2 retail tripled Data Sources: 2009: WDCEP Report 2012: DirectSurvey

8. Retail Store and Restaurant expansion Leakage/Surplus Factor Analysis • Explanation of Graph • Negative (Surplus) – There is space for more customers at existing businesses. • Positive (Leakage) – Insufficient businesses to meet demand. Potential customers may go elsewhere. • Implications • Clothing stores, restaurants, andbars are on the surplus side, which implies these categories may have • been saturated. • Other categories are on the leakage side, which means H Street can attract more people • if it has more businesses in these categories. Source: Retail marketplace profile by ESRI and Infogroup

9. Retail Stores and Restaurant expansion (cont) • Zip code 20002 area has almost same index number of restaurants as those in DC, and almost twice the national average. • This graph implies that 20002 areamay have enough restaurants, and that it serves as a “restaurant destination area.” Source: http://www.clrsearch.com/Washington_Demographics/DC/20002/Quality-of-Life

10. Recent Retail Survey Results This survey shows: 1. People are satisfied with entertainment and special events/festivals. People want to shop more in H Street, and they want more variety of goods and services. In addition, they are satisfied with the price and----quality of the goods and services they ----purchase. More than half of the people think that the cleanliness of the street is lower than average. Cleanliness is one of the urgent issues to solve. Also, about 60% of the people believe that safety in H street is lower than average. In addition, more than 60% of the people feel that shopping hours are short. Because customers may feel it is not safe around H Street at night time, store owners close early. In summary, H Street has perceived safety and cleanliness issues. Source: H Street Main Street Retail Survey done by Lauren Adkins

11. Summary of Current Situation • H Street has great potential for retail shop owners and • the number of retail shops has been increasing since 2009. • Customers want more shops and variety along H Street. • Ordinary products seem to be needed rather than • expensive or luxury goods. • Restaurants have been or are being saturated. • Three primary issues were identified. • Security/Safety • Sanitation/Cleanliness • Transportation

12. Strategies/Recommendations Retail Store Strategies for H Street

13. Forecasting: Retail Store Increase • Based on the numbers of retail shops in 2009 and 2012, retail store expansion can be simply forecasted as above. • Node 1: 7 (2013) to 7 (2014) • Node 2: 44 (2013) to 52 (2014) • Node 3: 8 (2013) to 10 (2014) • In the current situation of H Street, this forecast should be realistic. • However, by simply walking down H Street, it is apparent that the vast majority of new construction is restaurants. Source: http://www.mta.info/news/stories/?story=762

14. Issue: Security/Safety • 20002 area has higher rates of some types of crime than DC. • This data coincides with the survey. • Bars on front doors may cause people to feel insecure. • Gates keep the restaurant and bar crowd from recognizing retailers • Possible Solutions: • Increase street lamps • Replace bars and gates with protective window wrap • Hire private security • Increase police patrols • All these solutions require funding: capital improvements require large payments up front, and patrols require funding in perpetuity Nationwide average crime numbers are indexed at 1, and compared to average levels in 20002 and DC as a whole. Crime Statistics: http://www.fbi.gov/stats-services/crimestats

15. Issue: Security/Safety • Low visibility of retailers at night is a negative – we want to capitalize on the vibrant night life of the corridor as much as possible! • Expanded retail hours (The Daily Rider) • Increased convenience for customers • Increased visibility of business could help with growth • Shared front end space / multi-use space • Shared storefronts: branching out • Dynamic Wellness & Raw Juice Bar • Sidamo’s recent “Lending Library” • Restaurant or bar hosting Trunk Sales during the daytime • A vacant building could be rented out as a venue for traveling sales, suit fittings, etc

16. Issue: Sanitation/Cleanliness • Recommendation: Clean Team Volunteers • Gathering volunteers to form clean teams is one solution • Consistency and sustainability are a concern • Volunteer labor may work better on a specific-project basis • Another solution: BID formation • Forming a BID may also work to address these issues • The stable funding of a BID would help ensure sustainable Clean Team activity

17. Issue: Transportation/Accessibility • Recommendation: Capital Bikeshare • Streetcars: • Will run through H Street NE, but the west end is at 3rd St NE. • Streetcars cannot pull people from downtown DC to H Street. • Trains and buses: • Changing and/or adding lines would be expensive and the decision making authority rests with • other agencies. These alternatives are not realistic. • Promoting and advertising Capital Bikeshare may be the best alternative. • Already established: Numerous existing stations and aggressive expansion of the program • Inexpensive fees • First 30 minutes for free (for members) • Popular with both tourists and locals

18. Issue: Transportation/Accessibility Recommendation: Capital Bikeshare Capital Bikeshare is not fully utilized in H Street Area even though it is difficult to access the area for people who do not have cars/automobiles. There is much space to utilize Capital Bikeshare in H Street. How to promote? Becoming a sponsor of Capital Bikesharemight not work, since only one fifth of the people are aware that the DC government and other institutions are sponsors of Capital Bikeshare. However, collaborating with Capital Bikeshare would work by, for example, Giving one day pass as gifts/rewards to H Street customers. Spreading ad papers for H Street around Union Station, Chinatown and elsewhere. Source: Capital Bikeshare 2011 Member Survey Report June 14, 2012

19. Issue: Transportation/Accessibility H Street NE already has four Capital Bikeshare stations, but to increasedensity and convenience, one or two more stations can be added. Source: http://capitalbikeshare.com/stations

20. Issue: Transportation/Accessibility • Parking options • Look into possibility of grant funding for turning vacant lots into parking areas • Mixed use of the incoming Giant parking garage which will have 250 – 270 parking spots • Taxi Stand • For many errands, or for parents, Bikeshare won’t work • Partner with a private company to have a taxi stand in a central and convenient location Source: http://capitalbikeshare.com/stations

21. BID Formation • BID formation • BID can help fund security and sanitation solutions • Community support is required • H Street can satisfy this requirement • Assessment (funding) comes from community • BID could provide services similar to Main Street • Existing 8 BIDs in DC and BID Council may be informative in terms of expenses, services, and best practices

22. BID Formation Existing 8 BIDs Financial Data H Street Area • There are 8 BIDs in DC • Most BIDs disclose their financial • information in annual reports • Some data obtained from 990’s Source: http://www.dcbidcouncil.org/map/

23. Limitations of Corridor Financial Analysis • Data Availability • Lack of historical property data means no accuracy in forecasting • Lack of SF / linear frontage in OTR data • Leads to use of “Assessed Value” model for projecting assessments • Assumptions • Relative stability of assessed values • Same assessment method used for each corridor • Costs for similar services do not vary across BIDs • Future Analyses • Compare multiple assessment models: LF, SF, Assessment, Hotels • Different assessment models are more appropriate in different areas • Always keep in mind:resident/merchant impact!

24. Corridor Analysis: H Street Assessed Value Model $120 per residential unit $0.15 commercial rate per $100 assessed $0.05 vacant rate per SF Land Area Projected Annual BID Assessment: $372,450 Mean daily cost to H St restaurant: $2.30 Mean daily cost to H St retailer: $3.21 Data Source: 2011 OTR data

25. BID Formation Human Resource Expense Assumption • Benchmark: Mount Vernon (because of similar area and business size) • 2 administrations and 6 maintenance stuffs • Assume there are five positions: executive, full-time assistant, part-time assistant, cleaner, • and landscaper • In H Street corridor, In total 6 members should be enough for cleaners and landscapers. • Total HR cost depends on how many people are needed for administrations. • Also, other expenses should be considered.

26. TIF model • The idea: Because BIDs cause property values to increase, set up a TIF to capture that value in order to help fund the BID • The model: “Low-growth” or normal model for 10 years for corridor compared to “Higher-growth” post-BID model for same time frame and area • The result: The NPV of the difference in tax revenue is the “incremental gain” which is then adjusted for a general fund carve-out to establish the TIF fund. • This is a small TIF because the growth models are very conservative.

27. TIF Model Assumptions Growth rates are estimates, need historic data to be able to forecast Currently uses the H Street Corridor, but could be adapted to other corridors

28. TIF Subsidy Payments TIF money establishes a fund and uses an amortization table to fund BID activity during a multi-year setup period. This takes the initial burden off of their constituents and creates a funding mechanism with a definite end.

29. THANK YOU! Any Questions?

30. Appendix: Alcohol Moratorium • One possible strategy to stabilize the number of restaurants and bars in the corridor is a moratorium on licenses to serve alcohol • The procedure for this involves a petition by community organizations • Covering the entire corridor would require two moratorium zones • This strategy is not recommended unless restaurants and bars begin “taking over” the neighborhood and become a legitimate nuisance