1
Managing
Maryland’s Growth:
Models and Guidelines
“Big-Box” Retail
Development
Maryland Department of Planning
This document may not reflect current law
and practice and may be inconsistent
with current regulations.
2
State of Maryland
Parris N. Glendening, Governor
Kathleen Kennedy Townsend, Lieutenant Governor
Maryland Department of Planning
Roy Kienitz, Secretary
Ronald N. Young, Deputy Secretary
October, 2001
This booklet was written by Theodis L. Perry, Jr. under the
direction of James T. Noonan. Production and graphic designs
were provided by Gail Fields and Mark Praetorius.
Additional copies are available from the Maryland Department of
Planning, 301 West Preston Street, Baltimore, Maryland 21201-
2365. Phone: 410.767.4550. Fax: 410.767.4480. Also, visit
our website at www.mdp.state.md.us.
3
Introduction
Cities, towns and rural areas have changed dramatically over the
past decade. The proliferation of discount, general merchandise
stores such as Target, Wal-Mart and Kmart have had a significant
impact on our urban and rural landscapes, affecting the way we
shop, live, work and play. While changes in consumer buying
habits are often linked to changes in the retail industry, commu-
nities are increasingly becoming more aware of both the positive
and negative aspects of large-scale retail facilities—often called “big-
boxes,” “megastores” or “superstores.” In this report, the term big-
box(es) will be used.
Big-box retail facilities are large, industrial-style buildings or stores
with footprints that generally range from 20,000 square feet to
200,000 square feet. While most big-boxes operate as a single-story
structure, they typically have a three-story mass that stands more
than 30 feet tall.
1
The definition, or perhaps the description of a
big-box store can be better understood through its product
category. For example, book retailers like Barnes & Noble generally
range from 25,000 square feet to 50,000 square feet, whereas in the
general merchandise category, big-boxes like Wal-Mart range from
80,000 square feet to 130,000 square feet.
1
State of New Jersey, Office of Planning, Creating Communities of Place. New Jersey,
December 1995.
What is a big-box
retail development?
4
There are four major subgroups used to categorize big-box retail
formats: discount department stores, category killers, outlet stores
and warehouse clubs.
Discount department stores, ranging from 80,000 square feet to
130,000 square feet, offer a wide variety of merchandise including
automotive parts and services, housewares, home furnishings,
apparel and beauty aids. This group includes retailers such as
Target, Wal-Mart and Kmart.
2
Category killers, ranging from 20,000 square feet to 120,000 square
feet, offer a large selection of merchandise and low prices in a par-
ticular type of product category. This group includes retailers such
as Circuit City, Office Depot, Sports Authority, Lowe’s, Home Depot
and Toys “R” Us.
Outlet stores, ranging from 20,000 square feet to 80,000 square
feet, are typically the discount arms of major department stores
such as Nordstrom Rack and J.C. Penny Outlet. In addition, manu-
facturers such as Nike, Bass Shoes and Burlington Coat Factory
have retail outlet stores.
Warehouse clubs, ranging from 104,000 square feet to 170,000
square feet, offer a variety of goods, in bulk, at wholesale prices.
However, warehouse clubs provide a limited number of product
items (5,000 or less). This group includes retailers such as
Costco Wholesale, Pace, Sam’s Club and BJ’s Wholesale Club.
2
A new generation of “supercenters” in this retail category range from 100,000 square feet
to 210,000 square feet.
What are the
different types
of big-boxes?
Discount
Department
Stores
Outlet
Stores
Warehouse
Clubs
Category
Killers
5
The term “power center” is often used to describe groupings of
the various forms of big-box retailers. Power centers generally
contain 250,000 square feet to 1 million square feet of retail
space. Retailers that locate in power centers may be
freestanding, structurally attached to another retailer, or a
combination of both types. The trade area from which most
power centers draw consumers ranges from five miles to ten
miles.
The term “regional center” is often used to describe a small
grouping of big-box retailers, typically developments of two or
more anchor stores. Regional centers range from 400,000 square
feet to 800,000 square feet. They are generally enclosed with an
inward arrangement of stores connected by a walkway. The trade
area from which most regional centers draw consumers ranges
from five miles to fifteen miles.
The term “shopping center” describes a group of retail and other
commercial establishments that is planned, developed and often
managed as a single property. The orientation and size of the
center is typically determined by the location of the center and
the market characteristics of the trade area. Shopping centers are
generally configured as enclosed malls and open-air strip plazas.
Purpose of This Models and Guidelines Report
The purpose of this report is three-fold. One, it examines the
trends and impacts of big-box retail development; two, it explores
strategies used to regulate big-box retailers; and three, it looks at
the implications of big-box development with respect to Smart
Growth legislation.
Other useful
retail
development
terms
6
How This Report is Organized
This report is organized into the following six sections:
Trends in Big-Box Development
This section presents a brief overview of the historical
development of big-box retailers such as Woolworth and
Toys “R” Us. This section also addresses recent trends in
big-box development including international expansion
and movement towards urban and downtown areas.
Big-Box Development in Maryland
In this section, a brief historical overview of retail trends
in Maryland is presented with an emphasis on big-box
development. In addition, this section covers current
trends as well as recent opposition to big-box retail
development in the State.
Impacts of Big-Box Development
This section includes findings from studies conducted
on the impacts of big-box development. In addition,
this section discusses the land-use implications of big-
box development.
Regulatory Strategies and Market Approaches
This section contains examples of regulatory strategies
used in states such as New Jersey and Vermont. This
section also includes strategies used in the following
cities and counties: Mequon, Wisconsin; Fort Collins,
Colorado; Somerset County, New Jersey; Portland,
Oregon; and Gaithersburg, Maryland.
7
Relation to Smart Growth Legislation
This section provides a brief overview of Smart
Growth legislation and land-use regulatory powers
noted in Article 66B of the Annotated Code of Mary-
land. This section also discusses Smart Growth
legislation with respect to regulating big-box retail
development.
Summary and Recommendations
This portion of the report contains a brief overview of
the sections noted above. It also provides recommen-
dations and examples of models and guidelines that
can be used by the State as well as local jurisdictions.
8
Section 1:
Trends in Big-Box Development
Historical Overview
The evolution of big-box retailers is often linked to discount,
general merchandise and department stores such as Woolworth
and Sears, Roebuck and Co.. The origins of Woolworth, for
example, date back to 1879. Founded by Frank Winfield
Woolworth, the first store opened in Lancaster, Pennsylvania. By
1995, Woolworth Corporation operated over 8,000 stores in the
United States, Canada, Mexico, Germany, Asia and Australia.
The typical size of a Woolworth store was approximately 100,000
square feet. Today, Woolworth Corporation is known as Venator
Group, Inc. Venator has moved from general merchandise to
sporting goods. Venator operates Foot Locker, Champs Sports
and Eastbay.
Toys “R” Us serves as another example of the pre-discount era.
Charles Lazarus opened his first store in 1957. Often described as
the original category killer, Toys “R” Us was revolutionary in its
ability to provide a large selection of lower priced toys under one
roof. Today, Toys “R” Us operates over 700 stores in the United
States and 450 international stores that are franchise operations.
3
During the latter part of the nineteenth century, stores like Wool-
worth existed in downtown areas and along main streets. By the
1950s, however, department and discount stores began opening
branches in outlying areas to serve residents/consumers that
moved from central cities to suburban areas.
3
Data does not include Kids “R” Us and Babies “R” Us stores.
9
The American Society of Planning Officials noted the following
about discount stores in a 1963 report:
The discount store has filled a retail commercial vacuum in
two respects. First, the discount store is relieving an
“under-stored” situation in the suburbs. Conventional
retail outlets have not kept up with suburban population
growth and consumer demand. Second, the consumer
purchasing power has been held constant during the past
few years. Therefore, the consumer has attempted to find
ways of making his spendable dollars go further.
Discounters, recognizing this factor, introduced innova-
tions to capture the consumer’s attention and dollars and
to increase his purchasing power. Thus, the discount store
has become a formidable force on the retail scene.
Some experts are predicting that, by 1965, discounters will
have captured better than 20 percent of an expanded
apparel/home-goods/general merchandise market...[t]otal
food sales through them may exceed 30 percent of the
food market, which would be a larger share than that now
enjoyed by department stores.
4
4
American Society of Planning Officials, “Discount Stores.” Planning Advisory Service,
Chicago, Illinois, March 1963.
10
Table 1: Big-Box Size
Spectrum
Category or Business
Name
Comparative Size
Superstores 3 times the traditional supermarket
Home Depot 18 times the traditional hardware store
Chapters 12 times the traditional book store
Business Depot 5 times the traditional office supply store
Sports Authority 6 times the traditional sporting goods store
Source: The Impact of Big-Box Retail on Toronto’s Retail Structure
Current Overview
There has been significant growth in the retail trade industry.
According to the International Council of Shopping Centers, sales
at shopping centers in the United States were estimated at $1.16
trillion in 1999, up from $1.07 trillion in 1998. In 1999, shopping
centers generated $47.5 billion in state sales taxes, an 8.4
percent increase from $43.8 billion collected in 1998.
Currently, retail trade is the second largest industry in terms of the
number of employees and the number of establishments. This is
interesting to note, given the fact that Kmart, Target and Wal-Mart
were all established in1962. However, Wal-Mart remains the
leader due to the number of store sites in its portfolio. To date,
Wal-Mart has over 1,782 store sites, 765 “supercenter” store sites
(which range from 150,000 square feet to 180,000 square feet)
and ownership of 466 Sam’s Club stores.
While big-box retailers have continued to expand in suburban and
rural areas within the United States, they have also expanded
internationally. For example, Wal-Mart entered the retail market in
the greater Toronto, Canada area in 1994. Today, Wal-Mart has
17 stores in the Toronto area.
11
Drive-through pharmacies, value malls and de-malls are examples
of new trends in big-box retail development.
Tremendous growth has occurred over the last three years among
retail pharmacies such as Rite Aid and Eckerd, which provide drive-
through prescription services. Rite Aid, for example, has over 3,800
store locations in the United States. Retail pharmacies typically
range from 8,000 square feet to 12,000 square feet and operate as a
single-story structure; however, they generally have a two-story
mass that stands more than 25 feet.
Another trend in the retail sector is the value mall. Value malls
combine in a single, integrated development various value-oriented
retail types such as factory and department store outlets, category
killers and large specialty retailers. Two value mall examples in the
mid-Atlantic region include Potomac Mills in suburban Washington,
D.C. and Arundel Mills in Anne Arundel County, Maryland. Arundel
Mills, which opened in the fall of 2000, has approximately 1.3
million square feet of leasable floor space.
A newly built Walgreens located at the corner of Liberty and Milford Mill roads
in Baltimore County, Maryland.
Retail
Pharmacies
Value Malls
What are some
new trends in big-
box retail
development?
12
Rear drive-through prescription service at Walgreens on the corner of Liberty
and Milford Mill roads.
The concept of “de-malling” is a relatively new trend in retail
development. It is described as a retail operation in which store-
fronts are reversed, or turned inside out, towards parking.
5
De-
malls are typically located near existing malls, but do not
necessarily compete with them due to different product offerings.
A local example of a de-mall is Towson Place in Towson, Maryland.
It consists of retailers like Sports Authority and Toys “R” Us. It is
less than three miles away from the Towsontown Center mall.
5
The Knolls Company, ”Turning a Retail Center Inside Out.” Urban Land (reprinted),
April 1995.
De-Malls
13
Towson Place in Towson, Maryland is an example of a “de-mall.”
While big-box retailers have continued to locate in rural and subur-
ban areas, there is a growing trend toward more retail development
in existing urban areas. Urban areas are becoming more attractive
due to increased saturation or over-expansion of retailers in subur-
ban markets. Surprisingly, retail analysts predicted there would be
a problem with retail saturation over three decades ago.
[O]ver expansion will be a problem in almost every major
metropolitan area. In some key markets, developers have
built too many stores for all to share in sales growth.
Some discounters have overestimated their likely sales
growth, which has led them to build stores that are too big
to be profitable, or sometimes to buy too much merchan-
dise. Among 200 discounters surveyed by Dunn and Brad-
street, 25 percent in 1961 had total debts averaging three
and one-half times their net worth.
6
6
American Society of Planning Officials, 1963.
What are some
positive and
negative aspects
of big-box retail
development?
14
Urban areas are also becoming more attractive to retailers because
of the growth potential in many inner-city communities that lack
adequate retail facilities. The U.S. Department of Housing and
Urban Development (HUD) noted the following findings in a
market study:
• America’s inner-city neighborhoods possess enormous
retail purchasing power estimated at $331 billion last year,
or one-third of the $1.1 trillion total for the central cities in
which those neighborhoods are located.
• Despite their huge buying power, many of America’s inner-
city communities are “under-retailed,” with sales that fall
significantly short of residents’ retail purchasing power.
The total shortfall was $8.7 billion last year for 48 inner-
city areas in which HUD found a retail gap.
7
The redevelopment of the historic Sears, Roebuck and Co. building
in the Fenway neighborhood in Boston, Massachusetts, serves as
one example of big-box retailers locating in an urban area. The
developer, The Abbey Group, developed the historic structure into
a 560,000 square foot retail facility with an average store of 40,000
square feet.
Another example is the redevelopment of the Lechmere store in
East Cambridge, Massachusetts. The developer, New England
Development, participated in a number of negotiations with the
Lechmere Company and city planners in order to create a “win-win”
project. Issues that were resolved during the community planning
process included the exterior and interior design of the structure,
parking, crime, and the relationship of the new development to the
adjoining public spaces.
In Baltimore, Maryland, plans are underway to develop an area
called Port Covington. This former brownfields site, near the
intersection of Hanover Street and Exit 55 of Interstate 95, is
being developed by Starwood Ceruzzi, LLC. Port Covington will
include approximately 409,000 square feet of retail space and will
accommodate stores of approximately 1,000 square feet to
148,000 square feet.
7
U.S. Department of Housing and Urban Development, New Markets: The Untapped
Retail Buying Power in America’s Inner Cities. Washington, D.C., July 1999.
Big-box retail in
central cities
15
The above examples provide an overview of some of the latest
trends in big-box development. While there are some positive
aspects of retail development, such as the ability to benefit under-
served markets, the above examples also suggest that the retail
sector is increasingly becoming homogenous. The expansion of
large-scale retailers such as Wal-Mart, Home Depot and Circuit City
have continued to reduce the number of competitors/tenants (i.e.,
retailers both small and large) in shopping centers throughout the
United States. Accordingly, the continued expansion of big-box
retail presents both positive and negative aspects that warrant
thorough review by communities.
Sam’s Club under construction in the redevelopment of Westview Shopping
Center along Baltimore National Pike (Route 40 West).
16
The closing of a Wards store at the Security Square Mall in Baltimore County,
Maryland.
17
Section 2:
Big-Box Development in Maryland
Historical Overview
Historically, the retail industry in Maryland was quite robust.
According to data reported in the 1977 Census of Retail Trade,
Maryland’s 28,344 retail stores had sales totaling $14.4 billion
(Table 3). This figure reflected an increase of 52.7 percent over
sales reported in the previous census in 1972. In 1977, Maryland
had a total of 648 general merchandise stores compared to 558
stores in 1987 (Table 2). Total sales, however, for all retail stores
in 1987 was over $32.0 billion.
Table 2: General Merchandise Store Trends in Maryland
8
Business
Category
1977 1987 1997 % Change
1977 to
1987
% Change
1987 to
1997
% Change
1977 to
1997
General
Merchandise
648 558 598 -13.89 7.17 -7.72
Source: U.S. Census Bureau, Census of Retail Trade: Maryland
8
Comparability between census years may be limited. The 1997 Economic Census is the
first year to present data based on the North American Industry Classification System
(NAICS), while previous census data were presented according to the Standard Industrial
Classification System (SIC).
18
Table 3: Retail Sales in Maryland - Nominal $*
($000s)
Business
Category
1977 1987 1997 % Change
1977 to 1987
% Change
1987 to 1997
All Retail Trade
Stores
14,110,851 32,009,372 46,428,206 126.9 45.0
* Sales data not adjusted for inflation.
Source: U.S. Census Bureau, Census of Retail Trade: Maryland
Table 4: Retail Sales in Maryland - Constant 1996 $**
($000s)
Business
Category
1977 1987 1997 % Change
1977 to 1987
% Change
1987 to 1997
All Retail Trade
Stores
36,557,815 44,199,397 45,274,710 20.9 2.4
** Sales data adjusted for inflation. All Urban Consumers; Consumer Price Index
Source: U.S. Census Bureau, Census of Retail Trade: Maryland
Maryland Department of Planning, Capital Planning and Development Review
19
Current Overview
Per capita retail sales in Maryland, after adjusting for inflation (in
constant 1996 dollars), peaked in 1987 (Table 5). Since then,
sales have steadily declined in seven of the following nine years.
However, Maryland has experienced a 7.2 percent increase in the
number of general merchandise stores between 1987 and 1997
(Table 2).
Table 5: Per Capita Retail Sales in Maryland (1996 $)
Year $ Retail Sales
% Change
1987 9,874 -
1988 9,677 - 2.0
1989 9,464 -2.2
1990 9,395 - 0.7
1991 8,752 - 6.8
1992 8,436 - 3.6
1993 8,671 2.7
1994 9,209 6.2
1995 9,147 -0.7
1996 9,073 -0.8
Source: Maryland Department of Planning, Data Services
20
Table 6: Sample of Big-Box Retailers in Maryland
(As of July 2000)
Name of Store Number of Stores
Target 12
Sam’s Club 10
Wal-Mart
(including one Supercenter)
24
Kmart 27
Source: Maryland Department of Planning, Comprehensive Planning
According to the International Council of Shopping Centers (ICSC),
Maryland had approximately 900 shopping centers in 1998, with a
combined total of 124.7 million square feet of leasable retail area.
In June 2000, ICSC estimated that Maryland had a total of 126.7
million square feet of leasable retail space. Maryland also ranked
fourteenth in the nation in terms of its total amount of leasable
retail space when compared to other states (Table 7).
The Urban Land Institute (ULI) compiles retail data for metropoli-
tan areas. According to ULI’s Market Profiles 2000, 31 Regional
Centers in the Baltimore metropolitan area in 1999 had a vacancy
rate of 3 percent, and 385 nonregional centers had a vacancy rate of
2.5 percent.
21
Table 7: Top 20 in State Ranking of Gross Leasable Retail Area
(As of June 2000)
Rank State &
Amount of GLA (sq.ft.)
Rank State &
Amount of GLA (sq.ft.)
1. California 694.5 million 11. Virginia 171.0 million
2. Florida 427.7 million 12. Michigan 139.5 million
3. Texas 369.1 million 13. Tennessee 133.8 million
4. Illinois 260.0 million 14. Maryland 126.7 million
5. Ohio 248.8 million 15. Arizona 124.9 million
6. New York 247.4 million 16. Indiana 121.4 million
7. Pennsylvania 241.8 million 17. Missouri 114.3 million
8. Georgia 180.8 million 18. Massachusetts 113.8 million
9. North Carolina 176.4 million 19. Washington St. 100.7 million
10. New Jersey 171.8 million 20. Colorado 99.9 million
Source: International Council of Shopping Centers
22
Recent Opposition and Growing Concerns in the State
Since 1992, there has been an increasing concern regarding the
proliferation of big-box development in the State. The following is
a sample of jurisdictions that have either addressed local issues
regarding large-scale retail development, or are currently facing
local issues: Kent County (Chestertown), Baltimore County
(Owings Mills), Talbot County (Easton), Queen Anne’s County
(Stevensville), Montgomery County (Rockville) and Anne Arundel
County (Odenton and Parole).
Below is a brief overview of the experiences of each jurisdiction
noted above. This information is limited to the timeframe that
background research was conducted. (Some jurisdictions were still
in the process of addressing big-box issues while this report was
being finalized).
Kent County
Kent County serves as a national model for regulating big-
box development through the use of its comprehensive
plan. In 1993, residents, local organizations and planning
officials in Chestertown prevented the development of a
98,000 square foot Wal-Mart by upholding language in the
Kent County Comprehensive Plan.
The following can be found in the 1996 Kent County
Comprehensive Plan under the goals and strategies for the
local economy.
Retail
Goal: Develop diverse retail opportunities
that provide wide availability of
goods and services with competitive
selections and prices.
Strategy: Identify appropriate locations for
new commercial development.
23
The Economic Development Advisory Board and
Planning Commission will assess the existing mer-
chant mix and retail offerings, identify retail gaps,
and recommend appropriately zoned land. Large-
scale retail activities will be located on major
arteries that the Planning Commission determines
are capable of handling the traffic generated.
Other locations for large and medium scale retail
activities may be identified in the Village Master
Plan for larger communities. Small-scale retail
and convenience retail development will be
located in towns, villages, and their designated
growth areas as identified in the Village Master
Plans. These Master Plans will be developed by the
Planning Commission and Staff after consultation
with incorporated towns, unincorporated villages
and local residents. Any retail development in the
villages or their designated growth areas must be
compatible in size, scale, and architecture with
existing development and proposed design
guidelines.
9
Baltimore County
In 1996, Baltimore County officials rejected a proposal to
build a 500,000 square foot power center near Red Run
Boulevard in Owings Mills. The site, which was zoned only
for commercial uses such as manufacturing and offices, had
approximately 156 acres of developable land. The primary
basis for rejecting the proposal involved Baltimore County’s
desire to maintain the original plans to develop Owings
Mills as an employment center.
Since then, big-box retailers such as Toys “R” Us and Bed,
Bath & Beyond have signed leases and now occupy over
60,000 square feet of retail space along Reisterstown Road
in Owings Mills. Moreover, across from this location is the
redevelopment of the Garrison Forest Plaza. This project
has 117,000 square feet of retail space that encompasses
three big-box formats.
9
Kent County Planning Commission, Kent County, Maryland, Comprehensive Plan.
Kent County, Maryland, July 1996.
24
Talbot County
In April 2000, the Talbot County Planning Commission
rejected a proposal to build a 131,000 square foot Home
Depot near the city line of Easton. The primary basis for
denial involved a potential increase in traffic. In addition,
local organizations stressed that the Home Depot was not
a permitted use in Talbot County’s Limited Industrial Zone.
However, Home Depot and the developer submitted an
appeal to have the decision reversed.
A stereo-video big-box store located in the Garrison Forest Plaza in Owings
Mills, Maryland. The scale of the building serves as its own billboard.
25
Queen Anne’s County
In May 2000, Queen Anne’s County Commissioners prevented the
development of a 28-acre property called Kent Commons in
Stevensville. Plans for this site included a 155,399 square foot Wal-
Mart, a 3,000 square foot outdoor pavilion, a 85,181 square foot
hotel and conference center and a 6,300 square foot sports bar and
restaurant. In addition, the proposal included six other structures
that would accommodate more retail uses.
Queen Anne’s County Commissioners prevented the development
by denying the developers’ request to purchase an allocation of
28,202 gallons per day of public water and 44,972 gallons per day
in sewage treatment plant capacity. In addition to the denial of
water and sewer service, the commissioners stressed that traffic
generated by the development would affect public safety.
Montgomery County
Officials in Rockville, Maryland, imposed a moratorium on
commercial projects in the fall of 1999. This moratorium, which
covered a six-month period, involved a series of public hearings
to assess the impacts of large-scale retail development and draft
new legislation that would potentially limit the size of future big-
box retail development.
Anne Arundel County
In May 2000, a bill was introduced that would place limitations on
retail uses within Town Center Districts in Anne Arundel County
such as Odenton and Parole. The proposed legislation attempted
to restrict retail uses to not exceed 65,000 square feet of floor area
on any one floor of a structure. During this period, however, a
proposal for a Wal-Mart in Parole with a building footprint of
135,000 square feet, was introduced.
The bill had the ability to impact the Wal-Mart project, but it was
defeated in July 2000 by the Anne Arundel County Council. The
County Council, however, did not give final approval of the project.
26
Summary of Proposed Big-Box Legislation
in Anne Arundel County
(Introduced and first read on May 1, 2000)
ARTICLE 28: ZONING
Title 6. Special Districts
6-303. Permitted uses.
The following are permitted as permitted uses in a TC-Town Center District:
(1) Any use permitted in a C3-
General Commercial District, EXCEPT THAT A
RETAIL STRUCTURE
MAY NOT BE LOCATED WITHIN A SINGLE
FREESTANDING STRUCTURE THAT HAS MORE THAN 65,000 SQUARE FEET
OF FLOOR AREA ON ANY ONE FLOOR OF THE STRUCTURE.
Note: Capitals indicate new matter added to existing law.
Source: County Council of Anne Arundel County, Maryland
The above examples clearly show that Maryland has been, and
continues to be confronted with the proliferation of big-box
retailers. In addition, the above examples show that local jurisdic-
tions, citizens, community organizations and planners are taking
action to improve as well as curtail big-box development. The
methods and strategies being used include guidance through the
local comprehensive plan, zoning ordinances and community
impact assessments.
27
Section 3:
Impacts of Big-Box Development
Wal-Mart Stores, Inc., the world’s largest retailer, plans to open
more than 300 stores worldwide next year...40 discount stores and
170 to 180 Supercenters...40 to 50 Sam’s Clubs...In addition, Wal-
Mart International will open 100 to 110 stores.
— Baltimore Sun (10/3/2000)
Home Depot says it will open another thousand stores in the
Americas over the next three years. Does Peru need more power
tools? Ecuador, more caulking guns? Maybe the world is just
another suburb waiting to be conquered.
— CBS News, Sunday Morning (8/27/2000)
Overview and Findings of Relevant Studies
The previous sections discussed the latest trends in big-box
development and focused on some examples of big-box issues
faced by local jurisdictions in Maryland. This section expounds
upon the previous sections by examining the impacts of big-box
development. Findings from studies conducted over the past
two decades are noted. This section also discusses other
impacts such as the effects of an abandoned retail facility on a
community and the implications of Internet-based retailers.
28
Communities experiencing economic hardships often believe that
more land zoned for commercial uses such as office and retail can
act as an incentive to help boost the local economy. Moreover, the
expansion of discount retailers, or perhaps the notion of providing
more places for people to shop, is often seen as a remedy to
enhance the local tax base, increase revenues, provide more job
opportunities and offer residents a wide variety of quality products
at low prices. While these are desirable attributes, economist
William H. Fruth shares a different view in a paper titled, The Flow
of Money and Its Impact on Local Economies.
Retail is the most consumptive. That is why when we pur-
chase something we are called “consumers.” There is
nothing wrong with having retail in the economy...[b]ut
the act of purchasing drains wealth from the area. Retail is
absolutely dependent upon the condition of the local
economy. It cannot grow any greater than the amount of
disposable income within the economy. It will decline if
the flow of money into an area is reduced. It does not
create wealth but absorbs wealth. A vibrant, dynamic retail
sector is not the cause of a strong local economy, but the
result of it.
10
Another criticism of retail development is that it creates jobs that
require minimal skills. In addition, the wages for many retail jobs
are relatively low. However, jobs in this sector are anticipated to
increase from 10 percent to 20 percent through the year 2008 in
the U.S. Job growth in Maryland’s retail sector is also anticipated to
increase (Table 8).
10
Fruth, William H., The Flow of Money and Its Impact on Local Economy. National Association of
Industrial and Office Properties, February 2000.
More on the
advantages and
disadvantages of
big-box retail
development
29
Table 8: Retail Trade Employment Growth in Maryland
Retail Jobs
in 1995
Projected Retail Jobs
in 2005
Projected Retail Jobs
in 2010
483,000
541,800 569,200
Source: Maryland Department of Planning, Data Services
U.S. Bureau of Economic Analysis
The impacts of big-box development can be described using the
following categories: economic and fiscal; social and cultural;
and environmental. In each of these categories, findings are
noted from studies conducted over the past two decades.
Economic and Fiscal Impacts
Kenneth E. Stone, a professor and economist at Iowa State
University, conducted a series of studies that evaluated the
effects of Wal-Mart on small towns and rural communities in Iowa
between 1983 and 1993. Stone studied 34 towns with
populations between 5,000 and 30,000 that had a Wal-Mart store
for at least ten years. These towns were compared to 15 towns
with the same population groups that did not have a Wal-Mart.
Summary Findings
• Towns with a Wal-Mart typically experienced a
53.6 percent increase in sales in the general mer-
chandise category following the opening of a Wal-
Mart store. However, sales were only up by 43.6
percent in the following third and fifth years,
respectively.
• Towns that did not have a Wal-Mart experienced a
5.2 percent decline in sales in the general mer-
chandise category after the first year a Wal-Mart
was developed in a nearby town, and a 12.9
percent decline in sales after five years.
30
• Restaurant sales in towns with a Wal-Mart were up
by 3.2 percent the first year after the opening of a
Wal-Mart, then increased to 4.8 percent after
three years. However, sales returned to a 3.2 per-
cent level after five years.
• Between 1983 and 1993, smaller towns and rural
areas (below 5,000 population) that did not have
a Wal-Mart store experienced a loss of $2.1 billion
in total retail sales.
• Towns (less than 5,000 population) within a 20-
mile radius experienced a 5 percent reduction in
sales after the first year a Wal-Mart opened, and a
17.6 percent reduction after the first three years.
In another study, Stone assessed the impacts of big-box retailers
on eight cities in Iowa. (Cities were defined as municipalities with
a population of 50,000 or more).
Summary Findings
• Cities without a Wal-Mart experienced a 2.8
percent decrease in sales in the general merchan-
dise category after the first year a Wal-Mart was
developed in a nearby town, and a 9.5 percent
decrease after the first five years.
• Restaurant sales in cities with a Wal-Mart were up
0.5 percent after year one, and up by 2.9 percent
after the first five years.
• Specialty store sales in cities with a Wal-Mart were
up 0.9 percent after the first year a Wal-Mart was
developed, and up by 5.5 percent after the first
five years.
31
In a study titled, The Impact of Big-Box Development on Toronto’s
Retail Structure, authors Ken Jones and Michael Doucet discover
findings similar to Stone. Jones and Doucet conducted research on
big-box development in the greater Toronto, Canada area (popula-
tion of 2.4 million in 1996).
Summary Findings
• Big-box employment in the following retail
categories: supermarkets, electronics, hardware,
toys/sporting goods, and books and office prod-
ucts, increased by 60.9 percent between 1993 and
1997. However, employment in non-big-box
formats in the same five categories decreased by
2.1 percent in the City of Toronto.
• Between 1994 and 1995, there was a 15.9 percent
chance that retailers operating on streetfront
locations in Toronto in the electronics, hardware,
toys/sporting goods, and books and office product
categories would close within the year. The stores
with the highest closure rates were office products
and electronics. Stores in closest proximity to a
big-box store experienced the greatest impact.
• In a survey of 200 storefront retail strips that
provide citizens with access to over 18,000 retail
shops, sales declined from 53.7 percent in 1994 to
49.5 percent in 1997 for all occupied stores. The
following retail categories experienced the greatest
decline in sales: hardware (-10.4 %) and general
merchandise (-3.9 %).
• Between 1994 and 1997, storefront retail strips in
direct competition with big-box formats experi-
enced closures of 11 and 8 stores, respectively, in
the hardware and electronics categories.
32
• Between 1989 and 1997, the specialty retail
category (including big-box and non big-box
formats) experienced the greatest growth. By
1996, big-box specialty retailers accounted for 25
percent of specialty retail sales, while storefront
specialty retailers accounted for 5 percent of sales.
The above studies clearly show that there are both positive and
negative impacts of big-box stores. The positive aspects include
strong, initial growth in overall retail sales as well as in the general
merchandise and specialty categories. Another positive aspect is
increased sales in the eating and drinking category, particularly
among restaurants near big-box stores. The negative aspects
include a reduction in big-box retail sales after the first three years
of a big-box development and a reduction in the number of non-
big-box stores, particularly stores in close proximity and/or in direct
competition with a big-box.
33
Environmental Impacts
Big-boxes also threaten the environment. The findings below come
from Aesthetics, Community Character, and the Law. (Additional
sources have been footnoted). The findings below are primarily
examples of environmental and energy impacts that communities
across the nation have viewed as elements that affect “community
character.” These findings have been used as a basis to adopt
measures that limit big-box development.
34
Summary Findings
§ A 110,00 square foot shopping center can generate as
many as 946 car trips per hour and 9,710 trips per day.
While this may be somewhat comparable to
conventional retailers, big-box retailers generate far
more truck trips due to higher sales volumes and
merchandise turnover. For example, a home
improvement store can generate 35 tractor-trailer trips
per day.
11
§ The size of most big-box facilities often increases the
demand for public water and sewer services. This also
imposes a fiscal impact on a local economy.
§ A big-box retailer as a “stand alone” structure, or
grouped with other structures to form a power center,
is often designed to be inaccessible to pedestrians.
Moreover, developers of big-boxes often look for sites
that are adjacent to two thoroughfares. This often
yields concerns regarding pedestrian safety as well as
increased traffic congestion and accidents.
§ Big-boxes adjacent to other commercial uses often
cause problems such as excessive noise, poor traffic
access management, increased demand for road repair
and traffic control, and demand for improved lighting.
These problems also impose a fiscal impact on a local
economy.
The above findings indicate ways that big-box retail development
can affect the economic and environmental conditions of a local
economy, particularly in an area where policies and regulations
have not been established to assure proper location and develop-
ment of large-scale retail facilities.
Social and Cultural Impacts
Big-boxes can also affect the “livability” of an area, or the
social and cultural qualities deemed important by a
community such as open space, pedestrian-friendly main-
streets, and clean air and water. The findings below are
11
Beaumont, Constance E., How Superstore Sprawl Can Harm Communities. National Trust for Historic
Preservation, 1994.
35
examples of social and cultural impacts of big-box
development noted in How Superstore Sprawl Can Harm
Communities and The Home Town Advantage: How to
Defend Your Main Street Against Chain Stores. (Additional
sources have been footnoted).
Many of these impacts have environmental and fiscal implications as
well. These impacts have encouraged communities throughout the
United States and abroad to develop standards through careful
planning and legal draftsmanship, coupled with a strong
commitment to common-sense implementation and consistent
administration.
12
Summary Findings
• Increased traffic due to big-box development can potentially
increase pollution in the area or affect nearby, environmentally
sensitive zones.
• Oil run-off from the surface parking lot of a big-box development,
or chemicals that are not handled properly in a big-box
development that sells garden supplies can potentially
contaminate the water supply of a local community.
• Increased traffic and noise pollution due to big-box development
may potentially lower the value of nearby homes purchased by
people who reasonably assumed that the area would remain
peaceful and attractive.
• Communities often experience a reduction in the number of
small-scale, locally-owned retailers that are in direct competition
with big-box retailers. A reduction in locally-owned businesses, in
12
Duerksen, Christopher and R. Matthew Goebel, Aesthetics, Community Character, and the Law. Planning
Advisory Service, American Planning Association, December 1999.
36
some instances, can increase unemployment rates and the
number of vacant buildings, which can potentially affect the
economy of an area.
• Big-boxes often require high visibility from major public streets.
The strong, image-making design of a big-box development can
be detrimental to a community’s sense of place when it does not
contribute to or integrate with the surrounding area in a positive
way.
Other Related Impacts
The above economic, environmental and social impacts all relate to
a proposed big-box development or an existing big-box
development. This section, however, looks at the implications
surrounding the closing of a big-box retailer, which may be more
important to a community than the initial development problems.
Communities across the nation are beginning to witness the “dou-
ble impact” of big-box development. In other words, communities
are not only experiencing economic problems due to a loss of
small-scale, locally owned businesses, but also land-use problems
due to increased competition among big-boxes that have left a
number of abandoned buildings in communities nationwide.
Retailers such as Silo, Best, Smith’s Home Furnishings and various
Hechinger stores have all gone out of business because they were
unable to compete with retailers like Wal-Mart, Circuit City, Home
Depot and The Room Store.
During the research phase of this report, OfficeMax announced the
closing of 50 stores, J.C. Penny Co. announced the closing of 47
stores, and Wards decided to close all of their store locations.
13
13
According to Shopping Centers Today (March 7 and 8, 2001), The May Department Stores Co. plans to
purchase 13 former Wards locations and reopen most of them in 2002. Also, Target Corp. purchased the
leasing rights to 35 Wards sites and will convert 30 of them into Target stores.
37
Summary Findings
• Empty big-boxes contribute to an overall increase in
commercial vacancy. The R.H. Johnson Company noted this
in a survey conducted on thirteen submarkets in the Kansas
City, Missouri, metropolitan area. In January 2000, R.H.
Johnson found that big-boxes (a retail store consisting of
25,000 square feet or more) accounted for 56.8 percent of the
total commercial vacancy in the Kansas City area. In terms of
total square feet, however, big-boxes had a vacancy rate of 4.8
percent.
• Since most big-box retailers lease their store space, landlords
often face significant economic problems when a big-box
tenant goes out of business or relocates. This can also
potentially impact an area’s economy. (Table 9 provides a
basic analysis of the potential loss of revenue after a big-box
closes).
• Internet-based retailers are also impacting big-box retailers as
well as states and cities. In the July 2000 issue of Planning,
Ruth Eckdish Knack looks at this issue in an article titled, “Retail
Versus E-tail.” Knack notes the following from a study con-
ducted by the Center on Budget and Policy Priorities: “...by
2003, states and cities will lose up to $15 billion annually in tax
revenue. Sales taxes now account for an average of 40
percent of state revenues. Current law requires Internet-based
retailers to collect sales taxes only if they have an outlet in the
state the order is shipped to.”
Table 9:
Potential Loss of Revenue for an
Empty 100,000 Square Foot Retail Store
Sales Per Gross Square
Foot to Remain
Profitable
$250
(typical suburban market)
$350
(typical urban market)
Annual
Loss of Revenue
$25,000,000 $35,000,000
Asking Rent Per
Square Foot to Remain
Profitable
$12
(typical suburban market)
$15
(typical urban market)
Annual
Loss of Revenue
$1,200,000 $1,500,000
38
• Bankruptcy laws often prevent landlords from controlling what
happens to their own properties. Leased spaces often remain
in the control of other entities or retailers that have purchased
the rights to store space and continue to look for other users
they can put into them on the terms of the existing lease(s).
The findings above describe the impacts of vacant big-boxes that
occurred as a result of increased competition, mergers and
relocations. The cumulative impacts often result in a loss of
revenue and a potential increase in unemployment. In addition,
the visual impact of an empty big-box often stimulates the
perception of blight and urban decay. Lastly, the closure of a big-
box can potentially impact dependent businesses such as banks,
insurance companies, and nearby restaurants and grocery stores,
which have a financial link to the success or failure of a big-box.
39
Former Hechinger store in the Reisterstown Plaza Shopping Center in northwest
Baltimore, Maryland.
Section 4:
Regulatory Strategies and Market Approaches
The expansion of big-box development over the last two decades
has presented a number of challenges to cities and towns across
the United States and abroad. These challenges, however, have
encouraged many communities to find creative solutions to many of the problems
What can state
and local
governments do?
40
generated by big-boxes as described in the previous section. This section focuses
on strategies used in other cities and states, as well as strategies used in a big-box
project in Gaithersburg, Maryland. This section also presents solutions for small-
scale retailers that will allow them to compete more effectively with large-scale
retailers.
City of Mequon, Wisconsin
In Mequon, Wisconsin, the municipal zoning ordinance is used
as a means to restrict and place special conditions on big-box
development. Strategies include design considerations and size limitations.
B-2 Community Business District
(a) The B-2 District is established to accommodate the retail and service
needs of the greater community.
(b) General Requirements
1. Buildings shall be designed in individual or small groupings gen-
erally not to exceed 20,000 square feet per structure. The commer-
cial development shall be designed and sized in a manner which is
architecturally, aesthetically and operationally harmonious with the
surrounding development.
Source: City of Mequon, Wisconsin, Zoning Ordinance
City of St. Petersburg, Florida
Officials in St. Petersburg, Florida, amended their comprehensive plan to include
new policies to help control the level of retail development. Based on an analysis
that looks at the ratio of population to retail space, planning staff recognized that
they had an “over supply” of retail space. An over supply exists when there is
more than one acre of commercial land for every 150 residents. This analysis
aided the City of St. Petersburg in rejecting a 220,000 square foot Wal-Mart
supercenter.
14
14
Walters, Jonathan, “Anti-Box Rebellion.” Governing, July 2000.
Local
Government
Examples
41
Summary of Applicable St. Petersburg Policies
Land-Use Policies
1.4 The City may permit higher intensity uses outside of activity centers only
where available infrastructure exists and surrounding uses are compatible.
2.4 The tax base will be maintained and improved by encouraging the appro-
priate use of properties based on their locational characteristics and the goals,
objectives and policies within this Comprehensive Plan.
2.17 The City has an adequate supply of commercial land-use to meet existing
and future needs. Future expansion of commercial uses shall be restricted to
infilling of existing commercial areas and activity centers except where a need
can be clearly identified.
2.18 All retail and office activities shall be located, designed and regulated so
as to benefit from the access afforded by major streets without impairing the
efficiency of operation of these streets or lowering the LOS [level of service]
below adopted standards, and with proper facilities for pedestrian con-
venience and safety.
Source: City of St. Petersburg Adopted Comprehensive Plan
Summary of Applicable St. Petersburg Policies
(Continued)
Land-Use Policies
20.2 Land-use patterns that impair the efficient functioning of transporta-
tion facilities shall be avoided through:
(2) Denial of land-use plan amendments that increase the frontage of
commercial strips.
Source: City of St. Petersburg Adopted Comprehensive Plan
42
City of Gaithersburg, Maryland
The Washingtonian Center in Gaithersburg serves as a local example that places
special restrictions on big-boxes within a main-street environment. The Center,
located between Washingtonian Boulevard and Interstate 270, was developed on a
103-acre parcel of land. The local master plan contained language that indicated
the parcel should be developed as a mixed-use center. Criteria for the site
required buildings to front streets, parking to be located at the rear of buildings
and limits on building size.
Summary of Applicable Land-Use Recommendations from the
1985 Gaithersburg, Maryland, Vicinity Master Plan
The Plan recommends that the Shady Grove West Study Area continue to be
designated as a major employment and housing center due to its strategic
location in the I-270 Corridor.
Specifically, the Plan recommends that:
• The Washingtonian property, adjacent to I-270 and also part of the R&D
Village, be designated on the proposed Land-Use Plan as suitable for the
MXPD Zone and be developed as a “planned employment center” with
offices, a small amount of retail development, and residential uses.
Summary of Applicable Land-Use Recommendations from the
1990 Shady Grove Study Area: Stage III Gaithersburg Vicinity
Master Plan Amendment*
This Plan confirms the 1985 Gaithersburg Vicinity Master Plan
recommendations for this parcel which has guided the review and approval
of the MXPD (Mixed-Use Planned Development) Zone for the Washingtonian
Center.
• Mitigate the effects of noise from proposed I-370 through design and con-
struction techniques.
• Encourage decked or underground parking.
• Enhance existing ponds and landscaping.
•
Respect the existence of the Washington Tower and other adjoining
43
communities in terms of site design quality and provide a vegetative
buffer on the western edge of the Washington Tower property.
* Note: Four parcels of land were annexed into the City of Gaithersburg in 1991 as part of the
Washingtonian Center. Zoning remained MXPD, while the adopted land -use designation was
commercial/industrial-research-office.
Kohl’s is one of several big-box retailers located in the Washingtonian Center. Big-boxes are
designed within a “main-street” environment.
City of Portland, Oregon
In 1990, the Portland City Council adopted a design review ordinance
including a design review process and basic guidelines. The ordinance, in
part, was established to help implement the goals and objectives of the
Portland Central City Plan. The guidelines focus on a broad range of
aspects that meet the basic expectations of the City. However, they are not
intended to be inflexible requirements.
44
Summary of Applicable Design Guidelines
in Portland, Oregon
Architectural Integrity
• Exterior modification of an existing structure should respect the original
character of the building. Additions to existing buildings are encouraged to be
compatible in size, scale, color, material and character with the existing building.
• Achieve design compatibility between new and existing buildings by using a
design vocabulary that adds to the identity and character of an area.
• Differentiate between the building facade at the sidewalk level and the floors
above.
• Use building materials and design features that promote permanence, quality
and delight.
Portland Personality
• Incorporate Portland related themes into a project design, where appropriate.
• Enhance the identity of Special Districts by incorporating small-scale features that
add to the District’s identity and ambiance. Embellish with elements that build
district character and respect district traditions.
• Re-use, rehabilitate and restore buildings and building elements, where
appropriate.
• Define public rights-of-way in a manner which creates and maintains a sense of
urban enclosure.
Source: Portland Central City Plan Fundamental Design Guidelines
Summary of Applicable Design Guidelines
in Portland, Oregon
(Continued)
Pedestrian Emphasis
• Recognize the different zones of a sidewalk: curb, street furniture zone,
walking zone and window shopping zone.
• Where appropriate, develop pedestrian routes through sites and
buildings to supplement the public right-of-way. Provide an attractive,
convenient pedestrian accessway to building entrances.
• Integrate an identification, signage and lighting system which offers
interest, safety, vitality and diversity to the pedestrian.
45
• Protect the pedestrian from vehicular movement.
• Whenever possible, provide weather protection for the pedestrian at the
ground level.
Source: Portland Central City Plan Fundamental Design Guidelines
City of Fort Collins, Colorado
In 1995, the City Council of Fort Collins approved and adopted an ordinance to
regulate large-scale retail establishments. This ordinance was also accompanied by
a manual of design standards and guidelines to serve as a tool for big-box
development. These standards and guidelines were placed within the framework
of Fort Collins’ Land Development Guidance System and Land-Use Code. A
building moratorium was imposed to study the impacts of big-box development in
the region.
Somerset County, New Jersey
In 1998, the Regional Center Partnership developed a set of design guidelines for
large-scale retail development in communities in Somerset County, New Jersey.
The Partnership modeled its guidelines after strategies used in Fort Collins,
Colorado. State law in New Jersey, unlike Colorado, prohibits the establishment of
moratoriums (N.J.S.A. 40:55D-90a).
Summary of Standards and Guidelines
in Fort Collins, Colorado
Facades and Exterior Walls
Facades should be articulated to reduce the massive scale and the uniform,
impersonal appearances of large retail buildings and provide visual interest
that will be consistent with the community’s identity, character and scale.
• Facades greater than 100 feet in length, measured horizontally, shall
incorporate wall plane projections or recesses having a depth of at least
3% of the length of the facade and extending at least 20% of the length
of the facade. No uninterrupted length of any facade shall exceed 100
horizontal feet.
• Ground floor facades that face public streets shall have arcades, display
windows, entry areas, awnings, or other such features along no less
than 60% of their horizontal length.
•
Building facades must include a repeating pattern that shall include no
46
less than three of the following elements: color change; texture change;
material module change; and expression of architectural or structural
bay through a change in plane no less than 24 inches in width, such as
an offset, reveal, or projecting rib. All elements shall repeat at intervals
of no more than 30 feet, either horizontally or vertically.
• The minimum setback for any building facade shall be 35 feet from the
property line. Where the facade faces adjacent residential uses, a berm,
no less than 6 feet in height, containing at a minimum evergreen trees
planted at intervals of 20 feet on center, or in clusters or clumps shall
be provided.
Summary of Standards and Guidelines
in Fort Collins, Colorado
(Continued)
Materials and Colors
Exterior building materials should be aesthetically pleasing, and compatible
with materials and colors used in adjoining neighborhoods.
•
Predominant exterior building materials shall be high quality materials.
These include, without limitation: brick, sandstone, other native stone,
wood and concrete masonry units that are tinted and textured.
•
Facades shall be of low reflectance, subtle, neutral or earth tone colors.
The use of high intensity colors, metallic colors, black or fluorescent
colors is prohibited.
• Building trim and accent areas may feature brighter colors, including
primary colors, but neon tubing shall not be an acceptable feature.
• Predominant exterior building materials should not include the
following: smooth-faced concrete block, tilt-up concrete panels and pre-
fabricated steel panels.
47
Roofs
Roof features should be used to compliment the character of the adjoining
neighborhoods. Variations in roof lines should be used to add interest to, and
reduce the massive scale of large buildings. Roofs shall have no less than two
of the following features:
•
Parapets concealing flat roofs and rooftop equipment from public view.
The average height of such parapets shall not exceed 15% of the height of
the supporting wall and such parapets shall not at any point exceed one-
third of the height of the supporting wall. Such parapets shall feature
three dimensional cornice treatment.
• Overhanging eaves, extending no less than 3 feet past the supporting
walls.
• Sloping roofs that do not exceed the average height of the supporting
walls, with an average slope greater than or equal to 1 foot of vertical rise
for every 1 foot of horizontal run, and less than equal to 1 foot of the
vertical rise for every 1 foot of horizontal run.
• Three or more roof slope planes.
Summary of Standards and Guidelines
in Fort Collins, Colorado
(Continued)
Entryways
Entryway design elements and variations should give orientation and
aesthetically pleasing character to the building. Large-scale buildings should
feature multiple entrances. Multiple entrances reduce walking distances
from cars and provide greater access from public sidewalks.
Each principal building on a site shall have clearly defined, visible customer
entrances featuring no less than three of the following:
• Overhangs, canopies or porticos.
• Recesses/projections.
• Arcades.
• Raised corniced parapets over the door.
• Peaked roof forms.
48
• Arches.
• Outdoor patios.
• Display windows.
• Architectural details such as tile work and moldings which are
integrated into the building.
• Integral planters or wing walls that incorporate landscaped areas and/or
places for sitting.
Where additional stores will be located in the principal building, each such
store shall have at least one exterior customer entrance, which shall conform
to the above requirements.
Summary of Standards and Guidelines
in Fort Collins, Colorado
(Continued)
Pedestrian Flows
Public sidewalks and internal pedestrian circulation systems should provide
user-friendly pedestrian access as well as pedestrian safety, shelter and con-
venience within the center grounds.
• Sidewalks at least 8 feet in width shall be along all sides of the lot that
abut a public street.
• Internal pedestrian walkways provided in conformance with the infor-
mation below, shall provide weather protection features such as
awnings, or arcades within 30 feet of all customer entrances.
• Continuous internal pedestrian walkways, no less than 8 feet in width,
shall be provided from the public sidewalk or right-of-way to the prin-
cipal customer entrance of all principal buildings on the site. At a
minimum, walkways shall connect focal points of pedestrian activity
such as, but not limited to, transit stops, street crossings, building and
store entry points, and shall feature adjoining landscaped areas that
include trees, shrubs, benches, flower beds, ground covers, or other
such materials for no less than 50% of their length.
49
• Sidewalks, no less than 8 feet in width, shall be provided along the full
length of the building along any facade featuring a customer entrance,
and along any facades abutting public parking areas. Such sidewalks
shall be located at least 6 feet from the facade of the building to
providing planting beds for foundation landscaping, except where
features such as arcades or entryways are part of the facade.
• All internal pedestrian walkways shall be distinguished from driving
surfaces through the use of durable, low maintenance surface materials
such as pavers, bricks, or scored concrete to enhance pedestrian safety
and comfort, as well as the attractiveness of the walkways.
Vermont and New Jersey serve as two model examples in the
regulation of big-box development at the State level. While big-
box retail is not explicitly stated in the Vermont Statutes or the
New Jersey State Plan, both states have guiding policies that
address many of the impacts of large-scale retail development.
Summary of Applicable Vermont Statutes
Purpose; Goals
To encourage the use of resources and the consequences of growth and development for the
region and the state, as well as the community in which it takes place.
To encourage and assist municipalities to work creatively together to develop and implement
plans.
Intensive residential development should be encouraged primarily in areas related to community
centers, and strip development along highways should be discouraged.
Economic growth should be encouraged in locally designated areas, or employed to revitalize
existing village and urban centers, or both.
Conditional Uses
Such general standards shall require that the proposed conditional use shall not adversely affect:
• The capacity of existing or planned community facilities.
• The character of the area affected.
• Traffic on roads and highways in the vicinity.
State
Government
Examples
50
Such specific standards may include requirements with respect to:
• Minimum lot sizes.
• Performance standards.
• Minimum off-street parking and loading facilities.
• Landscaping and fencing.
• Design and location of structures and service areas.
• Size, location and design of signs.
Source: Vermont Statutes Online -Title 24: Municipal and County Government
Summary of Applicable New Jersey State Plan Policies
Economic Development
• Coordinate economic development activities both horizontally on each level of
government and vertically among the levels of government.
• Provide adequate capital facilities, whether publically or privately owned or
maintained, to meet economic development objectives of the Planning Area.
• Strategically locate State facilities and services to anchor and support major
economic development and redevelopment activities in areas of existing
development, particularly in mixed-use developments or Centers, with adequate
infrastructure capacity.
• Provide financial and technical assistance for the adaptive reuse of obsolete or
underutilized public and private facilities for appropriate economic development
purposes.
Comprehensive Planning
•
Coordinate the review of plans, ordinances, programs and
projects that potentially
51
have a “greater-than-local” impact to minimize regional and local impacts.
• Participate actively in multi-jurisdictional planning programs that will help to
achieve fiscal efficiencies in the delivery of public services and assure compatibility
with plans of adjacent communities.
• Develop plans that are integrated and coordinated with plans at all levels of
government, with special attention paid to the impacts of State functional plans on
land-use and with greater participation of the departments of health, human
services and public safety and boards of education and other agencies not
traditionally involved in comprehensive planning processes.
Source: New Jersey State Development and Redevelopment Plan - Online
Market Analysis
A market analysis is one way for a community to determine
if there is a demand for retail development, or if a
community can support a large-scale retail format. A
market analysis identifies the most likely users of a project
and how well consumers are being served by existing
businesses.
The initial step to conducting a market analysis often begins with
determining the trade area of a subject location. A trade area is generally
described as the geographic boundary that surrounds a proposed or
existing development from which 70 percent to 80 percent of the customers
are typically drawn. The geographic boundary can also be determined by
driving times to the subject location. Typically, the primary trade area is
often described as a two-mile radius or polygon of a subject location, and
the secondary trade area is described as a three-mile radius or polygon of a
subject location. Trade areas can also be affected by physical barriers such
as a highway or a body of water.
After the trade area is defined, the next step is to collect essential socio-
economic data in order to assess the market. Socio-economic data can
include current and future population and household projections, median
and average household income, and expenditures per household. Retail
data can also be collected on the following: retail sales trends by business
What are some market
approaches that local
governments can use?
52
category and service, the number of retail establishments and the estimated
square feet of gross leasable area.
Finally, an analysis can be performed to assess the performance of other
competing retail stores in the trade area to determine if a community can
support a proposed or existing retail facility. This information, coupled
with the above, will help determine the overall square footage of a
proposed retail development, or the feasibility of new retail uses.
The information below is a brief, hypothetical market analysis for Allegany
County, Maryland. The objective here is to determine if a 100,000 square
foot general merchandise store can be supported.
General Market Analysis for Allegany County, Maryland
with a Proposed 100,000 Square Feet Store
28,250 Households x $28,400 Median Household Income (1998 dollars)
= $802,300,000 is the Effective Buying Power
28,250 Households x $37,900 Mean Household Income (1998 dollars)
= $1,070,675,000 is the Estimated Total Income
28,250 Households x $4,548 General Merchandise Expenditures per
Household in Allegany County, MD
= $128,481,000 is the Sales Potential for General Merchandise
$128,481,000 Sales Potential/$250 Sales Per Square Feet (Gross) Needed to
Support New Store
= 513,924 is the amount of Supportable Square Feet for General
Merchandise Assuming at least 80 percent of the Market can be
Captured in the Trade Area
* 513,924 Supportable Sq.Ft. Vs. 100,000 Proposed Sq.Ft. *
Assuming all economic conditions are held constant in Allegany County, a
100,000 square foot general merchandise store could be supported. Existing
retail space, however, must be at or below 413,924 square feet.
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The above example illustrates a basic step that local jurisdictions can take to assess
the need for new commercial development (including office and retail).
The following is a list of additional questions that should be addressed in a
market analysis or during a community planning process:
• How much land is currently zoned for commercial use (includes office
and retail)?
• Where are retailers, particularly big-box retailers, locating and why?
• Is there a “surplus” of retail sales revenue in the community, or is there a
“leakage” of retail sales revenue to places outside of the community’s
trade area?
• Are there any industrial zones and/or abandoned industrial facilities that
could potentially be converted to retail space?
• What are the potential impacts of new retail development on the existing
community as well as the larger area?
• What are the economic development goals and objectives of the
community, and how will they be implemented?
• What locations in the community are targeted for economic
development, and what areas are currently under-served?
The recent proliferation of big-box development in Maryland as well as other states
warrants the need for communities to take a proactive approach. Many
communities, however, have only been able to take a reactive approach after a
proposal has been submitted or a notice that indicates a proposed change in
zoning has been posted. Still, knowing the local market and the basic criteria
for big-box development can aid a community planning process.
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The basic criteria for big-box development often includes the following:
• Trade area with a minimum population of 50,000.
• Trade area that has a minimum two- to five-mile radius.
• Maximum car accessibility (by locating near the intersection of two
thoroughfares).
• Minimal land costs.
• Maximum visibility.
Market Strategies
The majority of the strategies discussed above have been land-use based. In this
section, however, market strategies regarding how small-scale retailers and local
merchants may be able to compete with big-box retailers are discussed. This
information may also be useful to local jurisdictions that are seeking ways to
improve economic development initiatives. The majority of this information
comes from work by economist Kenneth E. Stone.
Policy Actions
• Evaluate the impact of incentives given to large firms or big-box
developers.
• Evaluate if a proposed big-box development will enlarge a town’s trade
area.
• Evaluate if there are ways to capitalize on the increased volumes of
traffic generated by big-box development.
Merchandise Actions
• Research and buy from new, innovative vendors.
• Seek opportunities to carry different brands, styles etc.
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• Avoid big-store name brands whenever possible.
• Get rid of old merchandise that does not sell or generate a profit.
• Look for opportunities to purchase goods with other local merchants.
Presentation and Marketing Actions
• Replace conventional store fixtures with innovative or unusual
alternatives.
• Adjust store operating hours whenever possible.
• Improve product return policies and procedures.
• Seek opportunities to modify prices whenever possible.
• Know your customers and focus advertising towards this group.
• Know your competitive advantage in the local market place.
• Emphasize technical expertise and advice on products and services.
• Have employees dress in casual attire.
Service Actions
• Seek opportunities to offer delivery services.
• Seek opportunities to develop special orders.
• Offer on-site installation and service on certain items.
• Seek opportunities to train and continue training employees.
Customer Service Actions
• Make sure customers receive a friendly “greeting” or post a greeting
sign.
• Treat employees as part of a team.
• Seek opportunities to solicit complaints and resolve customer problems.
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Summary of Regulatory Strategies
This section presented a myriad of strategies used to regulate big-box
development. It is important, however, to underscore that citizen participation
played a key role in the development of the strategies used in each of the above
states, cities and small towns. The primary lesson from each of the above
examples is that a proactive approach must be used when dealing with big-box
development rather than a reactive approach. Below is a summary of regulatory
tools and strategies discussed in this section.
• Municipal Comprehensive Plan
• Municipal Zoning Ordinance
Ø Size and height limitations
Ø Conditional use restrictions
Ø Operational use requirements
• Market Analysis
Ø Assess if “retail caps” are warranted on the amount of land
designated for retail development
• Impact Assessments and Development Fees
• Inter-Jurisdictional Coordination and Agreement
• Design Review and Design Guidelines
• Performance-based Approaches and Standards
Ø Assess the relationship of the proposed project to the local
comprehensive plan
Ø Assess the impacts of the proposed project on the character of the
area
Ø Require traffic access management and traffic congestion controls
Ø Require screening and landscaping
Ø Evaluate the impact on noise in the area
Ø Evaluate the impact on pollution (e.g., air, water) in the area
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Section 5:
Relation to Smart Growth
The proliferation of big-boxes in the State has raised concerns about the ability of
Smart Growth legislation to control large-scale retail development. This section
discusses the limits of Smart Growth legislation, including basic planning and land-
use regulatory powers of the State’s municipalities noted in Article 66B of the
Annotated Code of Maryland.
Overview of Smart Growth
It is important to begin this section with an overview of Smart Growth and its
evolution. In 1996, Governor Parris N. Glendening embarked upon an effort to
establish legislation that would strengthen the State’s ability to direct growth and
enhance older urban areas.
The 1997 Smart Growth Areas Act is the primary piece of legislation that capitalizes
on the influence of the State to direct funding for development in existing
communities or to those places designated by the State or local governments for
growth, which are called Priority Funding Areas (PFAs). While Smart Growth
initiatives are primarily fiscal planning and capital improvement strategies, they
have the ability to influence local governments through the revision and update of
their comprehensive plans to reflect the goals of Smart Growth as well as policies
established in the 1992 Economic Growth, Resource Protection and Planning Act.
Smart Growth legislation automatically designates the following locations as PFAs:
municipalities, Baltimore City, areas inside the Baltimore and Washington beltways,
neighborhoods that have been designated by the Maryland Department of Housing
and Community Development for revitalization, Enterprise Zones, and Heritage
Areas within county designated growth areas.
Counties have the ability to designate or to not designate all of the areas the State
defines as eligible for priority funding. In addition, county designation of PFAs
does not restrict the location of private sector or county development. County-
designated PFAs are simply areas the county wants to be eligible for State funded
projects. Eligible areas are as follows:
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• Areas with new industrial zoning in a county-designated growth area
that is served by a sewer system;
• Areas with employment as the principal use which are served by, or
planned for, a sewer system in a county-designated growth area;
• Existing communities within county-designated growth areas which are
served by a sewer or water system, and which have a density of 2
dwelling units per acre; and
• Rural villages designated in local comprehensive plans.
Other eligible areas within county-designated growth areas include zones that:
• have a permitted density of 3.5 or more units per acre for new
residential development;
• reflect a long-term policy for promoting an orderly expansion of growth
and efficient use of land and public services; and
• are planned to be served by water and sewer systems.
Smart Growth legislation recognizes that there are times when the State will need
to fund projects that are outside PFAs. Provisions for these matters are determined
on a case-by-case basis.
Article 66B and Other State Laws
Section 10.01 of Article 66B of the Annotated Code of Maryland provides local
jurisdictions with the authority to enact innovative and flexible ordinances to
guide development. Examples include:
• mixed-use development
• cluster development
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• planned unit development
• floating and overlay zones
• incentive zoning
• alternative subdivision requirements that:
Ø meet minimum performance standards set by the local jurisdiction;
and
Ø reduce infrastructure costs.
The State grants local jurisdictions the power to implement the above planning
and zoning controls. All of these tools have the ability to regulate and limit big-
box development. Recently, language in Section 4.05 was amended to grant local
governments adaptive reuse power. This provision has the ability to both
encourage and regulate big-box development as a form of infill and
redevelopment, particularly in existing urban areas where a former land-use or
zone can be altered to a new use.
The State has also moved forward to enact legislation that provides for adequate
public facilities. In addition, the State has taken steps to improve inter-
jurisdictional coordination. Section 5-707(a)(1) of the Finance and Procurement
Article of the Annotated Code of Maryland provides that the Inter-jurisdictional
Coordination Subcommittee “shall promote planning and coordination and inter-
jurisdictional cooperation among all jurisdictions consistent with the State’s
economic growth, resource protection and planning policy.”
Section 5-707(a)(1) of the Finance and Procurement Article has the potential to
serve as a guide for the State to address many of the impacts caused by big-box
development and their trade areas.
15
In an Annual Report by the Inter-
jurisdictional Coordination Subcommittee, it noted that 64 percent of
municipalities surveyed engage in some form of inter-jurisdictional agreement
involving roads, sewer and water. This report also noted the deficiencies of
adequate public facilities ordinances (APFO) as it relates to inter-jurisdictional
coordination.
15
Developers of big-boxes often look for a trade area with a minimum population of 50,000. However, local
jurisdictions should establish criteria to evaluate retail trade areas in their respective communities.
60
Municipalities
Municipalities frequently mentioned lack of control over the phasing,
timing, siting and funding of public facilities or development outside their
jurisdiction. These facilities are controlled by another political body, but
affect the municipality either directly or indirectly (i.e., municipalities lack
control over their existing transportation level of service due to outside
development). This uncertainty can leave a town or developer unable to
undertake the needed infrastructure projects. Also, the scale, standards
and development types included in a county APFO do not necessarily
make sense for a municipality whose development capacity is limited to
infill and redevelopment.
Counties
Counties identified the lack of impact the APFO has on municipal
development, particularly systems (e.g., roads, schools) operated by a
county. Also, different standards and levels of analysis between a county
and a municipality were mentioned as problems affecting an APFO.
16
Since the impacts of big-box development also relate to many of the issues of an
APFO, local jurisdictions may be able to resolve some of these matters by requiring
developers to submit an impact assessment as part of the application process. The
affected jurisdiction should share that information, when necessary, with nearby
jurisdictions that may be affected in order to establish a joint effort to address
aspects of the proposed development.
While it is clear that language in Article 66B as well as Smart Growth legislation
may not necessarily be identical to the language in the policies and zoning
ordinances in both New Jersey and Vermont, as discussed in the previous section,
the underlying intent to provide for orderly development in Maryland is very
similar to the goals and visions of these states.
16
Inter-Jurisdictional Coordination Subcommittee, Annual Report 2000. Maryland, 2000.
61
Conversion of a former Hechinger store to a Super Fresh Grocery store. This adaptive
reuse project is adjacent to the Security Square Mall in Baltimore County, Maryland.
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Section 6:
Summary and Recommendations
This report covered a number of facets related to big-box retail development. The
first section provided background information concerning trends in big-box
development. The second section focused on historical and current retail trends
in Maryland. Data in this section shows Maryland had a larger number of general
merchandise stores in 1977 compared to 1997. Also, data shows retail sales in the
State, when adjusted for inflation, have experienced moments of decline over the
past decade. The third section noted findings from studies conducted on big-box
development, particularly Wal-Mart stores. This section indicated that there were a
number of environmental, social and economic impacts caused by big-box
development.
The fourth section focused on strategies to address the impacts of big-box
development in states such as New Jersey and Vermont. Strategies used in cities
such as Mequon, Wisconsin; Fort Collins, Colorado; Portland, Oregon; and
Gaithersburg, Maryland were also discussed. Examples of various regulatory
strategies and methods included the following: design review ordinances and
guidelines; the municipal comprehensive plan and local zoning ordinances;
impact assessments; inter-jurisdictional coordination and agreement; and
performance-based zoning. In addition, this section noted that jurisdictions must
take a proactive approach when dealing with big-box development, preferably
before a development or notice of a potential zoning change is advertised. Lastly,
market approaches were discussed. These methods provide small-scale retailers
with ways to compete more effectively with large-scale retailers.
The last section provided a brief overview of Smart Growth legislation. It also
discussed the limitations of Smart Growth with respect to regulating big-box
retail development. This section also noted that Article 66B of the Annotated
Code of Maryland provides local jurisdictions with the authority to enact
innovative and flexible ordinances to guide big-box development. The following
examples were noted: adaptive reuse strategies; incentive zoning; mixed-use
development techniques; and adequate public facilities ordinances.
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This report has provided a number of strategies that can be implemented by the
State as well as local jurisdictions. Additional recommendations are listed below.
Recommendations: State Government
• The State can amend Smart Growth legislation and language in Article
66B to provide for increased coordination of the review of plans,
ordinances, programs and projects that potentially have a “greater-than-
local” impact.
• The State can increase coordination between the Maryland Department
of Business and Economic Development and the Department of Housing
and Community Development regarding retail development. Technical
assistance can also be provided to assist small, locally-owned retailers.
• Incentives can be provided to local jurisdictions and landowners for
preserving large tracts of land undergoing review for a proposed big-box
development.
• The State’s Inter-Jurisdictional Coordination Subcommittee can be used
as a vehicle to assist local jurisdictions requesting assistance for project
evaluation or inter-jurisdictional agreement regarding big-box proposals.
• The State should continue to study the impacts of Internet-based
retailers.
Recommendations: Local Government
• Require big-box developers to submit an impact assessment (e.g., traffic,
noise, trade area size, water and sewer capacity) with a development
proposal.
• Allocate funds to perform independent market studies of proposed
large-scale retail development.
• Seek opportunities to initiate design competitions for adaptive reuse
projects with proposed retail development. Incentives can be linked to
projects approved for development.
• Increase coordination and review of local economic plans with
comprehensive plans.
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• Look for opportunities where big-box retailers may be able to provide
“off-site” improvements or support in the affected community.
Additional References
Barr, Rick, “What Happens to the Box When Big-Box Stores Fold.” Available
[Online]: <http://www.bizjournalsnals.com/seattle/stories/1997/05/focus5.html>
Bucks County Planning Commission, Performance Zoning. Bucks County,
Pennsylvania, October 1973.
Coyle, Denise, “Big-Box Retail Development: A Hot Topic in Somerset County.”
Available [Online]: <http://www.co.somerset.nj.us/_archive/big_box.html>
Delaware Department of Transportation, Access Management (Brochure).
Delaware.
Doucet, Michael and Ken Jones, The Impact of Big-Box Development on Toronto’s
Retail Structure. Centre For The Study of Commercial Activity, Ryerson
Polytechnic University, 1999.
Hanes, Stephanie, “New Issue in Mall Talks.” The Sun, Baltimore, Maryland, July
25, 2000.
Harrison, David, “Big-Box Retailers Rush for Owings Mills Site.” Available
[Online]:
<http://www.bizjournals.com/baltimore/stories/1998/06/22/story5.html>
Hoon, Philip, prepared for the Coalition for the Preservation of Chestertown,
Report on the Potential Effects of a Megastore in Kent County. Chestertown,
Maryland, February 1993.
International Council of Shopping Centers web-site.
Available [Online]:
<http://www.icsc.org/>
Johnston, Bryon, Jr., “Foster Proposes Limit to Size of Stores in Talbot.” Planning
Press Upper Eastern Shore, Maryland, February 2000.
Maryland Department of Planning, Data Services, Market Analysis for the Land
Area Along Route 213. Baltimore, Maryland, March 1996.
65
Maryland Department of Planning, Data Services, The Potential Impact of a
Proposed Wal-Mart on Retail Sales in Kent County, Maryland. Baltimore,
Maryland, June 2000.
Mitchell, Stacy, The Home Town Advantage. Institute for Local Self-Reliance,
2000.
Montealegre, Melissa, “Big-Box” Store Bill Upheld.” Available [Online]:
<http://www.capitalonline.com/cgi-bin/read/2000/06_18-06/TOP>
Overholser, Geneva, “Some Communities Revolt Against Big-Box Retail Stores.”
Available [Online]: <http://detnews.com/EDITPAGE/9911/02/2oped/2oped.html>
Pearson, Bill, Ways to Survive - and Thrive - in a Market of Big Retailers.
Available [Online]: <http://www.craftsreport.com/january96/bigretailers.html>
Robbins, Mike, “In the World of Discount Retailers, Costco’s King.” Available
[Online]:
<http://moneycentral.msn.com/articles/invest/sectors/5389.asp>
R.H. Johnson Company, Metropolitan Kansas City: Year 2000 Shopping
Center Report. Kansas City, Missouri, 2000.
Simonds, John O., Garden Cities 21: Creating Livable Communities. New
York: McGraw-Hill, Inc. 1994.
Stasiowski, Kent and Seth Riseman, “Superstores Head Downtown.” Urban
Land, December 1995.
Stone, Kenneth E., Competing with Discount Mass Merchandisers. Iowa State
University, 1995.
Stone, Kenneth E., Impact of the Wal-Mart Phenomenon on Rural Communities.
Iowa State University, 1997.
Target web-site. Available [Online]: <http://www.target.com/>
Toys “R” Us web-site. Available [Online]: <http://www.help.toysrus.com/
