This was such a great comment I could not let it sit unnoticed. It has been promoted to being it’s own post. I think Stephen encapsulates many of my own feelings about Springfield and Downtown Jacksonville. He does this all without using a word I have to look up in the dictionary. I think this comment is very relevant in light of the discussion regarding downtown revitalization on Folio Weekly’s blog, Flog.

Stephen says:

Moon Colony Razorblade would have done fine but for two factors.

One is that the shop was located in the Toxic Bubble–that area of downtown where the enforcement of parking fines combines with the vagrant panhandlers and the buildings kept dark and broken by city owned but not maintained structures to make the most forbidding retail environment in the city.

Two is the non reality based commercial leasing agents.

Commercial property for retail is based on two things: Size and Traffic.

People mistake ‘location’ with ‘traffic’. When you hear the phrase ‘location! location! location!” what it refers to is actually ‘location in relationship to passersby’.

Simply being in proximity to expensively built structures does NOT increase the value of the space to a retail customer unless there is accompanying foot traffic.

Retail (meaning stores, shops, services, restaurants or any other business that is open to the public with direct sales rather than wholesale) pays for the value of potential customers.

In both Springfield and Downtown the same set of characters is overpricing on speculation rather than reality. Which is fine for real estate purchase to own or invest but has NOTHING TO DO with retail leasing realities.

If there is no street traffic by a given location, then the space is worthless to retail and will remain unrented.

You can have the largest showroom in florida next to the most glamorous convention center in the south, but if there is no street traffic, even the best constituted business will fail in that location: Even if the space is free.

Hionides, Van Horn, and a number of other ‘investors’ simply don’t understand this dynamic. Which is why they keep sabotaging their own developments with businesses that don’t last a year.

Understanding that dynamic, and learning that one of the primary investments that a real estate developer who expects to trade in retail spaces must make is CREATING STREET TRAFFIC is why the Shultz brothers succeeded in Five Points.

STREET TRAFFIC is the only value to a potential merchant, and lease prices for shops are either based on street traffic or they are doomed to fail.

The space which Moon Colony Razorblade leased from Chris Hionides (or more accurately, Mary Farwell) was only worth 300 to 500 dollars per month TOPS because of the amount of existing traffic which the building could offer to the tenant. That they were paying 2000 dollars per month is totally based on fantasy, and typical of the reason why speculators like Mary Farwell are sheer poison to developing neighborhoods.

Craig Van Horne has tried the same approach to all 900 incarnations of 9th and Main, forcing the tenants to pay rent based on his percieved value of the building. Each of them were doomed to failure and bad feelings because the property simply does not have the street traffic to justify 6 thousand dollar a month rent.

The only successful strategy for retail development in ‘emerging’ areas is taking the long view and ‘cycling the tank’. i.e. judicious leasing to shops or shop mixes guaranteed to create street traffic or synergy which insures the success of the businesses who lease at that building.

Street traffic and businesses making mad profits off of the existing location is the only thing which justifies a raise in the lease prices. Pretty soon, the ‘location’ has value all on its own simply because of its position in a high street traffic area.

So Moon Colony Razorblade had two strikes against it succeeding: The same two strikes associated with a whole bunch of people in downtown. Inside the Toxic Bubble, and Non Reality Based lease agreements.

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This entry was posted on Wednesday, November 22nd, 2006 at 2:15 pm and is filed under Downtown Jacksonville, Retail, Springfield. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.