Shopping next on agenda

Raleigh leaders focus on luring more stores as downtown adds homes, offices

RALEIGH -- Downtown's theme is shifting from revival to survival: Now that municipal projects aimed at rousing a once-yawning center city are taking root, city leaders are focused on ways to keep the heart pumping for years to come.

Climbing on the agenda: shopping. Economic developers are canvassing planners, developers, lenders and business owners to identify strategies to guide retail growth as a slew of homes and offices prepare to open.

"The long-term viability of the downtown is at stake if we don't get this right," said David A. Diaz, chief executive of nonprofit booster group Downtown Raleigh Alliance.

Dozens of cafes, restaurants and bars have popped up in recent years. And more are coming as the city and developers have embarked on at least $2.5 billion in projects, including a new convention center, the reversion of Fayetteville Street from a pedestrian mall to a drivable strip and hundreds of new homes.

But planners think more could be done to shake the perception that downtown retail is a risky proposition after decades of suburban flight caused lethargy.

The city estimates that downtown retailers should bring in $224 million in sales this year, but the total will probably be closer to $192 million, in part because of insufficient marketing and merchandising.

"People stop me on the street -- visitors -- saying, 'Where do I shop?' " Raleigh Planning Director Mitchell J. Silver said. "It's embarrassing. My biggest concern is that when the convention center opens, we have to tell them to get in a car."

In the past three years, at least 83 street-level businesses have opened downtown, up 17 percent from the previous three years, according to a count by the Downtown Alliance. The number of street-level business closures declined 10 percent during the same period.

Consumer demand is expected to swell to $367 million in 2010, based on a city report that examined potential spending by workers and residents after the convention center and several other projects are completed.

Planners want to make sure the city capitalizes on that demand.

The city relaxed rules that once required many downtown businesses to provide parking to receive operating permits. Planners also could endorse wider sidewalks to encourage outdoor dining and merchandising.

And they're ruminating over requiring -- not just encouraging -- street-level retail in new buildings in certain downtown areas, Silver said. The city is identifying streets that would be best suited for such window-shopping policies.

Those efforts will tie in with a study planned by the Downtown Raleigh Alliance, which some in the city hope will make the case that downtown retail is a safe bet.

The study, to be conducted by outside consultants, will help the city identify what kinds of retailers would complement the current mix and how best to recruit them, Diaz said. It may look at how other cities have succeeded, and encourage discussion of public recruiting incentives, private financing initiatives and branding strategies. It also could explore juggling long-term hopes of the city, short-term demands of investors (return on investment) and residents' desires (more grocery, apparel and bookstores).

"The biggest challenge we have is the perception that retail can't work in downtown," Diaz said.

The perception was born in the suburbs, which sucked residents and shoppers out of downtowns starting in the 1950s.

Subsequent efforts to revive downtown Raleigh, including the conversion of Fayetteville Street to a pedestrian mall and City Market to a multitenant retail center, failed to spark a widespread revival. Residents, a key driver for retailers, didn't flow back to the city center.

That's changing. The number of downtown homes is expected to grow 70 percent by 2010. And almost 200,000 square feet of shops are planned or being built.

Still, many developers -- even some who are building those shops -- think that established suburban shopping areas may be too strong a magnet for retailers in the near future.

Those centers have the advantages of ample parking and a single landlord who can easily build a tenant roster to include something for everybody.

Tailoring a tenant roster in a downtown, where parking is more challenging and buildings are owned by various landlords, can be more of a challenge.

"We're not going to wave a magic wand and have an instant retail district," said Jack Dunn, president of Craig Davis Properties, which is partnering to build 50,000 square feet of shops, services and restaurants near the convention center. "We've made a lot of headway. But the real measure is: Do we continue to make progress?"