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Published: Jan 31, 2008 12:30 AM
Modified: Jan 31, 2008 06:18 AM

Stores get taller as land costs rise

Developers see more interest in two-story designs as area fills up

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WHY BUILD UP?

Pros

* You'll need less land, which is becoming more expensive.

* Your store can fit into a more compact space.

* You can build in areas that normally are off limits, such as downtowns and busy city corners.

Cons

* A higher building requires more material, and prices of concrete and steel are on the rise.

* Installing elevators and escalators can be pricey.

* With more floor area, you need more staff.

* You'll need a different store design for a two-story building.

STAFF RESEARCH

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"When you're doing something that's this much of a departure from what you've been doing, there's a certain amount of risk," said John Featherston, senior director of real estate.

Though Featherston said Chick-fil-A was not using the Raleigh location as a prototype for two-story development, he said he sees it as good preparation for the future .

"We've got to be able to execute this well," he said. "We've got to figure out how to do this, or we're going to miss being part of [people's] lives."

One-story still popular

Of course, there's a reason most retailers have stuck with a one-floor model for so long.

Two-floor stores are more expensive to build because of the extra materials and additional infrastructure, such as putting in elevators and escalators.

Then there are other issues a two-story building can cause.

"We have to have more staff," said Bethany Nielson, spokeswoman for REI. The outdoors retailer has 96 stores, about half of which have two floors.

"We have to make sure that there are enough employees to cover the whole floor. In a one-story store, it's easier to see different areas."

And making the move to two-story development requires some investment of time and money to redesign the store's layout.

Chick-fil-A's planned Cameron Village store required a new design as well as logistics, such as figuring out how to get customers and their food safely from the counter on the first floor to the dining area on the second.

"We have spent significantly more than any other project," Featherston said. "It's not like we can pull off-the-shelf drawings of anything else."

Still, the move is becoming increasingly necessary, Raleigh developer John Kane said.

Kane's North Hills project contains a two-story REI store, and his new North Hills East development will feature the area's first two-story Harris Teeter.

"You wouldn't have seen much of that 10 years ago," he said. "It's just more vertical in nature. Everything we're doing on the east side of Six Forks [Road] is more vertical. ... Land has gotten very expensive, and when you have to pay more for the land, you have to put more density on it."

Experts approve

For their part, city planners and developers like the new look.

"We'd welcome two-story retail really anywhere retail is allowed," said Khin, the Apex planning director.

"I think it's something that's different, and I think it would be good to see."

Still, Mitchell Silver, Raleigh planning director, said he doesn't see it as an overwhelming trend.

"It only works if it's a single use, like a Barnes & Noble, where it's one user on two floors," Silver said. "I think we'll see it in limited places. ... But it's not a bad thing."


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