Revitalizing communities remains a priority in areas affected by the COVID-19 shutdowns.
By Crystal Simmons
Shopping is more convenient than ever. With the click of a button, customers can order food, groceries, clothing, specialty items, and furniture from their phone or computer.
But that convenience comes at a price. As the need for traditional brick-and-mortar shops declines, retail centers, restaurants, and malls continue to close, even as the COVID pandemic subsides and consumer spending reaches pre-pandemic levels.
When these buildings remain vacant, communities can suffer.
Bobby Lieb, the president of the Houston Northwest Chamber of Commerce, says the closures have left many wondering what’s next for retail hotspots like the Cypress Creek community.
“People who live around here, who remember the good old days, intuitively want it to go back to that,” says Lieb. “It’s never going to go back to the way it was. What we’re looking for is an economically viable area. It could become something completely different. And what that something is remains to be seen.”
Lieb says the area’s high visibility along the heavily trafficked FM 1960 corridor traditionally attracted retailers, making it a top retail destination in the 1970s and 1980s. But blight, vacant buildings, competition from surrounding communities, aging infrastructure, and online shopping have driven customers away since its heyday.
“We have 60,000-70,000 cars up and down this corridor every day,” he says. “That’s a good number if you’re in the retail business.”
But those vehicles are now passing boarded up buildings, graffiti, and empty parking lots.
To attract businesses to the area, Lieb wants to create a management district directed by a board of directors, which would have the power to regulate commercial properties and apartments along the corridor, eliminate nuisance buildings, clean up litter, pay for public art, and add security. His goal is to encourage business along the corridor, not shape it.
The process would require Lieb to receive permission from enough property owners along the corridor to equal at least 51% of the assessed property value and then apply to the state. If approved, the management district could fund improvements through assessments on its properties.
“They’re like a MUD (municipal utility district), but instead of streets, water, and sewer, it’s economic development,” he says. “They do things like nuisance abatement, litter removal, safety, and security. It’s essentially cleaning up the area.”
Lieb says the process could take years because many property owners aren’t local.
“I can’t walk into Starbucks at Champions and FM 1960 and say, ‘Hey, do you guys support a management district?’ because they’ll just say, ‘I don’t know, you’re going to have to ask my landlord,’” he says. “It’s the property owners directly who have to sign on to it.”
In the meantime, Lieb says the chamber works closely with law enforcement, the Harris County Fire Marshal’s Office, Harris County Public Health, Harris County Precinct 4, and the Harris County Attorney’s Office to address vacant buildings that have fallen into disrepair or attract criminal activity. In most cases, Lieb says, the owner will clean and secure the property. But in others, the building may need to be demolished.
The chamber and many concerned residents spent years appealing to InvestCorp Partners, the owners of the Mill Creek office building at 4702 FM 1960 West, to clean up the old office building. But it sat vacant for at least a decade before the Harris County Attorney’s Office ordered its demolition. By that time, the building had become a homeless encampment littered with trash and debris, with broken windows and graffiti-covered walls. Break-ins were common, and pieces of the facility had been removed and used for kindling.
The Trouble with Big Box Stores
Peter Merwin, the principal design director at Gensler and subject-matter expert on retail-centric, mixed-use environments, and walkable urbanism, explains why landlords sometimes let buildings sit empty.
“When big-boxes go dark, they are loath to sell to businesses that would cannibalize their share,” he says. “Often, these big-box stores will just board up, and nothing happens. It’s basically an insurance policy to keep others from cannibalizing their business.”
Adam McAlpine, a commercial broker and owner of the real estate company McAlpine Interests, which has a property management division, says it’s common for developers and landlords to restrict certain businesses from operating on their property.
“A lot of these landlords don’t want to cannibalize their own tenants,” says McAlpine. “It does no one any good if you’re putting your own tenants out of business. If you have a doughnut shop or nail salon in the center, more than likely a landlord is not going to put another one in there.”
Savvy tenants will put restrictions on their lease as well, preventing landlords from leasing to competing businesses, he explains. Most large grocery stores won’t share a building with a church or a school because of parking issues and will limit the number of restaurants that can operate on a property.
“Restaurants take up more parking,” says McAlpine. “So a grocery store may say you can only have four restaurants or six. Whatever it may be, they want to make sure there’s enough parking.”
With retail opportunities drying up, many industry experts are predicting what’s next.
“Medical, mental health, distribution companies have done well, and there is high demand for these uses,” says McAlpine. “There has been a big boost in delivery services, cleaning services, grocery stores, fitness equipment companies, gardening suppliers, home improvement, furniture stores, just to name a few.”
However, businesses like movie theaters, restaurants, gyms, hotels, airlines, bars, and event venues failed in large numbers last year during the worst of the pandemic. Retail was hit particularly hard, with more than a dozen big-box stores like Lane Bryant, Pier 1, and J.C. Penney filing for bankruptcy in 2020.
Although plenty of economic winners and losers emerged last year, it’s tough to tell if those trends will continue. Looking at long-term trends may be a better indicator of growth. Over the years, Humble and the master-planned Kingwood community have experienced a slew of redevelopment. McAlpine says a former Kelsey Seybold clinic became a Stacey’s Dance Studio, a library became a community center, and a large furniture store was converted into a medical facility.
“People are taking buildings used for a market that isn’t as hot right now and using them for something that is,” says McAlpine.
He believes the trend will continue, with old buildings and malls becoming distribution centers, medical complexes, community colleges, or something in the service industry.
“For a lot of these big-box stores, specifically malls, there’s been a lot of discussion about converting them into distribution centers for some of the larger online stores,” says McAlpine.
He says most malls sit near highways and major roads perfectly positioned for shipping and receiving goods quickly.
“One of the trends for a while was turning old grocery stores into trampoline parks,” he says. “There’s a ton of medical groups whose buildings have been converted into gymnasiums or dance studios. That’s been happening since (Hurricane) Harvey.”
Even before the pandemic-induced shutdowns, McAlpine says Hurricane Harvey reshaped the commercial landscape in Kingwood and Humble.
“You had these businesses and developments that were struggling, and Harvey ultimately put a number of them out of business,” he says. “A lot of money has been put into updating these old buildings, which has revitalized these communities.”
Whatever the future brings, McAlpine says, there’s always going to be innovative landlords and developers looking ahead.
“There’s been talk of converting office buildings and skyscrapers into condos or multifamily housing,” he says. “You are starting to see people think outside the box.”