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Whole Foods signed the lease back in 2012. One could argue that the demogrphics now are better than they were closer to the height of the recession. Four years later you finally have a College Park that is swarming with development projects and well on its way to its 2020 goal.
UTC Hyattsville finally got its Safeway and the redevelopment of Belcrest Plaza is entering its second phase. Arts District Hyattsville is continually becoming a hot zip for new families. I think Whole Foods knew what they were doing 4 years ago. By 2017, a large number of projects that are under construction will deliver.
Even Bozzuto is getting in the game with the south campus gateway with a "high-end" grocer.
Are all these developers drinking the koolaid or just placating "blacks." Are you suggesting that all this development is one huge social handout? "The poor blacks, let's give them something they can be proud of." I've never heard of any company locating somewhere just to make someone happy without there being some financial benefit.
Yes, the construction of this project is taking FOREVER. But who is driving the schedule? Cafritz, or Whole Foods?. I would suggest that construction is the reason. Whether it be permitting issues, or resources, financial or otherwise.
After it is said and done, Whole Foods will open, and there will be quality retail. Then what will you say? "oh, it won't last forever." Sounds like what people said about National Harbor.
1st highlight: I'm shocked I tell ya, shocked!
I said, that I had suggested it, I didn't say it was fact, but I do think its reasonable to say that lower income households, such as the majority in the surrounding Zips do more shopping at Walmart than Whole Foods. Would you disagree with that?
2nd highlight: Don't disagree, maybe I should!
3rd highlight: I'm not suggesting anything, I'm only speculating.
4th highlight: That's just speculation! This works both ways.
5th highlight: Stop trying to put words in my mouth. I've called you on this practice several times in the past. It's unworthy and disingenuous of you. You're well aware that I made a series of posts in "The First Whole Foods in PG" thread outlining my concerns about the financial viability of RPS, which you took issue with at the time. Now your trying to conflate me with the opinions of others on an entirely different matter. Maybe I should just repost all of those posts in this thread. What do you think?
Why in the world would Whole Foods be in the business of making black people feel better about themselves?
I never said that. Stop trying to put words in my mouth.
Here's a summation of various things I have said.
Many in PG, mostly blacks, whine about the lack of upscale retail and restaurants in the county. It's a valid complaint.
Whole Foods, the most upscale, and arguably the most coveted grocer in the DC region is in a uniquely vulnerable position to that charge. Unlike Giant, Safeway, and Shoppers who have both distribution warehouses and retail stores in the county, WF has distribution only, but no stores, leaving them open to charges of abuse or redlining, and as a result vulnerable to any attendant moral or political blackmailing. I've suggested/speculated that as a public company, opening the RPS store, which doesn't make a lot of financial sense to me, gets them off that hook. Call it insurance, or call it succumbing to political pressure. The other retailers being pursued for RPS are not in a similar position to WF, and can make their decision based on economics alone, and I believe that's why your seeing hesitancy on their part.
I never said that. Stop trying to put words in my mouth.
Here's a summation of various things I have said.
Many in PG, mostly blacks, whine about the lack of upscale retail and restaurants in the county. It's a valid complaint.
Whole Foods, the most upscale, and arguably the most coveted grocer in the DC region is in a uniquely vulnerable position to that charge. Unlike Giant, Safeway, and Shoppers who have both distribution warehouses and retail stores in the county, WF has distribution only, but no stores, leaving them open to charges of abuse or redlining, and as a result vulnerable to any attendant moral or political blackmailing. I've suggested/speculated that as a public company, opening the RPS store, which doesn't make a lot of financial sense to me, gets them off that hook. Call it insurance, or call it succumbing to political pressure. The other retailers being pursued for RPS are not in a similar position to WF, and can make their decision based on economics alone, and I believe that's why your seeing hesitancy on their part.
I didn't put words in your mouth. It's exactly what you said.
I didn't put words in your mouth. It's exactly what you said.
No it's not "exactly what I said."
If you believe the phrase I used, "keep the blacks off our back" which was a shorthand, for a larger concept, that I explained in the next post, equates to WF attempting to:
"make black people feel better about themselves",
then you have a very limited understanding of A: the human condition, and what makes people feel better about themselves, and B: the principles of modern upscale retailing.
If you believe that if, repeat if, WF succumbed to black moral/political pressure to locate a store in PG, would make black people feel better about themselves, then your opinion of the motivations driving black people are pretty low, and if accurate, portend poorly for the future of PG.
Residents of PG, black and white, can feel better about themselves, if they create an environment were WF chooses a PG location on the same economic merits that it would use anywhere. Anything else will draw comparisons with Jack Johnson era politics. It's unfortunate, but the hangover from the JJ era pay to play policies may continue to handicap PG to the point that it has to go the extra mile to demonstrate it's above reproach.
5th highlight: Stop trying to put words in my mouth. I've called you on this practice several times in the past. It's unworthy and disingenuous of you. You're well aware that I made a series of posts in "The First Whole Foods in PG" thread outlining my concerns about the financial viability of RPS, which you took issue with at the time. Now your trying to conflate me with the opinions of others on an entirely different matter. Maybe I should just repost all of those posts in this thread. What do you think?
The project hasn't even delivered. Yes, some of us are complaining about the strung out construction process, but neither you nor I have any information on why they chose to go at the pace they are going now. It is perfectly fine for you to speculate about financial viability. But it is also perfectly fine for me to offer a response...again.
There would not be over a billion+ invested in a market area if there were no financial viability. It just would not happen. RT. 1 would continue to look like Clinton, Suitland, and every other development desert in the county.
Again, either all these developers with all their market research and hundreds of millions of dollars on the line are somehow misinformed about the financial viability of the market area and are headed for bankruptcy, or they have caught onto something that you haven't yet embraced. All I'm saying is the money pouring into the area doesn't support your concern of financial viability. So what is Whole Foods is dragging their feet. There are other projects with just as much impact that will deliver in the same time frame. Even the owners of the mall at PG plaza are investing tens of millions into the mall and plan to bring in higher quality retailers. They see the future demographics of the area and aren't basing their numbers on 10 year old data. They are projecting. It is understandable to have concerns when ONE developer decides to invest, but when you have this high number of investment, there's got to be something that they see which gives them the warm and fuzzy of a ROI.
Look to the west. There were tons of previously financially nonviable neighborhoods that are now bustling with vibrancy. PG is not some foreign land where what is happening just 5 miles to the west is unattainable here. In fact, I would argue that PG has more potential than those DC neighborhoods and it just took a few developers to take the initiative. And now others are following suit.
The project hasn't even delivered. Yes, some of us are complaining about the strung out construction process, but neither you nor I have any information on why they chose to go at the pace they are going now. It is perfectly fine for you to speculate about financial viability. But it is also perfectly fine for me to offer a response...again.
There would not be over a billion+ invested in a market area if there were no financial viability. It just would not happen. RT. 1 would continue to look like Clinton, Suitland, and every other development desert in the county.
Again, either all these developers with all their market research and hundreds of millions of dollars on the line are somehow misinformed about the financial viability of the market area and are headed for bankruptcy, or they have caught onto something that you haven't yet embraced. All I'm saying is the money pouring into the area doesn't support your concern of financial viability. So what is Whole Foods is dragging their feet. There are other projects with just as much impact that will deliver in the same time frame. Even the owners of the mall at PG plaza are investing tens of millions into the mall and plan to bring in higher quality retailers. They see the future demographics of the area and aren't basing their numbers on 10 year old data. They are projecting. It is understandable to have concerns when ONE developer decides to invest, but when you have this high number of investment, there's got to be something that they see which gives them the warm and fuzzy of a ROI.
Look to the west. There were tons of previously financially nonviable neighborhoods that are now bustling with vibrancy. PG is not some foreign land where what is happening just 5 miles to the west is unattainable here. In fact, I would argue that PG has more potential than those DC neighborhoods and it just took a few developers to take the initiative. And now others are following suit.
I've made zero comment, positive or negative, on any of the other many developments. Each must and will succeed or fail on its merits. Referencing them is a non-sequitur.
The Louden County WF anchored development whose name currently escapes me, marketed by the same H&R, that begun a little before RPS, was 80% leased a year before it opened. i've wondered why H&R have had such opposite lack of success with RPS, and tried to figure it out by looking at it from the perspective of a small retailer considering leasing space, and you know my conclusions.
No-one on this thread, including you, has challenged the validity of my micro analysis. Instead, you alone have appealed to the macro picture, which I agree is not without merit, but so far has yielded few results for H&R, despite a big leg up from Annapolis, on the alcohol license issue.
I wish some business students from UMD would challenge my analysis.....hint, hint.
The example I used of a requirement for a $20 register ring every two minutes all day Fri, Sat, and Sun, in a dry cleaners is particularly interesting, because most dry cleaners are not open at all on Sunday, pushing the req, up to 720 $30. rings F&S combined, a very tall order.
Likewise, because restaurants rely heavily on alcohol sales for profit, many may consider six licensed restaurants out of a total of 15-16 in line retailers to be just too many. And that takes no account of any non licensed restaurants. If people don't go in to eat, they are even less likely to go in just to drink. That's why there are always fewer bar stools than table seats.
If there were more in line retailers to help draw traffic, like the other anchors and cinema in Laurel, then maybe......
I have no data, but I suspect this over population of licensed rests is also a problem in Laurel TC, even with the other anchors and cinema. Everyone has to eat, but no-one has to drink alcohol, and someone who eats at a non licensed burger joint, doesn't simply deprive the licensed rest of just food revenue. Had they gone to a licensed restaurant, they might have purchased a glass of wine at $5-$10 as opposed to $2 soda in the burger joint. That "lost" money would have helped the licensed restaurant meet it's higher rent and payroll. When I visit rests in LTC, I always look to see how many tables have alcohol, particularly wine, and with some exceptions, I'm usually not impressed.
For a variety of reasons I won't go into now, I'll be surprised if you see a liquor store in RPS.
in thinking about what I've just written, an additional problem to the demographic one I've focused on so far, is that the development may simply be poorly designed from a an inline retailers POV. That's a really hard problem to fix.
I've made zero comment, positive or negative, on any of the other many developments. Each must and will succeed or fail on its merits. Referencing them is a non-sequitur.
Not necessarily. If your argument is based on the financial viability of a project dependent upon the demographic of the surrounding market area, then any project in that area would be at risk of failure based on its own merits or otherwise. No one project is isolated from external market forces, one of which is the disposable income of the supporting market area that includes the low-income residences you referenced.
The market area of a Whole Foods includes more than just adjoining neighborhoods. Much like Wegmens, it is a destination retailer. While the catchment area is not as wide as a Wegmans or an Ikea, it is wider than your average grocer. Therefore, if the financial viability of that catchment area can't support the Whole Foods and the project it anchors, then other similar projects in that catchment area will have the same fate. This includes a luxury hotel, the planned up-scaling of retailers at the Mall at Prince George's, and luxury housing.
If people here are willing to drive to Whole Foods in Silver Spring (I'm one of them), then it is not illogical to expect more affluent customers to drive from Greenbelt, Laurel, Bladensburg, and parts of NE DC to the Riverdale Park Whole Foods. This type of draw can supplement the lost sales of local residences who would prefer Walmart.
Quote:
The Louden County WF anchored development whose name currently escapes me, marketed by the same H&R, that begun a little before RPS, was 80% leased a year before it opened. i've wondered why H&R have had such opposite lack of success with RPS, and tried to figure it out by looking at it from the perspective of a small retailer considering leasing space, and you know my conclusions.
You assume that it is a lack of success. My argument remains. Who is driving the construction schedule? Why would H&R rush to bring in retailers when the scheduled construction completion is pushed back 10 months? Is there a need then to sign leases that will sit for 2 years? The bigger question is why is construction taking so long? Permits? Strict runoff requirements from University Park that prolonged parts of the construction process? Are they timing the opening with the completion of the CSX bridge because they want less traffic at the main entrance?
None of these things concern the financial viability of the surrounding market area. Why would Whole Foods or any other retail open while 70% of construction is ongoing. The construction of the development in Loudon County was fully completed before Whole Foods opened. One strong possibility could be that Whole Foods is waiting on the residential portion of the project that would bring more casual shoppers that live within a 5 minute walk. Residential portions of projects are almost always completed before retail moves in simply because you have an immediate customer base within a block of your store. Perhaps this is what they are shooting for here. There is no residential portion at the Loudoun project. And while the residential portion of the Riverdale project is nowhere near being completed by next Spring, at least they will be delivered closer to Whole Foods opening instead of Whole Foods opening a year before any of the residential portions are completed. Perhaps the residential portion was written into the lease agreement?
Quote:
No-one on this thread, including you, has challenged the validity of my micro analysis. Instead, you alone have appealed to the macro picture, which I agree is not without merit, but so far has yielded few results for H&R, despite a big leg up from Annapolis, on the alcohol license issue.
I wish some business students from UMD would challenge my analysis.....hint, hint.
The example I used of a requirement for a $20 register ring every two minutes all day Fri, Sat, and Sun, in a dry cleaners is particularly interesting, because most dry cleaners are not open at all on Sunday, pushing the req, up to 720 $30. rings F&S combined, a very tall order.
Likewise, because restaurants rely heavily on alcohol sales for profit, many may consider six licensed restaurants out of a total of 15-16 in line retailers to be just too many. And that takes no account of any non licensed restaurants. If people don't go in to eat, they are even less likely to go in just to drink. That's why there are always fewer bar stools than table seats.
If there were more in line retailers to help draw traffic, like the other anchors and cinema in Laurel, then maybe......
I understand your analysis. But it is YOUR analysis. I would like to see your analysis compared to what all the major investors see. Because they see something in their analysis that tells them investment is worth whatever risk you see. What are they seeing that you aren't? Any business, before investing millions, would want to be as assured as you would be that a project is financially viable for them, not to just break even, but to actually make a profit. To see multiple investors march forward within the same demographic area is at odds with financial viability concerns.
Case in point:
Quote:
Transwestern's Mark Glagola (right) says he has done a statistical analysis comparing the office, retail and multifamily markets in Prince George's County with neighboring counties like Fairfax and Montgomery, and investors are always surprised to see them side by side. "Prince George's has almost identical statistical growth, per capita income, good housing opportunities," Mark, seated next to BECO Management's Levi Cohen, said. "When you pull back and say, 'Wow, I didn’t realize they were as strong,' when you look at it statistically, that’s really where the comparison is and people start to come."
...
"We're very strong believers in retail growth in Prince George's County," Terry (left) said. "Demand still far outpaces supply for retail sales."
I don't think we can look at this project in a micro context when the catchment area of the project is on a macro level. For example, it would be a mistake to look at Ikea or Wegmens at a micro level concerning the financial viability of the surrounding neighborhoods when they draw customers from 20+ miles away. Could Beltsville and College Park alone support Ikea? Of course not. But looking at it from a macro point-of-view, then the financially viability is not so tenuous.
Can Whole Foods and the Riverdale Park Station draw customers from 10 miles away? That remains to be seen and that is a marketing concern and not necessarily a financial viability concern. MGM National Harbor couldn't survive on Oxon Hill alone which is why their target market includes practically the entire Baltimore/Washington area.
Quote:
I have no data, but I suspect this over population of licensed rests is also a problem in Laurel TC, even with the other anchors and cinema. Everyone has to eat, but no-one has to drink alcohol, and someone who eats at a non licensed burger joint, doesn't simply deprive the licensed rest of just food revenue. Had they gone to a licensed restaurant, they might have purchased a glass of wine at $5-$10 as opposed to $2 soda in the burger joint. That "lost" money would have helped the licensed restaurant meet it's higher rent and payroll. When I visit rests in LTC, I always look to see how many tables have alcohol, particularly wine, and with some exceptions, I'm usually not impressed.
That is an interesting take on the subject. It is funny you mention LTC. My wife and I actually went to BurgerFi because we didn't have enough time to eat at the new Thai restaurant, which had a bar and people were seated at the bar drinking alcohol. But when we went to BurgerFi, my wife actually ordered a beer. I guess it depends on when you go to these places? It is hard to gauge alcohol consumption from personal observation. We always order sangria when we eat at Nando's Peri Peri. I used those two as examples where you wouldn't necessarily expect alcohol consumption.
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For a variety of reasons I won't go into now, I'll be surprised if you see a liquor store in RPS.
I think that people in the area are looking for a place to have a nice glass of wine and/or beer and it not be a college bar. Therefore there is some demand for a more upscale environment to drink alcohol. Where along the Rt. 1 corridor can you drink alcohol and have a white-tablecloth experience without college students? Franklins and Busboy's and Poets are all I can't think of, but BB&P is loud.
So far, I just see Burton's Grill as the only restaurants so far that would be worthy of an alcohol license. There are plans for a restaurant in the hotel that may serve alcohol. That's two so far. Which is not much. The luxury hotel in College Park will have two restaurants serving alcohol. But restaurants in hotels usually fare better than others.
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in thinking about what I've just written, an additional problem to the demographic one I've focused on so far, is that the development may simply be poorly designed from a an inline retailers POV. That's a really hard problem to fix.
Maybe so, but they had nearly 8 years to hash out all of those design issues. If there is a problem with design, then that is completely the fault of the developer.
Last edited by adelphi_sky; 07-25-2016 at 11:22 AM..
This makes sense as College Park is aiming to retain more of its college graduates. Connection?
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According to Urbanful, Whole Foods prioritizes education levels over income levels when it scouts for new locations. In other words, what a neighborhood will become rather than what it already is. Whole Foods looks for a baseline population of 200,000 college-educated people, but once it moves in, others more to follow.
There is little question that Whole Foods has consistently has been able to identify neighborhoods undergoing rapid upswings — Logan Circle, Washington DC, Harlem, New York, Jamaica Plains, Boston, South Hills, Pittsburgh, Central West End, St. Louis, and soon Midtown, Detroit.
...
Having personally negotiated with Whole Foods on development projects, I can tell you first hand that they take an unusual approach when evaluating a market. Unlike the typical retailer, and contrary to what you might expect, Whole Foods does not focus on household income but rather on education levels in a potential trade area. They usually require a minimum population of 200,000 with college educations. One of their brokers once told me, “Look, I don’t care what the incomes are; show me there are enough people there with degrees.” If you work at a nonprofit, a yoga studio, or in government, but still shop at Whole Foods, then you know that the Whole Foods customer is not defined by his or her salary.
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