Panel Addresses Smart Growth

LAS VEGAS-”Smart growth isn’t easy to define. People are using it to encompass a myriad of issues, and there are a lot of different definitions. The definition, in its most simplistic form, is the efficient use of infrastructure.”

The speaker was Sue Murphy, president of P&M Consulting Group of Tampa, and she was setting the table for what was to be a lively discussion on the topic of “smart growth” as it applies to retail development Tuesday at the ICSC convention here. She noted, as well, that smart growth has steadily moved beyond concept to a regulatory matter.

“We like sprawl,” admitted Thomas J. Connolly, divisional vice president of Walgreen’s, Deerfield, IL. “This is an opportunity for us to address ‘smart growth’ – a lot of things are imposed on us.” He admitted, as well, that the retail business has to change and that ultimately, suburban, urban or whatever, “the demographics don’t change.”

The panel addressed the topic more on a micro level rather than a macro, strategic planning level. As far as retail design, Murphy asked the panel about cost factors. “Projects cost more in smart growth situations,” she pointed out.

“It’s a big issue with the drugstores and supermarkets, because our margins are so low,” Connolly said. “So we’re very conscious of costs and we have to be careful what we agree to.”

“The developer is in the middle,” said Lawrence Kilduff, president of the Kilduff Co., a Mequon, WI-based development firm. “We’re trying to get a deal done, and we have to balance what the community says and what the retailer can pay. It’s a challenge.”

“Retailers haven’t embraced smart growth the way communities and developers have,” added Howard Gerelick, vice president of Safeway Stores, Englewood, CO. “That’s where the conflicts arise.”

“In some cases, mixed-use might be the answer for a project to be feasible,” said Lee S. Sobel, real estate analyst for the US EPA in Washington, DC. “Smart growth isn’t ‘one size fits all,’–you have to work for a solution.” But Kilduff countered that “mixed-use is very difficult to finance–residential and retail are underwritten differently.”

In terms of design issues, “a lot of communities are over-coding smart growth,” Murphy said, recommending that they “become more flexible. And in a larger sense, referring to the idea that smart growth has been called a movement, “it should be a movement of the people and what they want rather than a movement of people with college degrees in planning,” Kilduff said. It’s a challenge.”

What do local elected officials and planners need to know and do? “The problem starts with the fact that developers approach it as an economic exercise,” Kilduff continued. “We’re not in the non-profit business. The people on the permitting side should know that.”

Harvey Gutman, a retail real estate consultant who until recently was SVP of retail development for Pathmark Stores in Carteret, NJ, echoed Murphy’s call for more flexibility on the part of communities. “There is more than one way to reach our various goals,” he said, citing two recently opened Pathmark stores that opened in New York City’s Harlem, where “the cooperation was terrific.”

Gerelick, meanwhile, asserted that “there are too many hands in it, and no one knows who’s in control. The planners have to stand up to the community and elected officials” where a project makes sense. And in conclusion, Connolly called for “reasonableness and consistency” from communities.