Independent booksellers in Austin and Chicago are protesting the fact that developers could receive multi-million dollar incentives from their respective cities to facilitate retail developments that have signed tenant agreements with national chain Borders Books & Music. The booksellers contend that using financial incentives for developments that solicit national chains is unfair to local retailers. Meanwhile, representatives for Austins and Chicagos city councils argued that the new development plans will spur business and help local merchants by driving business to their respective areas.
In Chicago, nine independent bookstores are protesting a proposed development by Freed Development Corporation of retail space and housing on Lawrence Avenue and Broadway. The project, slated to begin in September, involves renovating two abandoned buildings on the site, and the demolition and then rebuilding of a third abandoned building, according to City Council Member Alderman Mary Ann Smith. The booksellers are unhappy because the developer will receive from the city approximately $5.5 million under its Tax Increment Financing [TIFs] (which funds the improvement of vacant or underused lands) and has signed on Borders Books & Music as a tenant in the new development.
In a letter sent to Alicia Mazur Berg, the commissioner of the department of planning and development for the city of Chicago, the booksellers wrote, "City funding, in the form of TIFs, should not be used for developments that include national chain bookstores. In the Chicago area, there are already nearly forty national chain stores. One of these chains (and only one) is planning five new stores in the near future, several of them involving TIF funding. It is questionable whether the city can even trust it will see a return on this investment given the precarious economics of over-development in retail bookselling."
According to Ann Christophersen, co-owner of independent bookstore Women & Children First, ABA president, and one of the letters signatories, its not only booksellers protesting the plan -- a number of different factions are objecting to the proposed development. One coalition is against the demolition of one of the buildings because of its historic value, she told BTW, while another contends that the project should include plans for more affordable housing.
However you slice it, Christophersen said, the city government "should support existing businesses and create a climate where new entrepreneurs are encouraged
. Not use public money to help finance a superstore."
Alderman Smith, who oversees Ward 48 where the development is planned, told BTW that Freed Development Corporation is saving the two buildings it can, but that the third could not be salvaged and that is why it is being torn down. However, the new building would be respectful to the "previous aesthetics" of the demolished building, she said. As for bringing in local businesses as opposed to national chains, she explained, "We reached out to existing [Chicago-based independent] bookstores and asked if they would like to open a second site [in the proposed development], and no one was interested."
Linda Bubon, co-owner of Women & Children First, told BTW that this wasnt the case. "The conversation we had with her was long before the Freed project came about," she explained. "She asked us to open a [second] site in the Bryn Mawr Development, and we had a serious 45-minute conversation with [Alderman Smith] on the economics of the book business, how the market is over-saturated, and it would be economic suicide to open a second store. Youd split your customer base, also. It didnt have to do with the Freed Development at all."
Still, Smith believes theres enough business to go around. "Theres 90,000 people within walking distance," she said. "People like to support independent booksellers, but a lot have been supporting chains outside the city." The new development will keep people in the area and that will be good for local businesses, she argued.
Greg Harris, chief of staff for the Chicago City Council, stressed that the development is what the local community has long sought. "The buildings there were abandoned and vacant for more than a decade," he explained. He added that the "bookstore piece is but one component of the development," and he believes that "the financial viability [of the development] is enhanced by [Borders], but not contingent upon it. Weve heard that there are two bookstores in opposition to the development." As for whether he thought a Borders would hurt existing Chicago independent bookstores he noted, "Im not in the book business."
Christophersen told BTW that community groups opposed to the current project have created an ad hoc group that is working with another developer on an alternate plan based on coalition concerns -- a plan that could enhance the position of local businesses. She said this developer is "more creative" and "is not as formulaic."
However, Alderman Smith said Borders participation "is a done deal," and Harris said the developer would be closing on the buildings in September. Construction will begin immediately after, he noted.
"[Smith]s been using these words from the beginning and spreading this information [that its a done deal], and it only went to vote yesterday [Tuesday, July 23]!" Bubon said. "The people for the development are very vocal; the people against it are very vocal. You cannot proceed when the community is so divided."
In addition to Christophersen and Bubon of Women & Children First, other signatories on the letter to Commissioner Berg were: Howard and Gayle Mandel of Transitions Bookplace; Ed Devereux of Unabridged Bookstore; Adam Brent of Brent Books; Desiree Sanders of Afrocentric Bookstore; Bob Bryant, general manager, and Debbie Morse, head buyer of Barbaras Bookstores; Sandye Wexler and Iris Sachs of The Savvy Traveller; Jack Cella, general manager of 57th Street Books, Newbery Library Bookstore, and Seminary Co-op; and Tomas Bissonnette of Spanish-Speaking Bookstore.
In Austin, Schlosser Development Corporation has been planning to develop the area between Sixth Street and Lamar in downtown Austin for almost a decade. First, the plan was to create a 450,000-square-foot pedestrian plaza, with a movie theater and locally owned businesses, according to Steve Bercu, owner of BookPeople, a 32-year-old bookstore located across the street from Sixth and Lamar. However, when the movie theater backed out, so did all the other businesses. Now, Schlosser is planning something else: an office and shopping center, and Borders Books & Music will be one of the tenants.
Currently, both Bercu and his neighbor across the street, the 20-year-old Waterloo Records, are concerned that Schlosser Development will receive public funding from the city for a retail center that will be anchored by national chains. For the pedestrian plaza project, Schlosser Development was allocated $2.1 million in incentives, of which approximately $700,000 was used, he explained. The area between Sixth and Lamar, he added, "never changed from an empty lot."
Presently, BookPeople occupies a portion of the Whole Foods Market building. Under the new plan, Whole Foods will move to a larger space at Sixth and Lamar, and Schlosser will buy the old Whole Foods building (BookPeoples lease runs for another 13 years). Borders has signed an agreement to open a store in the new shopping area, about "300 feet away from us -- due south," said Bercu. "The current development plan is the duplication of a shopping area in north Austin, a gigantic strip center with loads of chains, like Best Buy and Old Navy. But there, at least they have a parking lot."
The question now, said Bercu, is whether or not the new plan will receive subsidies from the local government. According to Stephanie Beckett, the constituency liaison for Austins City Council, the $2.1 million in incentives that was allocated to Schlosser for the pedestrian plaza does not transfer to the new plan. Schlosser Development Corporation must submit their new proposal by August 1, she said, at which point, the City Council will decide on whether or not the plan will receive subsidies from the local government.
"They have to apply again," Beckett told BTW. "But any public money [given to subsidize a project] is meant for infrastructure, community sidewalks, and community development." She said that choice of tenant is up to Schlosser Development.
David Vitanza of Schlosser Development Corporation confirmed that the company would be submitting the new plan to the city council. However, Vitanza stressed that Whole Foods is the focal point of the project (not Borders). As an independent Austin business, he added, Schlosser Development Corporation considers itself very supportive of local retailers. "Were very proud of our ability to bring in national anchors and to fill around them with local independent stores," he said.
Nonetheless, Bercu adamantly argued that Schlosser should not receive public funds if the company is bringing in national chains and not supporting local businesses. "You have to look at the reasons why you give incentives," he said. "The financial reality is that Waterloo Records and my store pay millions of dollars in taxes, wages, and payments to the city. Were known factors. Is Borders going to pay that? We dont know
. Competition is fine, but at least keep it on an even playing field. No one gave us subsidies when we moved here."