Report: Dont let anchors get away
Retail strategy for downtown stresses bolstering Meier & Frank, other stores
The antidote for halting the drift that the Portland Development Commission's executive director, Don Mazziotti, says has put the downtown retail core on the precipice of a 'tipping point' comes down to this:
Do what's necessary to keep Meier & Frank downtown.
That was the message in a city-sponsored retail strategy report, which stresses the importance of the Meier & Frank's Portland flagship store near Pioneer Courthouse Square, along with expansion of the downtown Nordstrom, in maintaining a healthy retail core.
The report 'strongly recommends' that the city form a partnership with the retailer 'to completely modernize' the downtown store.
'Some participation by the city of Portland through the Portland Development Commission will be necessary for Meier & Frank to undertake this major renovation project,' the report concludes.
Retaining and strengthening anchor retail uses was 'far and away the most important' of the 12 recommendations in the just-finished Downtown Portland Retail Strategy sponsored by the commission and the Association for Portland Progress, said Franklin 'Kim' Kimbrough, association president, in a joint appearance last week before the Portland City Club.
Although Mazziotti said the downtown core is at a critical turning point, the consultants who wrote the report were impressed that the downtown has such a healthy combination of anchor tenants, national chains and independent retailers, said Lew Bowers, a PDC senior development manager.
The focus is on Meier & Frank, he said, because measured against other downtown anchors Ñ Saks Fifth Avenue, Nordstrom and even Pioneer Place mall Ñ 'Meier & Frank may be the one at risk because of a functionally obsolete facility.'
Meier & Frank executives have expressed a strong interest in remaining downtown, according to Economics Research Associates of San Francisco, the consultants who wrote the report.
The downtown store has grown increasingly shabby. Meier & Frank has closed off several retail floors and now devotes only 230,000 square feet to selling space in the 665,000-square-foot building.
Refurbishing the building, part of which dates to 1908, would have to include a seismic upgrade.
Bowers said the commission, the Association for Portland Progress and the city are waiting to see an architect's analysis commissioned by The May Department Stores Co., Meier & Frank's owner. The analysis details the options available for the block-square building, bounded by Southwest Fifth and Sixth avenues and Morrison and Alder streets.
'I think everyone's opinion, Ñ including, I think, Meier & Frank Ñ is that it is the best retailing site for them if they are able to renovate that building in a cost-effective fashion,' Bowers said. 'The climate appears better for a decision now than people seem to have seen in the last couple of years.'
'Most cities in America would salivate over the thought of having a prominent May Co. unit operating in the heart of their downtown,' said Stan Eichelbaum of Marketing Development Inc. in Cincinnati, one of the consultants who contributed to the Portland strategy.
It would be worthwhile to contribute to keeping the store here, he said, 'within sensible parameters.'
Bowers wasn't speculating about how much PDC or others might contribute.
'The question is going to be, obviously, how much money is needed,' he said. 'Frankly, it's probably going to be relatively expensive.'
The incentives suggested in the strategy include direct financial subsidy, reduced-interest loans and zoning flexibility that would allow mixed uses within larger buildings.
'It's easier to work to maintain existing anchors than it is to try to attract a new one,' Bowers said.
One way to help pay for the renovation, the strategy report says, would involve selling excess space on the store's upper floors for conversion into office space or other uses.
May, which bought Meier & Frank in 1966, isn't talking about its plans.
After decades of acquisitions, May owns a number of flagship stores. At least two now incorporate both retail and office use.
The former Wanamaker store building in Philadelphia, now a Lord & Taylor (another May-owned retail chain), has offices on its upper floors, and the former Crystal Tea Room on the top floor is a popular meeting and event space.
Nearby, in downtown Philadelphia, the May-owned Strawbridge's flagship store is undergoing a mixed-use conversion, with its seventh through 13th floors being converted to office space.
In a report filed earlier this month with the Securities and Exchange Commission, May said it plans to remodel 31 department stores this year, totaling 2.7 million square feet of retail space. It did not specify whether Portland is one of them.
Contact Jeanie Senior at