Small Towns, Big Ideas

Sustainability and community planning aren’t just for big cities. Learn how commercial real estate development in smaller towns and rural areas can benefit from foresight.

April 24, 2013

The American Planning Association wants you to know that the word “development” isn’t always preceded by the word “urban.” Rural areas and small towns were a focus for many of the sessions at the APA’s annual conference, held April 13-18 in Chicago.

Here are some tips from these sessions for commercial real estate practitioners working to revitalize the commercial corridors in smaller or more rural communities.

Go With What You Know

One of the first steps in creating a redevelopment plan for any community is defining the character of a place, in order to build on what makes an area special. Andrew Dane, senior community development and sustainability specialist at Short Elliott Hendrickson Inc., says that when he was working to help boost the flagging downtown of Sherwood, Wis., he recommended the town capitalize on its existing assets, including two golf courses, a major highway, and a nearby state park.

“We recommended putting up a farm stand building [in order to] take advantage of some of the high traffic volumes that go through the downtown,” Dane says.

Assets as Growth Deterrents

While planners often suggest building revitalization around a community’s assets, sometimes the very elements that make a place attractive can be a barrier to development. David Milder — president and founder of commercial consulting firm DANTH Inc. as well as Dane’s partner in the effort to revitalize Sherwood — noted that the town’s traffic was both a boon and also a factor contributing to the decline of the downtown area.

“It was one of the most unfriendly [towns] — pedestrianwise — that we’ve visited,” Milder says. “People are not going to find it comfortable to be in the area … and part of the attraction of small towns is comfort.”

Even recreational facilities can hinder sustainable, long-term development. Joyce Allgaier is the planning manager for Ketchum, a small resort community in Idaho’s Sun Valley area. While they have a healthy crop of second-home buyers thanks to the beautiful landscape and abundance of recreational opportunities, they’re trying to bring in a more permanent group of young professionals by recruiting companies in the “rec tech” sector, such as skiing outfitters and bike shops.

“We want a year-round, sustaining population,”Allgaier says. “We want them to be younger, with families.”

Inside the Box

Big box stores can be a blessing in that they often act as an anchor for further commercial development. However, some planners also criticize them for diminishing the unique feel of small towns.

In revitalizing a commercial corridor such as Ogden Avenue, which stretches from the Goose Island neighborhood of Chicago into the exurbia of the city’s outer metro area, a one-size-fits-all approach just won’t cut it. By the time Ogden transforms into Route 34 in Oswego, Ill., the corridor is much more oriented to big-box stores and automobile traffic. The challenge for Rod Zenner, Oswego’s community development director, is to attract high-profile retail while still maintaining the character of the community. To accomplish this goal, Zenner works to create “unifying architecture” for strip mall developments with names like “Prairie Market” and “Oswego Commons.”

“With the architectural themes, they can say, ‘Hey, I’m part of the Prairie Market project,’” Zenner says, “but still have that corporate look if they want.”

Recruiting the Right Investors

The challenge for real estate developers in smaller communities is attracting businesses that will truly thrive in their particular markets. But planners note that the law of supply and demand is incredibly nuanced in this case.

“So often you have people who say, ‘We want a grocery store,’ or ‘We want a Starbucks,’” Milder said. “What you want may not be what you can get.”

Instead, Milder relies on market research to find what a community of a certain size and economic profile can support. He notes that a town the size of Sherwood cannot sustain apparel and furniture stores as easily as it can beauty shops, restaurants, and used-car dealerships.

But the analysis isn’t always so cut-and-dried. Milder notes that commercial enterprises that are willing to alter their methods of delivery or their stock of products can be more successful than those with a less customized business model. He says drug stores that have other functions (selling toys and greeting cards, for example) stand a greater chance of making it in smaller markets. A dry cleaner that will pick up and deliver can expand its “trade area,” making it more viable in a rural community. Even specialty stores can thrive if they seek out niche markets.

“A sporting goods store ... that could social network with [local sports] leagues, they could have a good chance of making it,” Milder says.

He adds that one major asset in attracting businesses to an area can be found in the real estate profession. Milder encourages planners to find partners in real estate professionals who know their community well.

“Search them out,” he says. “They can be real treasures.”