Section 10-A708. ED-2.2 THE RETAIL ECONOMY

 

708.1A robust retail sector has the potential to generate significant tax revenue, provide employment and income for residents, enhance the vitality of the city, and improve shopping, dining, and entertainment choices for District neighborhoods. In recent years, the range of retail options in the city has been increasing. Gallery Place and U Street have become major shopping, entertainment, and dining destinations, drawing a mix of tourists, workers and residents. Established retail districts such as Friendship Heights, Georgetown, and Adams Morgan continue to draw patrons from outside as well as inside the city. Retail is also returning to the city’s eastern quadrants, including locations like Anacostia Gateway and Barracks Row, after years of decline. 708.1

 

708.2Nonetheless, the District still loses, or “leaks,” an estimated $1 billion per year in retail spending from its resident population, amounting to almost $4,000 per household. The leakage is even higher when the potential spending of the daytime population, including workers and visitors, is included. The District’s underperforming retail sector has a pronounced impact on its fiscal health, since retailing pays both real property taxes and sales taxes, and is more also likely to employ District residents than office development (see text box on next page). 708.2

 

708.3Efforts are underway to expand retail choices and strengthen existing retail businesses, both in Central Washington and in District neighborhoods. Continued planning and market assessment will be needed to ensure that the District is targeting an optimal mix of goods and services, and in the right locations. An effective retail strategy should include a focus on those uses that are missing or under-represented today, such as grocery stores, home furnishings, and home improvement stores. It should also assess the potential for new retail formats, such as “vertical” car dealerships that make more efficient use of limited and expensive land. If the full market potential of retail is tapped, as much as seven to ten million square feet of floor space might be accommodated in the next 20 years. 708.3

 

708.4Policy ED-2.2.1: Expanding the Retail Sector

 

Pursue a retail strategy that will allow the District to fully capitalize on the spending power of residents, workers and visitors, and that will meet the retail needs of underserved areas.

 

708.5Policy ED-2.2.2: Downtown Shopping

 

Strengthen Downtown Washington as a regional retail destination in order to capitalize on its status as a transit hub and its historic role as the cross-roads and central marketplace for the Washington metropolitan area. Downtown should be developed and promoted as a regional retail destination of choice, with multiple traditional and non-traditional retail anchors, a well-programmed variety of consumer goods retailers, specialty shops, retailers unique to the Washington region, and a wide variety of restaurants and entertainment venues. 708.5

 

Gallery Place has become a major shopping, entertainment, and dining destination, drawing a mix of tourists, workers, and residents.

 

708.6The Importance of Retail Sales to the District’s Finances

 

An analysis of the fiscal impacts of different land uses was performed as part of the revision of the Comprehensive Plan to better understand the implications of future land use decisions. This analysis found that retail floor space generated more tax revenue for the city than comparable amounts of housing or office space. In fact, 100 square feet of “typical” retail space generated $1,995 of revenue annually, compared to $1,246 for office space, and $869 for market-rate condominiums. For a “typical” market-rate condominium, 70 percent of the municipal revenues generated were from income taxes and 25 percent were from property taxes. By contrast, almost three-quarters of the municipal revenue derived from retail space was from sales tax.

 

The analysis found that mixed use development may be more favorable than single-use development from a revenue standpoint. Combining retail and residential uses allows the District to capture sales taxes, income taxes, and property taxes, while also reducing retail “leakage” and providing housing for the local workforce. Likewise, retail in tandem with office development provides an opportunity to capture worker spending on retail sales, currently a missed opportunity in many parts of Downtown.

 

Some caveats to this analysis are worth noting:

 

•Although retail uses are the best generator of revenue, this is dependent on the health of the economy and the specific mix of retail businesses. Some types of retail clearly generate more sales tax revenue per square foot than others.

 

•Office uses are the most reliable generator of revenue since a higher proportion of the revenue comes from property taxes, which fluctuate less than income and sales taxes.

 

•The fiscal impacts of residential uses are highly sensitive to the income levels and household characteristics of occupants. For example, a market rate housing unit occupied by two income earners with no children generates more revenue and requires fewer municipal expenses than an affordable family unit.

 

While fiscal impacts alone should not drive land use decisions, this type of data can help the city create balance, and achieve an appropriate mix of uses and activities as it grows.

 

708.7Policy ED-2.2.3: Neighborhood Shopping

 

Create additional shopping opportunities in Washington’s neighborhood commercial districts to better meet the demand for basic goods and services. Reuse of vacant buildings in these districts should be encouraged, along with appropriately-scaled retail infill development on vacant and underutilized sites. Promote the creation of locally-owned, non-chain establishments because of their role in creating unique shopping experiences. 708.7

 

708.8Policy ED-2.2.4: Destination Retailing

 

Continue to encourage “destination” retail districts that specialize in unique goods and services, such as furniture districts, arts districts, high-end specialty shopping districts, and wholesale markets. Support the creative efforts of local entrepreneurs who seek to enhance the District’s destination retailing base. 708.8

 

708.9Policy ED-2.2.5: Business Mix

 

Reinforce existing and encourage new retail districts by attracting a mix of nationally-recognized chains as well as locally-based chains and smaller specialty stores to the city’s shopping districts. 708.9

 

708.10Policy ED-2.2.6: Grocery Stores and Supermarkets

 

Promote the development of new grocery stores and supermarkets, particularly in neighborhoods where residents currently travel long distances for food and other shopping services. Because such uses inherently require greater depth and lot area than is present in many commercial districts, adjustments to current zoning standards to accommodate these uses should be considered. 708.10

 

708.11 Policy ED-2.2.7: Planning For Retail

 

Coordinate neighborhood planning efforts with the District’s economic development planning and implementation programs to improve retail offerings in local commercial centers.  Consolidate retail according to existing and forecasted demand and consider converting retail to other uses where an increased consumer base is required.

 

708.11a  Policy ED-2.2.8:  Innovative Retail

 

Identify and implement new strategies to recapture retail sales leakage.  This could include having mobile retail units in neighborhoods in which there might not be enough market demand to support an entire store, helping new businesses to get established, or helping pop-up stores to introduce new products and concepts, provide seasonal merchandise and services, and fill commercial buildings during short-term vacancies.

 

708.11b Policy ED-2.2.9:  Clustered Retail at Transit

 

Cluster retail around areas of high-foot traffic, including Metrorail exits, bike trails, future streetcar stops, and other multi-modal meeting points.  Create strong nodes of character to effectively link retail and transit.

 

708.12Action ED-2.2.A: Retail Action Agenda

 

Prepare and implement a citywide Retail Action Agenda. The Agenda should include an evaluation of the current and projected amount of market supportable retail, strategies for overcoming retail development barriers, neighborhood-specific evaluations, and recommendations for new retail development and assistance programs.

 

708.13Action ED-2.2.B: Retail Ceiling Heights

 

Determine the feasibility of zoning amendments which would permit higher ground floor retail ceiling heights in commercial and mixed use districts. The building height limits in several zone districts preclude the development of ground floor space in keeping with national standards without reducing overall gross leasable building area or placing a portion of the ground floor below the street level. 708.13

 

authority

Pursuant to the District of Columbia Comprehensive Plan Act of 1984, effective April 10, 1984 (D.C. Law 5-76; D.C. Official Code § 1-306.01 et seq.), the Comprehensive Plan for the National Capital: District Elements of 2006, effective March 8, 2007 (10 DCMR A300 through A2520) (“Comprehensive Plan”).

source

Comprehensive Plan Amendment Act of 2006, effective March 8, 2007 (D.C. Law 16-300) published at 54 DCR 924 (February 2, 2007); as amended by Comprehensive Plan Amendment Act of 2010, effective April 8, 2011 (D.C. Law 18-361) published at 58 DCR 908, 918 (February 4, 2011).

notation

The provisions of Title 10, Part A of the DCMR accessible through this web interface are codification of the District Elements of the Comprehensive Plan for the National Capital. As such, they do not represent the organic provisions adopted by the Council of the District of Columbia. The official version of the District Elements only appears as a hard copy volume of Title 10, Part A published pursuant to section 9a of the District of Columbia Comprehensive Plan Act of 1994, effective April 10, 1984 (D.C. Law 5-76; D.C. Official Code § 1 -301.66)) . In the event of any inconsistency between the provisions accessible through this site and the provisions contained in the published version of Title 10, Part A, the provisions contained in the published version govern. A copy of the published District Elements is available www.planning.dc.gov.