Ken Harwood: State Street space becoming too pricey for retailers

Mar 3, 2016

Dear Editor: In response to Mayor Soglin asking City Council members to restrict downtown liquor licenses, this is economics 101. Space on State has become too expensive for retail to stay afloat and new food/bars will be in line to fill in the gaps as retailers fall. I agree a retail balance is needed, but Soglin is literally asking building owners to take more risk and make less money. Even the retailers who own their buildings are realizing they can make more selling the building than by staying in business.

To get retail one needs investors to acquire the properties and lower the rents for retail business or attract high-volume, high-profit retailers. There is a gap here for the investor, because he or she can invest in higher-margin business like, well restaurants and bars. Taking away or limiting these entities does not fill the gap.

Restricting liquor licenses will prevent new attractive businesses from coming downtown and will keep the older watering holes in place. They will increase profits by lowering prices and encouraging the behavior the city is trying to curtail in the first place. High-margin retailers may come as well, but it will be Vaopor shops, not art, clothing and gift stores.

To create a retail vibe and market share, the downtown retailers need to operate like a single store or mall. Co-op advertising, events, tourist and resident hours, an eclectic mix of retailers, and other intensives like a cool little transit system would be a start. The BID (Downtown Business Improvement District) works in this direction and does a good job with limited resources. The mayor may want to turn there for ideas. Once all this is in place, you can be selective with liquor licenses and develop the mix you are looking for.

Ken Harwood

Evansville/Madison