Last night, the Common Council Legal Committee took up the subject of the city's current law restricting formula businesses: Article XIV of the city code, "Community Character Preservation."
Early on in the discussion, Councilmember Ryan Wallace (Third Ward), who is a member of the committee, talked about the exceptions to the current law: (a) federally or New York State chartered banking, savings and loan, and trust institutions; (b) pharmacies and drugstores; (c) stores where the overwhelming majority of the foods sold are unprocessed or minimally processed and intended for preparation and consumption by the purchasers at another location--in other words, grocery stores; and (d) convenience stores that also sell gasoline. In this context, Wallace mentioned CityTarget, as if suggesting that such stores should also be exemptions to the city's formula business ban. That idea didn't seem to get much traction.
Councilmember Margaret Morris (First Ward), who chairs the committee, expressed the opinion that the intent of the law was OK, but it didn't "cover a lot of possibilities." She cited Westerlind, which opened its fourth store in Kingston before its store at 419 Warren Street opened. (The law defines a chain as having four or more establishments, hence the Hudson store should not have been allowed to open.)
Morris spoke of problems of enforcement and identifying businesses that are chains, as well as the question of what might happen if there were to be a chain that originated in Hudson. She didn't mention the question of what happens when Hudson is the fourth location, as is the case with Savona's Trattoria, and the business subsequently establishes additional locations. Morris said she would work on proposing some revisions to the existing law, saying that the needed changes to the law were "mainly a question of tightening up."
Councilmember Mohammed Rony (Second Ward), also a committee member, said he had found a resource about formula retail law. That resource, which is a publication of the Institute for Local Self-Reliance, can be found here.
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There are definitely gaps in the current law which seem to center around permitting and the general hobbling of the Planning Board under its current membership but primarily its leadership. It's good to see the Council take it up. I hope that work through the actual process the Code Enforcement Office has to follow to find the gaps and fill them in a manner that is feasible for the CEO employees. We tried to do that the first time around but clearly didn't do as thorough a job as we should have.
ReplyDeleteIt will be interesting to learn what other municipalities have done to deal with the situation where a local business opens its 5th store somewhere. Ostensibly, it could be denied a building permit under the current Hudson code, but not sure any entity that meets the criteria for a formula business needs 2 or more locations in such a small city. Frankly, when the current law was drafted, we avoided the issue in light of San Francisco's experience viz. The Gap. The determination was made not to get in the way of any business located here that was successful enough to grow elsewhere. And, frankly, I find it difficult to understand why Hudson would want to. I can't think of a more entrepreneur-unfriendly act than hobbling a successful business. But then I find much of what the Council does inexplicable.
Allowing Westerlind to open was clearly just a failure to apply the existing law, presumably due to inadvertence. Part of the building permit application should include a question as to whether there are other stores that are part of a chain, and if so, how many, and where. If the application is filled out falsely, there should be prescribed penalties.
ReplyDeleteI agree with Mr. Friedman, that Hudson should not punish success if a concept adds a 5th store elsewhere later, by forcing the Hudson location to close or whatever. That among other negative consequences, would run the risk that many entrepreneurs would just give Hudson a pass, given the prescribed strait jacket against subsequent expansion. That would just be nutter.
The intent of the law is good – to preserve the character of Hudson. I love Starbucks, Five Guys and Ben & Jerry’s, and shop at Anthropologie, J Crew and Serena & Lily. But any of these in Hudson would significantly detract from the character and charm of the town. We’ve seen this elsewhere: the popularity of a locale entices the chains to move in, but in doing so, they start to undermine the very qualities that made the place so attractive to begin with. The downtown becomes generic. Small businesses get pushed out by competition for customers, and rents.
ReplyDeleteThis can be construed as elitist regulation, driven by new transplants who like things “quaint” and can jet off to the big city any time they want a Shake Shack fix. Some Hudson residents might actually LIKE a Five Guys in town. But Hudson’s economy and tax base is hugely dependent on tourism. Allowing chains to come in devalues the attraction and risks killing the goose that lays the golden eggs. That would be bad for everybody.
The problem is, location count alone isn’t a good measure. A better formulated law would consider not only number of locations, but where those locations are. Most people would say Westerlind and Savona’s should not fall under the law (regardless of one’s personal opinion on what they offer) – they’re run by local entrepreneurs, all their locations are within 50 miles, and they support the local economy. There’s a clear difference between that and, say, Chipotle.
Other municipalities like Provincetown, Nantucket, McCall (Idaho) and Ogunquit have similar laws. Hudson should learn from what’s worked for them when crafting its regulations. And of course, enforce them.
It seems to me that 4 locations is just simply to low a number. The intent of the law is to prevent large chains and formula businesses from locating here. Those chains usually have dozens or hundreds of locations. Chains with four or even ten or twenty locations are usually local businesses who saw expansion opportunities locally or regionally. They should be encouraged and welcomed.
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