Academic journal article Notre Dame Law Review

Shells of the Stores They Once Were: Returning Vacant Retail Property to Productive Use in the Midst of the "Retail Apocalypse"

Academic journal article Notre Dame Law Review

Shells of the Stores They Once Were: Returning Vacant Retail Property to Productive Use in the Midst of the "Retail Apocalypse"

Article excerpt

I. INTRODUCTION AND BACKGROUND

In the first quarter of 2017, nine major retailers--as many as in all of 2016--declared bankruptcy, sparking widespread concern that America was in the midst of a "retail apocalypse." (1) The United States has been overstored for decades, (2) but the issue reached a tipping point last year, when retail chains announced almost 7000 store closings. (3) The trend continued in 2018, with over 3800 store closures announced in the first quarter alone. (4) Although there may be uncertainty surrounding what the future of the retail industry will look like, one thing is clear: the communities from which retailers are departing will bear the burden of the shells that have been left behind.

A. The Greyfield Problem

The vacant retail properties that are the central focus of this Note include former malls, strip malls, anchor stores, and "big box stores." (5) These empty structures go by many names: "ghostboxes," (6) "greyfields," (7) retail "shells," (8) and "dark stores," (9) to name a few. The reasons for these vacancies are myriad, but not mysterious: retail chains regularly make the decision to close underperforming store locations; (10) companies go bankrupt; (11) or--most infuriatingly for many residents--companies leave a perfectly fine store empty and, like a hermit crab, move into another slighdy larger store just down the road. (12) The structures often remain empty for years, and they are hard to miss. (13) They were "gut-wrenchingly ugly" (14) to begin with, and the faded outlines of neon signs and empty parking lots littered with plastic-bag tumbleweed quickly turn ghostboxes into depressing eyesores.

Appearance aside, these vacant stores pose serious problems for the public's health, safety, and welfare. They are magnets for crime, particularly arson, theft, drug crimes, and vandalism. (15) Although there is an argument that the distance between such stores and suburban and rural residential areas mitigates the danger to neighbors, the fact remains that ghostboxes make communities less safe and put a burden on municipal services. After a retail shell is vacated, municipalities must often spend "additional public money" for "greater police service to monitor the property, greater fire services due to the likelihood of fires in abandoned structures, and the provision of cosmetic improvements meant to make the property look occupied." (16) Indeed, retail shells "disproportionately affect these public safety costs" compared to vacant residential properties. (17) One study of vacant and abandoned properties revealed that "[although commercial properties make up only 3 percent of Oklahoma City's vacancies, they account for approximately 40 percent of all police and fire calls." (18)

The greatest threat that ghostboxes pose to communities is economic in nature. Municipalities compete to attract businesses, often investing millions of taxpayer dollars in constructing infrastructure and providing subsidies and tax breaks. (19) When major retailers exit so-called "anchor stores" that support smaller businesses in malls, strip malls, and shopping centers, the decrease in foot traffic harms smaller businesses. (20) The longer these stores remain vacant--and it usually is a long vacancy, since it is notoriously difficult to find new ghostbox occupants (21)--the greater the chance that an entire retail plaza will go dark. (22) Communities have long recognized that even standalone retail shells can cause devastating economic disinvestment in the area. As a spokeswoman for one Pennsylvania township, which spent in excess of eight million dollars to purchase a former Bon-Ton department store, said: "The site is highly visible... and a long-term vacancy could have a detrimental effect on [the township's] economic image and tax base." (23)

B. Scope

This Note intends to address responses to retail vacancies by local governments in nonurban areas where land is relatively cheap and low-density development predominates. …

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