Downtown Affluence: What’s It Really Cost?

Back in January, Bill King, planning and development manager for the Downtown Raleigh Alliance (DRA), took inventory of his downtown storefronts and realized retail shops needed help staying downtown. (We’re talking soft goods—clothing, shoes, home décor, art and gifts.)

As the economy improves, buildings downtown are selling and rents increasing, often tripling in a year. Independent retailers have had to give up downtown spots.

“One of our challenges is that we don’t have all that many vacant storefronts that are viable for retail right now,” says King. “There’s fierce competition for the ones we have because bars and restaurants want to use them. So we found space is an issue and the ability to convert spaces into stores; our retail prospects needed more resources to do that.”

Last month, the DRA announced it will offer grants of up to $5,000 to upfit retail locations.

“It helps them reduce their start-up costs and frees up a little more money to take their own funds and put more into inventory, marketing and promotion and help them get off to a faster start,” says King, who is hoping the city will match those funds.

Grants are important because downtown rents are not controlled; they rise and fall with the market.

“We don’t have those mechanisms to artificially keep the price low so we have to work on the other side and make sure the stores are competitive and doing well and can afford it,” says King.

The DRA will also offer free memberships to new retail businesses so they can participate in First Fridays and other promotional opportunities.

“In talking to stores, we found that they need help that first year or so to get off the ground so people know who they are.”