Downtown View: Chain Store Sorrows

Local businesses or chain stores. Which is best for Boston neighborhoods and such shopping attractions as Faneuil Hall Marketplace?

The tension has resurfaced recently with a local merchant at Faneuil Hall threatened with eviction, two San Francisco chain stores opening on Charles Street on Beacon Hill and fear by North Enders that Starbucks could overwhelm locally-owned Italian-style coffee shops with their unique atmosphere.

“This is a problem all over the city because the national chains can afford the high rents and tourists want safe, sanitized, predictable experiences,” said Nick Dello Russo of the North End. “It’s a tragedy.”

Let’s start with Faneuil Hall. In March, the Boston Pewter Company was threatened with eviction because marketplace manager Ashkenazy Acquisition Corporation erroneously accused owner Jeff Allen of being in arrears. Eventually, Allen worked out the problem and was allowed to stay.

But he still doesn’t have a signed lease from Ashkenazy, so he can’t get a lower price for bulk ordering because he doesn’t know if he will be in business in two years, when he would finally sell all he had bought. Other local merchants are in the same boat, he said, without leases, while Ashkenazy offers new chain stores, such as Uniqlo and Sephora, long leases. (Barry Lustig, Ashkenazy’s executive vice president handling leasing, did not return my phone call about this matter.)

For almost five years, Faneuil Hall’s local shop owners and many Boston boosters have grown increasingly worried that the marketplace will lose its Boston feel and become like every other mall in America. Without shops unique to Boston, will attendance lag and businesses suffer? So far, Ashkenazy’s practices have only fanned those flames of fear.

Charles Street aficionados suffer from the same concern. Benefit, a Louis Vuitton Moet Hennessy-owned cosmetics chain with more than 3,000 shops or department store operations, has moved into a prominent corner location formerly occupied by a local cosmetics shop. Margaret O’Leary has leased space formerly occupied by the locally-owned women’s shop, Wish. These San Francisco-based chains want to be in up-market neighborhoods. Steve Young, owner of the building Benefit has moved into, said he believed Benefit would fit in nicely with the other businesses on the street, and he wanted stability in his property. Furthermore, Benefit could wait until the local shop that was vacating the space managed its move.

While the North End still has restaurants, groceries, Mike’s Pastry and other local shops with a distinctly Italian feel, North Enders are also worried about losing their flavor. “If you want an espresso you could go to Starbucks on Atlantic Avenue or to any of the coffee shops on Hanover Street,” said Dello Russo. “Which would be the more authentic experience and the more enjoyable?”

Dello Russo said he’d prefer “having a really great coffee at the Caffé Paradiso made by the Vietnamese barrista who has worked there for over 30 years and listen to the locals argue about the soccer game playing on one of their TV sets.”

This isn’t just nostalgia. Chain stores moving in to a business district often have been shown to adversely affect that neighborhood. The City of Boston’s Small Business Plan, issued in March, quoted a person identified as a business service provider on how chain stores have pushed out local businesses on Newbury and Boylston streets.

“There has been more of a shift towards the larger national businesses, and they’ve created tremendous pressure for real estate,” the person said. “Small businesses can barely survive in the Back Bay.”

Local ownership has a more positive effect on the local economy than does a chain store operation. Economic impact analyses from the Urban Conservancy, the Institute for Local Self-Reliance and others from such disparate places as Michigan, Maine, San Francisco, New Orleans and Chicago show that local businesses purchase more goods and services from nearby vendors than do chains. They tend to employ more people per unit of sales. They do their banking locally. The staff tends to be more stable. They tend to donate more to neighborhood causes and participate more in local efforts.

The mayor’s small business plan is aimed locally, not on chains. It recognizes that “Small businesses add so much value and character to Boston’s neighborhoods . . . Small business owners are stewards who invest in our neighborhoods and our neighbors.”

There are a few bright spots for the merchants and residents who value locally-owned businesses. Karilyn Crockett, director of economic policy and research in the Mayor’s Office of Economic Development, said city hall is focused on “supporting the long-term stability of small businesses that are home grown.” Her office helps local businesses gain access to capital and addresses the problem of high rent that invites only chains. She said she is also open to such zoning changes as Concord, Massachusetts, has made that limits the number of chains in one area.

A plus for the North End and Beacon Hill is that their interior shopping streets generally have spaces too small for the chains’ formula.

In the end, though, keeping neighborhood districts local depends on the neighbors. “How much do we, as a community, value diversity?” asks Beacon Hill resident Susan McWhinney-Morse. “How much energy and creative thinking are we willing to expend to keep Charles Street a place where small, local merchants can succeed?”

Downtown View is a column by newspaperwoman Karen Cord Taylor who founded The Beacon Hill Times in 1995 and served as its editor and publisher until late 2007. She also founded and served as editor and publisher of the Charlestown Patriot-Bridge and The Back Bay Sun weeklies. Karen now works from her home in downtown Boston and blogs at BostonColumn.com. Please feel free to leave responses in the comments section below.