HomeMy WebLinkAbout12-11-16 Public Comment - L. Bowman - Downtown Development December 11, 2016
Mayor and Commissioners,
In the weeks since the City Commission meeting concerning the Downtown
Development Plan I have been reflecting on the meeting and the challenges of balancing
downtown density,parking,and homeowners concerns. I thought the meeting was
educational,and the citizen comments were interesting. Steve Schnee made some
excellent points, and I would like to elaborate on his comment that downtown is fragile.
Rather than fragile,I would characterize downtown as vulnerable. Really,this is not
new. I can remember when the downtown had two automobile dealerships, 2 hardware
stores, a drug store, 3 gas stations,the newspaper, a furniture store, and J. C. Penney.
Over time,most of these businesses have either moved out of downtown or have gone out
of business. Our response at Owenhouse Ace Hardware to the concern of the long term
viability of the downtown was to add a second store outside of the downtown.But,for
the most part, downtown has survived the changes and the arrival of"Big Box"
competition. Today the challenge for downtown is of a different magnitude altogether.
And although it did not come up during the meeting, that challenge is the Internet, and
more specifically Amazon. Since they have no physical presence here,they are sort of
"out of sight,out of mind", and I think we tend to under estimate the impact they have on
brick and mortar stores.
Amazon is more than a big aggressive retailer. Their goal is to control the retail
economy. Within 5 years,it is estimated that 20%of the country's 3.6 trillion dollar
retail marketplace will be online,and Amazon will have 2/3 of it. Half of all online
searches start with Amazon,and currently half of every dollar spent online goes through
Amazon. Five years ago online spending was$170 Billion. Last year online sales were
$343 Billion,and Amazon had 40%of that. They started out selling books,and they now
control 70%of all book sales,print and digital. Borders has declared bankruptcy,Barnes
and Noble has closed dozens of stores and cut back on its Nook, and Sony has quit selling
its E-Reader. But it would be a mistake to consider them just a bookseller. They sell
more apparel than WalMart,and only Best Buy sells more electronics. They own other
online businesses too,such as Zappos,Diapers.com,Twitch(an online gaming platform
with 100 million users),and Audible,the world's largest audio book company. And
Amazon plays hardball. In just one example,several years ago they tried to buy Zappos,
but Zappos did not want to sell. So Amazon started selling shoes at less than cost,
offered free next day delivery,and a$5 dollar rebate. Zappos had to either sell or go out
of business.
The challenge for other retailers is that Amazon's goal is control of the retail economy,
and sacrifices profits to achieve that. Over the last five years,WalMart has reported$80
Billion in profits. Amazon's profits were$1 Billion. It is estimated that they lost$150
million in competing with Zappos until Zapppos finally agreed to sell.
More than ever before, retailing is about convenience. Amazon's goal is to make it so
easy to buy from them that you would always go there first. "One click ordering",
merchandise availability from third party retailers through their"Marketplace",and
Amazon Prime are some of the tools they use. It is estimated that the free two day
shipping for Prime customers costs Amazon$1 Billion a year.
Since convenience is driving the retail economy,how can brick and mortar stores
compete? And more to the point,how can we ensure the downtown's continued success?
It is concerning to me that the owners of the two vacant lots from the explosion in 2009
have not felt confident in developing them. Downtown's success rests on many things,
but in the context of a downtown convenience has to be a big part,and I believe it
revolves around two factors. Shopping downtown is convenient for the people that live,
work, and visit in the downtown area, so both commercial and residential development in
downtown is important. The interface between development and single family residences
is a challenge,and there needs to be a compromise. Much has been made about the cost
of the new condos,apartments and hotels in downtown,but these are the people that have
the desire and means to spend money in downtown. The second factor is parking, and it
becomes more challenging the more successful we are at creating development in
downtown.Employee parking is a constant challenge. Big Boxes and Malls have
succeeded in giving the consumer a concentration of stores,like downtown, but with easy
parking in order to be convenient. We need to have available, easy parking downtown to
be a convenient option for consumers. We need a second parking garage on the south
side of Main Street.
Amazon has no presence in Bozeman,so they pay no taxes but they divert sales from our
brick and mortar retailers who do pay taxes. One study claims that the number of
independent retailers has dropped by over 100,000 over the last 15 years,and that
Amazon's online success has resulted in the loss of almost 295,000 jobs in brick and
mortar stores. Amazon's move into the grocery business will result in even more.
Downtown,and in fact the entire Bozeman retail community,faces huge challenges in
the years ahead. You have the ability to make a difference. Thank you for your time.
This letter is not written to either support or oppose the Black and Olive project,but
rather to offer some thoughts on the overall downtown development plans.
Since ly,
Lar owman