The market is rarely capable of serving the best interests of a great Main Street. The recent explosion of branch banks nationwide, but particularly in New York City (and to a lesser extent here in Chicago) illustrates this: banks all like high foot traffic — more so for the advertising value, since the best billboard is one you can walk into (and extract $1.50 ATM fees from). Problem is, banks generate little foot traffic on their own.

So, one property owner maximizes his own value by kicking out the current tenant and leasing to a bank. He wins, since banks pay lots of rent.

Then, every other property owner at the corner does the same. They lose! Overall foot traffic declines, and the banks might eventually leave. (If the neighborhood doesn’t really decline, then the banks will remain a deadening influence there for decades — Lincoln/Belmont/Ashland is one good example.) In any case, the neighborhood is worse off.

One advantage malls have is that their centralized ownership can exploit synergies; they’re willing to sacrifice a little bit of revenue over here in order to get a lot more revenue over there — an unprofitable lease here (for a department store or movie theatre) can be subsidized by a wildly profitable lease over there (for a fast food joint). Main Streets under multiple ownership can’t do this, unless there’s a really aggressive manager who’s willing to strongarm folks into doing things.

Proactive management of Main Streets is one of the biggest lessons from the National Trust for Historic Preservation’s Main Street Center work.

[Originally posted at urbanphoto]