Planning Department Releases Study Recommending Ways to Strengthen Diverse Retailers

The county’s Planning Department has released a study that recommends a series of proposals that could strengthen diverse retailers in three areas.

The Retail in Diverse Communities Study looked at three communities—Silver Spring, Takoma-Langley Crossroads, and Wheaton—where local businesses have faced recent challenges not only from the pandemic, but also from redevelopment (primarily Wheaton) and Purple Line construction.

The study notes that since 2010, the diversity of Montgomery County has been increasing, with 20% to 40% growth in Black, Asian, and Hispanic populations. As these communities expand, minority-serving and -owned retailers become even more important.

“The way that we define ‘diverse retailer’ is independent, privately owned and it is minority serving and/or owned,” said Todd Fawley-King, real estate specialist with the Planning Department, “meaning it either primarily serves members of the minority community, or it is owned by a member of the minority community.”

The study looked at 279 such retailers in the three communities that generate a total of $137.9 million in sales annually and support nearly 1,400 jobs. In addition, many of these businesses—salons, barbers, restaurants, and other retail outlets owned by and serving communities of color—bring intangible value as social support networks.

NG&S–Neighborhood Goods & Services; NRS–NonRetail Services; GAFO–General Merchandise, Apparel, Furniture, and Other; F&B–Food & Beverage

In addition to the factors mentioned above, many of these businesses are hampered by other challenges including barriers to initial occupancy, disadvantageous lease terms, finite funding, limited financing opportunities, and systematic exclusion from business networks, the department noted.

The first recommendation listed in the study is to create diverse retail liaisons for each area, “responsible for coordinating efforts by existing organizations, providing direct connections between independent businesses and the county, and linking targeted minority-owned businesses to financial, technical, and organizational resources,” the study reads.

“The diverse retail liaison is the first tool that we presented because it really is the base tool that’s needed right now,” Fawley-King said. “We can’t do much more unless we expand our capacity to engage with small and really micro-businesses.”

These are owners busy running their businesses and often don’t have time to get involved in learning about, or applying for, government programs to assist them, for example.

“We have tried to frame this tool as being a partnership between Montgomery County and a nonprofit organization that has interest in this,” Fawley-King said. “We don’t have the details of that built down to the letter.

“It would be a partnership between the county and a nonprofit. Ideally, the county would be sharing the cost of those positions,” he added.

A second tool is the creation of a formal minority business designation.

“A minority business designation is a statistics way of identifying businesses among the category we’re looking at here to make it easier for us target resources towards them,” Fawley-King said. “What it allows the county to do is to create programs specifically for designated minority diverse retailers.”

The current designation of a small business is up to 50 people, and Fawley-King pointed out there’s a huge difference between a business of three or five people and 50, especially in their ability to apply for resources through county programs.

“It’s a way of helping to target the other programs that we’re proposing here,” he said. In addition, it could be tied, for example, to a designation of a portion of the county procurements to these types of businesses.

Creating a commercial tenant’s bill of rights, similar to what exists for county residents, with model leases, legal and mediation services and additional transparency in fees charged for things like maintaining common areas.

“[Owners are] not land-use lawyers. They run a business,” said Fawley-King. “They don’t necessarily know everything that they are eligible for with their landlords and everything they’re required to do.

“They’re at a disadvantage when dealing with landlords who know far more, and have more power, in lease negotiations, maintenance requirements and other factors involved in renting and occupying a business space,” he added. “It’s a fairly low-cost way of trying to empower tenants who want to advocate for themselves.”

Other recommendations include zoning changes to designate micro-retail spaces less than 1,000 square feet, or limiting the width of storefronts to create more affordable spaces.

The department also recommends creating a loan pool for these types of businesses, billing real and personal property taxes monthly instead of near the end of the year, and increasing place-making efforts in these communities.

While some regulations would require legislation and additional budget resources (and be in effect county-wide), others, such as zoning changes, could be implemented through the master plan process, which Silver Spring is undergoing right now with the Silver Spring Downtown and Adjacent Communities Plan.

“The link between the Silver Spring master plan and [this report] is one thing everyone we talked to about the Silver Spring master plan is how much the diversity of Silver Spring and the fascinating and interesting small retail businesses, how important that is to the community’s identity,” said Fawley-King, who is a member of both the study’s team and the master plan team.

“And a big part of that really is the retailers we’re talking about here,” he said. “The community views them as integral and one of the things that you hear is whatever you do, make sure that that doesn’t get lost.”

Planning Department graphics

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