Trellis and the Miracle Mile
Commercial Development Analysis
Executive Summary
THE E. MCDOWELL BUSINESS CORRIDOR – “MIRACLE MILE”
The E. McDowell Business Corridor is the natural center of Trellis’ primary service area. Called the Miracle Mile, it is surprisingly intact. Even with decades of disinvestment, this corridor has only two vacant lots.
The Miracle Mile is approximately 0.8 miles long. It was given this name because it was one of Phoenix’s most glamorous streets in the 1950s. The corridor continued to maintain itself but was injured by the growing popularity of regional malls. In 1989, the street was widened which increased vehicular speed along the corridor and made crossing the corridor treacherous for pedestrians. Today, many businesses thrive on destination traffic as the automobile remains the primary way that customers visit the corridor. The building stock along the Miracle Mile is primarily one-story structures, with ample off-street parking. There is minimal evidence of any recent new construction occurring. However, there are multiple proposed projects planned for the corridor.
These structures are primarily storefronts, and are almost exclusively occupied by independent businesses with only a few minimal exceptions, including a Family Dollar, Rite Aid and Shell gas station. These independent businesses are of various quality, age and services offered. Plan F Solutions is amazed at the quality customer service, aesthetic, and how well stocked these businesses are relative to other similar districts around the country.
There are 87 buildable parcels and/or structures along the Miracle Mile. Some of these buildings are single storefronts and others have multiple storefronts. At the time of this report, 67 buildings have some level of occupancy. Plan F Solutions calculated an owner-occupancy rate for the corridor based on whether one of the active storefronts was also the owner of the building. Of the active storefronts, approximately 52% also own their building.
For all historic commercial districts, the connection between the business corridor and the adjacent residential community is intrinsically connected. In most urban areas, these commercial districts developed due to migration patterns and the need for an ethnic enclave to find the goods and services found in their home communities. As such, these commercial districts were typically founded by recent immigrants seeking employment and connection with a newly formed neighborhood. As such, the very soul of a commercial district is typically linked to the history of the neighborhood as a whole.
For the Miracle Mile, the corridor launched was most vibrant during the massive expansion of Phoenix in the 1950s. Over the decades, malls and increased sprawl diminished the importance of the Miracle Mile. This decreased importance when coupled with the decision to expand the street width in 1989 led to today’s depressed occupancy rate and commercial rental rates.
But just as during its founding, the Miracle Mile remains intrinsically linked to the trajectory of the surrounding community. While current and future customers can come from anywhere in greater Phoenix, most daily visitors are likely to continue to be from the neighborhood community. As such, it is germane to this analysis to explore the community assets adjacent to the Miracle Mile. You can dive deeper into Plan F’s findings in the full report.
INVESTMENT STRATEGY
It is clear the Miracle Mile is an important component to meet the daily needs of neighborhood residents. The vacancy rate documented is likely due to the low buying power of residents and the poor reputation of the neighborhood among outsiders. Potential gentrification would be easy to accomplish as the building stock is handsome, the corridor is intact, and property values are low. For Trellis to protect the neighborhood from potential displacement, it will require a significant investment of time, energy and resources.
Property Ownership is the Key!
Plan F Solutions believes intensely that there’s nothing more important than owning your property, be it residential or commercial. The benefits to residential ownership are clearer and more commonly discussed, but the strength of a community depends on a balance of ownership across property types in order to sustain itself and grow. Let’s talk through a few of the major reasons why commercial property ownership can transform the landscape of a community:
Control. The most obvious benefit is that it removes the absentee landlord’s ability to sell to an out-of-town developer, thus removing the aforementioned displacement of the businesses and individuals who built it back up. Control gives the owner-operator the ability to decide if they want to cash out, or if they want to stay and continue to benefit from their effort. As far as Plan F Solutions is concerned, this is reason enough to create an ownership program.
Pride. We’ve all witnessed what a lack of pride looks like when manifested in a storefront. It’s the photograph attached to every negative article ever written about our communities. When the building is owned and occupied by the business owner, they tend to treat it more like a home (which, in some cases, it is). This maintenance creates a vibe on the street. That vibe creates a story, and that story creates a neighborhood. Instead of a cycle of vacant, boarded-up spaces, it begets a cycle of attraction and growth.
Legacy. As corporate employment becomes murkier, many Americans are looking to create their own future, and to strengthen the future for their children. Small business ownership is one way to create that legacy, but handing off a business with the real estate attached to it is even better. Within 30 years, when done right, this shift could transform our communities self-sufficiency, and create a decent amount of wealth for our residents.
In the full plan (available at the link below), Plan F Solutions outlines multiple strategies that should be deployed to strengthen the corridor and increase local property ownership. Many of these efforts will need to be deployed simultaneously.
For this strategy to successfully buffer the neighborhood from displacement, it has to deploy just as much energy in strengthening existing businesses as it will in reducing vacancy. While there are several initiatives that would improve the sustainability of current businesses, the most important metric that should be benchmarked is the number of owner-occupants. No matter how much effort is expended to strengthen an existing business, it will be for naught unless the business is on a path to own their property and, therefore, its destiny.
The full analysis of the Miracle Mile including suggestions for how to increase owner occupancy as well as district visitability, please download the full report below: