Mr. Holcomb has got it wrong
By Adam D. Probolsky | 05/01/09 | 12:50 PM EDT | 6 Comments
I am not sure I like the idea of tit-for-tat posts but feel it necessary to clarify the message in my Irvine World News column from this week and then give Mr. Holcomb (whom I am sure I have never met) a lesson in how government regulation can hinder economic growth.
In Irvine, the Quail Hill Village Center is located off the Sand Canyon/Shady Canyon exit of the 405 Freeway. It is tucked away in the hillside with virtually no freeway visibility. The retailers and specifically a gas station owner are hurting unnecessarily for lack of business. While indeed the adjacent community of homes may have sizable foreclosures and vacancy rates in the nearby apartments might be high, there is still the chance for more business for the center. So I merely suggested that the stakeholders including the retailers, Irvine Company (who owns the center) and the City of Irvine come together to get some freeway signage to attract motorists from the freeway.
Perhaps Mr. Holcomb lacks the understanding that freeway signage is a difficult topic. Caltrans regulates this activity heavily and my intentions were for the stakeholders to strategize on the best approach to getting the appropriate approvals. In the article I clearly state that at least one merchant is willing to foot the bill for his portion of the sign. And while I do not expect that the city would contribute a dime for the construction cost, donating the land or staff time to the effort is totally appropriate and a wise business decision given the potential for greater sales tax revenues from increased retail traffic.
So you see Mr. Holcomb, given that a state regulatory agency hinders local businesses from promoting themselves to tens of thousands of potential customers smart men and women of entrepreneurial minds ought to come together to overcome such obstacles. Or you could go up to Quail Hill with a dozen Ron Paul bumper stickers and pass them out...see how much that helps.
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6 Comments | Related Topics »Orange County (CA)
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1. Is the " merchant [who] is willing to foot the bill for his portion of the sign " a client of yours?
2. Did you get the nimby anti-cell tower flyers I sent in response to your request?
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|Adam,
Thank you for replying..
Quail Hill Center is hidden from freeway view because Irvine Co. planned it that way. Hiding the strip mall from the freeway made the entire area appear more "upscale" and helped sell a lot of expensive homes. That is, the current situation was the direct result of a commercial decision made by the current landlord, Irvine Co. This was not a case of "government regulation [hindering] economic growth."
Billboards are a "difficult topic," especially in Irvine. Park Place fought ferociously for years to get a bigger sign...and lost. Sprint and Edwards Cinema have had to reduce or remove existing signs. Even the Irvine Spectrum doesn't have a freeway sign in the usual sense. Anyone trying to operate a business in Irvine has to know that erecting signs is going to be tough. It's part of the price a businessperson pays to be close Irvine prosperous customers.
If you can help craft a solution that the residents of Quail Hill and Shady Canyon feel maintains the look and feel of their neighborhood, then bully for you. But everyone one of those business owners knew the situation when they signed their lease - a lease they lose only if Irvine Co. chooses to keep the rent above what they can pay.
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|From strictly a business standpoint what Adam is saying makes sense. As long as the city is not footing the bill for the sign itself I see no problem with this.
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|I am generally in agreement with you, Chris. However, there are two details that matter in this particular case.
1. Irvine Co has a monopoly on commercial real estate in this area. Basic economics dictates that any profits beyond the cost of capital will accrue to the monopoly holder, not the merchant. Translated into English, if the signs increase revenue, Irvine Co. will raise rents because the store owners have nowhere else to go.
2. In the end, it doesn't matter what you or I or Adam thinks; its the opinion of the folks who paid the real estate premium to be in a visually improved, upscale neighborhood that matters. If they like the signage, build away. However, Irvine history suggests that additional commercial signage will not be viewed kindly. GIven that this won't help the business owners anyway (see point 1 above), why bother?
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|Well, a freeway sign might only be a piece of the puzzle. How about some actual marketing to stimulate business?
An ad in the Irvine World News. Use of coupons in a variety of direct mail pieces and the OC Register might also help.
How about some pricing specials? This all costs money too but doesn't involve government intervention.
And if business isn't so great, perhaps the business owner picked a poor location for that sort of business.
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|I wasn't aware that Adam was talking about simply putting some signs up. That's not a bad idea but there's a long list of businesses in and around Irvine who would love to do the same thing (even The Irvine Company) but can't for the reasons Tyler mentions. As much as we want the business, we don't want to look like the 5 fwy corridor in LA County. Well maybe not that bad but you get the point.
Don't think the Irvine Co has a monopoly though. They do own a lot of the commercial and retail space in this area (all of it in Quail Hill) and I'm sure that gets them some kind of premium, but businesses still have a choice of where they want to locate (look at Kean Coffee) and the Irvine Co. isn't enriched by empty space.
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