Navigating Zoning Challenges for Successful Retail Repositioning

Retail’s evolution continues to bring new opportunities and challenges for owners and developers looking to revive existing centers.

Bohler Associate and Pittsburgh Branch Manager Michael Takacs, RLA joined Martin Sweeney, SVP-Acquisitions and Asset Management, M&J Wilkow, Ltd., and Jason Cannon, First VP, CBRE to talk about adaptive strategies, repurposing solutions, and navigating the repositioning of tired retail centers at a recent NAIOP Pittsburgh event. The panel tackled questions from the city’s real estate community on the specific challenges associated with adding non-traditional uses like fitness centers, move theatres, healthcare, and multifamily residential units to existing centers. We caught up with Michael to give us a pulse on the evolving market. He offered insight on navigating the challenges of integrating new uses into existing centers.

What’s the biggest challenge you see developers facing in their attempt to integrate new uses into existing centers?

Zoning challenges. Many regional codes haven’t evolved to keep up with development trends, including the integration of widely different uses. As a result, owners and developers face complicated and time-consuming zoning hurdles when looking to introduce non-traditional uses into their existing centers.

The way we “shop” at these non-traditional uses is different. How do you see that impacting development?

More zoning challenges, specifically parking related. Non-traditional uses generally draw a lesser parking ratio, as well as different peak times than a traditional mall. Additionally, the typical mall shopper has evolved from parking and walking the mall for several hours to shopping online and picking up in-store – they’re in and out, which alleviates parking. Many zoning codes call for much more parking than tenants really need, which takes away from usable, leasable space.

Given this challenge, what’s the best way to move a mixed-use project that’s facing zoning challenges forward?

Start by talking with the town to gauge their willingness to work with the project and adapt their regulations.

Your consultant team should review all permit and approval documentation. Exceptions to the code, as well as conditions or limitations, may already be in place for the site, allowing the team to work within those parameters rather than go back to the town for additional modifications. Be sure your consultant team understands the operations of the proposed non-traditional uses, so they can effectively advocate for the project on your behalf.

Consider opportunities to creatively reallocate leasable space, or simply ask for a parking variance to accommodate the tenant changes.

Learn more about our Pittsburgh team and how we can help with your development needs.