Free rent not good enough...

[QueSi2Opie]

From the Business Journal...

Free rent can't trump axiom of location, location, location
David Twiddy
Staff Writer

Embassy Properties Inc. has discovered just how hard it is to market prime downtown space to high-quality retailers.

Sometimes you can't even give it away.

Since spring, the Kansas City property management company has offered for lease two street-level spaces at 12th and Walnut streets with a combined 4,700 square feet.

The price? "Free rent to selected retailers" says the signs that remain the only tenants as winter creeps in.

Todd Vasco, the agent for the spaces, said Embassy didn't want just another office going into the spaces but something that would appeal to the growing number of downtown residents. Embassy itself is developing and leasing a 50-unit loft complex in the building's upper floors.

Vasco said the company's current prospects include a pair of convenience stores, one with a deli.

"Our goal is to find a business that is going to benefit the community as a whole," Vasco said, adding that the company has turned down offers from such prospects as a dog-walking service and a clothing store. "You figure when you say 'free rent,' people would jump on it."

Is this another cautionary tale of the fickle market for retail Downtown or simply a matter of location?

Tucker Graves goes with the latter. Graves, who owns Garrett's Corner Market in the River Market, said he is looking to open another combination restaurant, nightclub and grocery store at 10th Street and Baltimore Avenue.

He said he was approached about the 12th and Walnut space but passed, saying the location on 10th Street gives him parking in a soon-to-be completed deck and customers in the nascent Library Lofts. It also is central enough to give him the business lunchers who keep his doors open.

"We think it's a natural fit for us," Groves said.

Bill Dietrich, president and CEO of the Downtown Council of Kansas City, said the organization is trying to do more to bring companies like Graves' Downtown and fill spaces like Vasco's. Dietrich estimated that 15,000 people live between 31st Street and the Missouri River, which he said provides the critical mass needed for grocery stores, shopping and entertainment. The challenge now, he said, is convincing the developers that Downtown is ready. Which is why Dietrich said that although it's unusual to use "free rent" as a selling tool, it's a good one for a vibrant Downtown. "That is going to be a premier place very quickly," he said. "We're in a phase where we have to be very aggressive in bringing back retail, and (Embassy) is being very aggressive in saying, 'We're only interested in certain, quality retailers.' I think you have a great emerging market; we just have to make it easier for them."