Client Corner
March 1, 1999
Tara A. Scanlon- Washington
Holland & Knight LLP has been fortunate to represent EastBanc, Inc. in
connection with the acquisition and leasing of a series of historic properties
in the Georgetown area of the District of Columbia. Led by its President,
Anthony Lanier, EastBanc has embarked on a retail development strategy to
revitalize the historic Georgetown shopping areas radiating from the
intersection of "M" Street and Wisconsin Avenue. In Lanier's words
"I want to create a unique shopping experience by combining the most
innovative retailers in the world with Georgetown's history and charm."
Lanier would like to turn the Georgetown shopping district into a distinctive
shopping area synonymous with the historic character of Georgetown as Newburry
Street is to Boston or Coconut Grove is to Miami.
The Georgetown shopping district consists of many historic townhouses, with
small floor plates, idiosyncratic layouts and limited expansion opportunities.
The area had been a prime shopping district, but in recent years the quality of
stores declined until many stores were occupied by tenants selling gold jewelry
and knick knacks. The Georgetown shopping area lacks almost every retailer
requirement of the 1990s: a controlled environment, extensive free parking, and
flexible space to accommodate a tenant's prototype.
Eastbanc recognized the historic character of Georgetown as an advantage. A
historic neighborhood with funky storefronts could be a terrific destination
shopping area. Eastbanc's vision is to keep the historic structures but to
combine the buildings behind the facades to allow the national tenants to enjoy
cutting edge design details within a functional floor plate. As Lanier puts it,
"if a customer can combine the pleasure of buying a Pottery Barn sofa with
a walk in historic Georgetown why would she want to go to the mall?"
EastBanc needed a critical mass of national retailers to help draw customers
to Eastbanc's end of Georgetown. The retailers needed to appreciate that the
historic surroundings are an advantage and that the renovation of the buildings
and tenant fit-out must play on and enhance the historic surroundings. This
approach made it possible to retain many of the distinctive architectural
features and the historic character of the area.
By drawing national retailers into EastBanc's meticulously renovated historic
properties, these projects have injected life into Georgetown's main shopping
avenues and raised the volume of foot traffic and the quality of available
merchandise. Not only the new, national retailers benefit from this strategy,
but many of Georgetown's long-standing specialty stores are able to increase
their sales from shoppers drawn to Georgetown in lieu of the suburban malls.
A series of hurdles stand in the way of this type of development. EastBanc
has acquired several individual properties, each with its own particular
architectural challenges and historic preservation requirements. These nuances
have to be carefully addressed in each instance. The layouts and protections
national tenants are accustomed to in a traditional shopping mall must be
modified given the urban and historic context of these buildings. During the
lease negotiation, the tenant and developer need to work through many standard
retailer requirements such as parking, exclusive rights, and signage, to fit the
tenant's standard concept into the historic, street-front spaces renovated by
EastBanc. The tenant also trades the controlled environment of the mall for a
community where each retailer relies on its neighbors to uphold their standards.
For example, in a shopping mall the developer and large tenants often impose use
restrictions on the retail project dictating the type of stores permitted to
operate in the mall. In Georgetown, there is no overall authority charged with
regulating the retail environment.
The space EastBanc is leasing in Georgetown has a unique relationship with
the surrounding community, giving each tenant's store a special feel and
providing tenants an opportunity to give their customers a unique shopping
experience. EastBanc's vision has successfully encouraged high-end retail
players such as Pottery Barn, Nine & Co., Sephora and Baker Furniture to
come into the city and trade the strict uniformity of the typical retail
environment for a vibrant community. Through Holland & Knight client Anthony
Lanier's vision, Georgetown is on its way to becoming one of the premier
shopping neighborhoods in the country.
Tara A. Scanlon is an Associate in our Washington, D.C. office and practices
in the real estate group. Ms. Scanlon can be reached at 202-457-7150, or by
e-mail at tscanlon@hklaw.com