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 Newbury 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.