The 'Unchained Borough': Regulating Formula Businesses
Feb 25, 2016
In our quest to keep Charleston a unique place with extraordinary quality of life and to build community wealth by supporting local independent businesses, we’ve come across some impactful tools being utilized in other communities. One of those tools allows communities to create a checks and balances process on development of new “formula” businesses (a.k.a. chain stores).
Building on the precedent of similar ordinances in more than 20 communities across the country, we’ve proposed a first-of-its-kind for the Charleston area – a formula business ordinance known as the ‘Formula Business District,’ which we’re working to pilot in the Cannonborough-Elliotborough neighborhood business district with community support.
What is the Formula Business District proposal?
The proposal is a new form of zoning overlay district, which would require formula businesses which meet certain criteria to obtain a special exception permit, to allow the community an opportunity to weigh in on whether they would like that particular formula business in their neighborhood. This provides a checks and balance process, so we can be proactive in cultivating a unique mix of businesses that makes Cannonborough-Elliotborough vibrant.
The purpose of the Formula Business District is to regulate the location and operation of Formula Business Establishments in order to maintain the unique character, diversity and economic vitality of the Cannonborough-Elliotborough neighborhood business district through the ‘Formula Business District’ zoning overlay. The Independent Business District is intended to preserve and enhance the vitality, economic health and unique character of a business district through the regulation of chain or “formula” businesses. The unregulated proliferation of Formula Business Establishments would adversely impact the city’s goal of maintaining a unique and diverse business base, and limit opportunities for small and local businesses.
The proposed ordinance requires that Formula Business Establishments (as defined below) must obtain a special exception in order to foster a more vibrant commercial sector that is both aesthetically and economically diverse.
DEFINITION: A “Formula Business” is defined as a sales activity establishment which is: 1) required by contractual or other arrangement to maintain two or more of the following: standardized (“formula”) array of services and/or merchandise, trademark or service mark, décor, color scheme, façade design, employee uniforms, signage, name, or similar standardized features, and 2) which causes it to be substantially identical to ten or more existing business establishments anywhere in the world at the time of application.
Located in downtown peninsular Charleston, the proposed geographic boundaries for the pilot Cannonborough-Elliotborough Formula Business District district are: President Street to the west; Bee Street and Morris Street to the south; St. Philip Street to the east; and the Septima Clark Parkway/Crosstown to the north. Both sides of the aforementioned streets are included in the district.
We envision the ordinance to apply for the following business types:
- Liquor store
- Food and beverage
- Retail establishment
- Specialty food or grocery
- Personal service (Ex: salon)
- Bank or financial services
If a business qualifies as a Formula Business, the business will apply for a special exception at the City of Charleston Board of Zoning Appeals meeting, which provides an opportunity for the community to weigh in at a public hearing.
Special Exception Required. If the number of worldwide locations is ten (10) or more and if the number of total standardized features of this business is two (2) or more, then the proposed use is a Formula Business Establishment, and a special exception shall be required within the ‘Formula Business Use’ Overlay.
What are the benefits? According to the Institute of Local Self Reliance, which studies formula business policies in communities across the country:
- Preserving the unique character of the neighborhood.
- Leveling the playing field for local business owners.
- Locally owned businesses build strong communities – the shift from local to absentee-owned stores means that business decisions are no longer made locally by members of the community.
- Chain stores often cost taxpayers in incentives and subsidies.
- Economic Impact – local independent businesses return 2 to 4 times more revenue back in to the local economy than national chains.
- Jobs – every $1 million in consumer spending that flows to independent businesses instead of chains generates about twice as many local jobs.
The Cannonborough-Elliotborough Neighborhood Association voted unanimously in support of the Formula Business District pilot at their February 16th, 2016 meeting. Lowcountry Local First is currently working to move the pilot project forward, and potentially expand the Formula Business District to other neighborhood business districts in the Charleston metro area.
For more information or to access the Draft proposal, please contact Lauren Gellatly, Community Development Director at Lowcountry Local First at firstname.lastname@example.org.