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Posted on Fri, Mar. 18, 2011 11:15 AM
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Star Magazine | Local shops, restaurants continue to thrive on Plaza
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The Country Club Plaza enjoys mythic status in Kansas City. Residents take great pride in it, whether they shop there or not.
And like a lot of mythic subjects, a lot of myths swirl around it. Like the often-repeated lament that there are hardly any locally owned businesses left on the Plaza.
Of course, some independents remain in the venerated district. But how many?
Try to guess: Out of 136 retail shops and restaurants leased by Highwoods Properties, which owns and manages the Plaza, how many are locally owned?
a) 6
b) 11
c) 20
d) 52
The correct answer is “d.” Fifty-two.
And that’s not counting out-of-town franchises with local owners, or Helzberg Diamonds, which was founded in Kansas City and is now owned by Warren Buffet’s Berkshire Hathaway Inc.
The number also does not include locally owned businesses in non-Highwoods properties that most people consider to be on the Plaza, including JJ’s and Bo Ling’s restaurants and two businesses inside Unity Temple: Eden Alley restaurant and the Bird Sings gift shop.
One store on the list, the Kansas City Store, is owned by the Star.
If 52 is a lot more than you thought, you are not alone. Many Plaza store owners interviewed for this story estimated the number to be in the 20 to 30 range, and an unscientific survey of four dozen local shoppers at Penguin Court yielded guesses ranging from three to 20, with most in the half-dozen range.
Why are perceptions so skewed?
For one, a locally owned business on the Plaza can look like a lot of different things:
It can be a large, corporate department store, as is the case with Halls.
It can be a 100-year-old Kansas City company in its third generation of family ownership. The Plaza has two of those: Swirk Jewelry and Tivol.
It can be a local owner that bought licensing rights to a name but has independent control over inventory and day-to-day operations, such as Scandia Down fine linens boutique and Coal Vines restaurant.
It can be a decades-old establishment run by the original owners, such as Pinstripes menswear.
Or locals who bought a store from the original local owners without changing the name or the product line significantly, such as Panache Chocolatier.
It can also be a relatively new local business that did well in another part of town and added a Plaza location, such as Blanc Burgers + Bottles.
Another reason could be reverberations from 1998, the year J.C. Nichols Co., which had previously managed the Plaza, was merged into Raleigh-N.C.-based Highwoods. Many people assumed out-of-town owners would not be as interested in retaining local stores as Nichols was.
But the number hasn’t changed significantly since Highwoods rode into town. In 1999, there were 58 locally owned businesses, according to Highwoods records.
Glenn Stephenson, who heads the Kansas City division of Highwoods and worked for the Nichols company for two years before joining Highwoods, has a third explanation for the false impression that local businesses are leaving the shopping district faster than national ones: Bad news travels faster than good. When a local store leaves the Plaza, the media tend to play up the another-one-bites-the-dust angle, he says, but when a local store opens on the Plaza, there is usually no another-one-moves-in angle to the coverage.
And stores closing, whether national or local, is a normal occurrence in any shopping district, Stephenson said.
“It is a turnover business. Fast food and steakhouses last a long time. Other than that, change is the nature of the business,” he said.
And while the mix of local and national businesses has stayed more or less the same under Highwoods’ ownership, Stephenson says “it doesn’t make any difference whatsoever” to Highwoods whether a prospective tenant is local or not.
Highwoods is more interested in having a mix of different types of stores and having stores other area shopping districts don’t have.
“We look at the percentages of types of businesses all the time, and say, ‘We need to add juniors (apparel) or we need to add a restaurant.’ If that happens to be a local store, more power to them,” Stephenson said.
And in fact, there are plenty of examples in the past decade of local companies succeeding where chains failed.
The vegetarian restaurant Eden Alley in the basement of Unity Temple opened in 1994 and has outlasted the former McDonald’s across the street.
Eden Alley chef/owner Sandi Corder-Clootz pays rent to Unity Temple, not Highwoods, but her business has grown steadily to the point she now has a five-year lease with Unity, instead of the 10-percent-of-sales “tithe” arrangement she had in the early years.
Corder-Clootz said it was “pretty weird” seeing McDonald’s leave. “They were always a geographic marker for telling people how to find us,” she said. She thinks her restaurant ended up being better positioned than McDonald’s because of increasing interest in healthy eating and local, fresh ingredients.
Another David-over-Goliath story is local toy store Zoom, which moved onto the Plaza after FAO Schwarz closed.
Since January 2010, twice as many local stores have opened (10) as closed (5) on the Plaza.
The newbies are a mix of shops and eateries: Blanc Burgers + Bottles, Churchill fashion and home décor, Coal Vines restaurant, Cupcake a la Mode (opening soon), DermaDoctor skin care, For-tu-ity gifts, Ingredient restaurant, Peruvian Connection + Prize fashion and antiques, Rally House Kansas City fan gear and Zócalo restaurant (opening soon).
Local store openings outpaced national store openings (nine) in the same period.
Zoom owner John Middlekamp wasn’t surprised FAO Schwartz didn’t make it.
“Locals didn’t shop there because it was overpriced,” Middlekamp says.
Tourists, who make up 40 percent to 45 percent of Plaza shoppers according to Highwoods, will pay a premium for national brand names. But for any Plaza business to survive it needs local customers as well.
And when it comes to attracting local customers, Middlekamp believes local shops enjoy an advantage.
“What an independent can do that a large chain can’t is react immediately to trends and what is selling. I can reorder the next day,” he said.
Like Middlekamp, Ursula Terrasi, owner of Scandia Down, believes independents, far from being the poor stepchildren, have a stronger hand to play than chains.
“I can listen to customers and make a decision on a dime,” Terrasi said. “I don’t have to go through corporate. I don’t have to go through committees. I think it’s a competitive advantage.”
When the economy tanks, locals can also benefit from longstanding relationships with customers that national chains don’t have to fall back on, says Brian Swirk, owner of Swirk Jewelry.
“We are jewelers, not sales people. Our customers come here for everything from appraisals to cleaning to design, and they stay with us because of that level of service,” Swirk said.
Also, locals are not as plagued as chains by hasty purchases that later get returned. “We have zero returns after the holidays,” Swirk said of his store.
Barbara Bailey, owner of Panache Chocolatier, has noticed that out-of-towners seem to have a better overview of the longstanding locally owned Plaza shops than Kansas Citians do.
“People come in from Iowa and other places and say, ‘I got this same cookie or this chocolate Coke 20 years ago,’ but I hear people from here say, ‘Oh my gosh, all the locals have moved out,’” Bailey said.
Trent Slusher and Jack Ring, co-owners of Pinstripes, opened their first men’s clothing store on the Plaza in 1976. In 35 years on the Plaza, Slusher and Ring have weathered the flood of 1977, a radical upheaval in the ’80s, when shopping changed from being about necessity to being a hobby, prompting the rise of mass “luxury” brands such as Burberry, and the recession of the past three years.
This year, Slusher can see the light at the end of the tunnel. “People deferred so many purchases over the last three years that shopping is shifting back to a necessity,” he said.
Only financially sound, well-managed businesses can survive the blows of a rough economic downturn, Stephenson says. “We’re not into incubating. If you come to me with a great idea for a business, we’re probably going to advise you to start on the perimeter somewhere and see how that goes,” Stephenson said.
Sometimes, locals forget that even under Nichols, the Plaza was constantly evolving, says Scott Lane, president of Historic Kansas City Foundation. It has not always had the upscale image it has today.
In the 1960s and ’70s, the district’s mix of shops ran from luxury to dime stores. There were Swanson’s and Harzfeld’s but also Sears, Woolworth’s and a bowling alley, Lane says.
And if you ask old-timers about Plaza dining, they are as likely to mention Putsch’s Cafeteria as the Plaza III.
At least one new local restaurant is trying to get some value-conscious customers back. Coal Vines, owned by UMKC grad Bret Springs and KU grad Zach Marten, is a casual pizza and wine concept that originated in Dallas, but it is not a franchise. Springs and Marten purchased licensing rights to the name but have control over the menu and wine list. They are betting that a strategy of value wines and low average table checks can pull in suburbanites who want an elegant setting but affordable prices.
On top of that, Springs thinks local owners who are in the dining room every day enjoy a competitive advantage.
“Our clientele are people who want to see the owners in the restaurant,” Springs said.
Middlekamp of Zoom believes independent stores, regardless of the income level of their clientele, give the Plaza a character that sets it apart from other shopping districts in Kansas City and elsewhere.
“Independents on the Plaza range from Tivol to Topsy’s and that’s what makes it special,” he said.
Lane of Historic Kansas City Foundation has fought Highwoods on the Polsinelli-Shughart office building, but he says the company cannot be faulted for trying to get the most successful tenants it can.
“Shopping is evolving. The Internet is changing everything. It’s a tough problem, and the next generation of developers is going to have to figure it out or we’re going to have a lot of Metcalf Souths on our hands,” Lane said, referring to the once-thriving and now mostly empty mall in Overland Park.
The Plaza is the geographic and emotional center of Kansas City, Lane says, and he thinks having stores that attract shoppers to the district is more important than wooing local stores.
“The Plaza needs to continue to be the golden egg for the goose of Kansas City.”
To reach Cindy Hoedel, call 816-234-4304 or send email to choedel@kcstar.com. Follow her on Twitter at Twitter.com/choedel.
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