The End of Greenfield Sprawl One Parking Lot at a Time

The National Trust for Historic Preservation recently picked up on a story in the Atlanta Journal-Constitution that featured the orange giant, Home Depot, and their effort to make better use of their property. Home Depot, as many people know, is one of the nation's largest home improvement warehouse with stores approximately 130,000 square feet on lots that average 12-14 acres, most of which are underutilized parking lots. It turns out that Home Depot officials are looking at these grayfields - cleared, graded, and paved areas - as opportunities for new revenue. As it was reported,

“A number of stores have barren asphalt, and it’s not in anyone’s best interest to leave it sitting there,” said Mike LaFerle, Home Depot’s vice president of real estate.

So the Atlanta-based chain has a new strategy: Sell chunks of its parking lots to fast food chains, pet stores or auto parts outlets.

Home Depot has identified marketable portions of lots at hundreds of stores — including about 25 of Georgia’s 90 stores, according to a list the company handed out to potential buyers and brokers at a recent meeting of the International Council of Shopping Centers in Atlanta.

With the diminishing desire to return to the over-leveraged, land-consumptive period (pre-2008) that was typified by massive retail expansion of national brands both big and small, Home Depot's real estate office is now coming to a new level of awareness. All of these parking lots, often built to excessive local zoning standards, even by shopping center industry standards are now primed to receive the next wave of growth. To do this will take two key ingredients.

First, local governments need to radically reduce their parking requirements. Far too often I open a zoning ordinance that requires parking spaces at a rate of 5 cars or more for every 1000 square feet of retail space. And for shopping centers, these ordinances often require that every store in a center be able to comply independently of each other with no permission for shared parking arrangements. The International Council of Shopping Centers (ICSC) has regularly surveyed their members and found that the actual need for many of these so-called "power centers" is actually between 4 and 4.5 parking spaces per 1000 square feet of retail space - nearly 20% less than many local government requirements.

In the face of this evidence, why do many local governments still cling to excessive standards? The answer is likely just simple apathy. Many zoning ordinances are based on national model codes or whatever the next town over just adopted. And unfortunately, too many of these standards are never researched properly. So not only are many communities requiring the unnecessary installation of parking spaces, they are complicit with the environmental degradation that these parking spaces bring. Increased heat island effect, increased storm water runoff and not to mention the deforestation required to mass grade accessible parking spaces.

But even if local governments all wake up tomorrow and lower these artificially high standards, or perhaps even did away with all parking standards altogether and let the market decide what they need, we would still have another hurdle. These parking areas are still private property and are often encumbered with legal easements that preclude their use for anything other than unused black asphalt. As someone who has been advocating for redevelopment of these grayfields for more than a decade, it is heartening to see a retailer waking up and seeing these areas are potential redevelopment assets.

In fact, I suspect that if we were to add up all of the currently underutilized properties in each of our communities that we may have little need to develop commercial property in the greenfields. When we add up all of the excess parking lots with the now-closed malls, big box stores, and auto dealerships, the amount of potentially available property is staggering. (Hint to any graduate students in need of a thesis project - we need a good GIS inventory!)

Now some will argue that the continued parcelization of these sites for additional auto-oriented stores still is a step a backward. Perhaps. But isn't it a step forward for these large landowners to consider that maybe, just maybe, that there is a better use for their property. Even if it is simply a better economic return, that will help both the property owner as well as the local government. And once they get beyond the hurdle of making that property available, it is incumbent upon the local government and our DOTs to do a better job at creating more walkable, urban corridors. Because unless the characteristics of the fronting thoroughfare are radically changed, don't expect the development on the private side to be much different.

Without a doubt, property owners are looking these days on how to better maximize returns on their investments. It's too early to tell whether this will represent a sea change or simply an isolated experiment but every owner would be neglilgent if they didn't consider it. The results could benefit the financial bottom line and the environmental bottom line as well.