Dusseldorf The entrepreneur Ingo Müller-Dormann confidently calls himself the “punk in the fashion industry”. For years he had brought punk bands from Great Britain and the USA on tour to Germany, now he sells changing collections by young European fashion designers in pop-up stores.
He has also had a shop in downtown Bremen since the beginning of October. Every Saturday designers are guests there, present their fashion in person in a live show to customers and talk about their work.
It is no coincidence that this innovative shopping concept came to Bremen of all places. Because the city attracts concept and pop-up stores to the city center with a regular competition. To this end, the city rents vacant space in the city. Dealers who convince with their ideas then get them rent-free for one year.
A large number of shops dying out is leaving many German city centers deserted, and the IFH retail research institute is expecting 80,000 shops to close in the next few years. But while many municipalities are watching this disaster helplessly, more and more cities are tackling it with good ideas.
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15 cities, including Bremen, now want to go one step further and, together with the IFH, develop a digital platform for proactive settlement management in a pilot project. “We want to create a kind of Tinder for inner-city real estate,” says Eva Stüber, member of the IFH management.
Data from Excel lists can only be used to a limited extent
“The point is to be able to react more quickly to impending vacancies with the help of digital tools and data and to find a suitable user for them,” says Kristina Vogt, Bremen’s Senator for Economics, the Handelsblatt. “Almost all cities are facing the challenge of repositioning themselves and, above all, taking greater account of developments in the field of digitization,” she emphasizes. The increasing vacancy, which is being accelerated by Corona, is the reason to go new ways.
The aim of the “City Laboratories” project is to network the municipalities with landlords, dealers and other interested parties and to facilitate the exchange of data. In a first step, it is important to get an overview: What is the stock of retail formats and where is there vacancy? Only then is real settlement management even possible.
The problem: “If this data is available, it is usually in Excel lists today,” says retail expert Stüber. This means that they can only be used to a limited extent. “We are building a digital platform and thus creating new standards,” said Stüber.
“You can’t just watch, the city has to have the courage to take on a more active role,” says Stefan Krappa, project manager for downtown development and vacancy management at the City of Lübeck’s Economic Development Agency. “We share the challenge of repairing inner cities,” he says.
Lübeck has been monitoring for years, recording once a year what vacancies there are and what has disappeared in retail. But Krappa hopes for a whole new quality from participating in the pilot project for the digital platform. Because only then is the permanent exchange with landlords and dealers possible.
Around 15 percent of the retail space is empty
“It is crucial to enter into a close dialogue with the property owners early on,” explains Krappa, the business developer. “We need an early warning system that alerts us in good time before it becomes vacant.” In Lübeck, too, despite all efforts, 15 percent of the retail space in the city center is empty. In addition, the closure of the Karstadt Sports House hit the city hard.
Those responsible in the municipalities also know their limits when it comes to settlement management. “Ultimately, it is always private companies that decide whether rental contracts are concluded and what the rents are and the length of the terms. And in most cases that is a good thing, ”says the Bremen Senator for Economic Affairs, Vogt. “However, our business development department can bring together different interests and provide high quality support for such a process,” she adds.
In order to be able to intervene more actively, a number of cities have now issued a right of first refusal statute, which obliges property owners to offer the building to the city before selling it. Claus Kaminsky, Lord Mayor of Hanau, for example, uses this very specifically as an instrument to control the settlement of dealers.
“We need to know: who owns the city center?” He explains. The owners are partly scattered around the world, they are more interested in whether they receive their income from rent every month than what actually happens in Hanau. “The rights from the statutes bring us into conversation with many owners for the first time.”
The result is usually not a takeover by the city, but a compromise. “The owners have to realize that the value of their property also depends on how attractive the city center as a whole is,” hopes Kaminsky. And original shops are also more conducive to this than the tenth mobile phone shop.
Pop-up stores prevent temporary vacancies
A department store for regional art, the Tacheles, was able to temporarily move into an abandoned shoe shop on Nürnberger Straße in Hanau. The house owner waived part of the rent, the city became a tenant, and Tacheles, as a subtenant, pays ten percent of the sales proceeds to the city. A second-hand shop based on the same model has opened diagonally across the street that was previously only active online.
Kaminsky sees the city in the role of a “nomad”, as he calls it, who organizes temporary use and thus also prevents possible vacancies. “If there is another sensible use for the store, we will move on.”
The need for such support is great. “We are seeing a decline in owner-managed specialist shops that began long before Corona,” reports Frank Mentrup, Lord Mayor of Karlsruhe. “But today there are significantly more spaces vacant than we knew before Corona – and not only in the dirty corners, but also in the good locations.”
The city of Karlsruhe has therefore declared certain areas of the city center to be redevelopment areas. “This gives us the opportunity to ban sales contracts for real estate if the prices are obviously speculative,” explains Mentrup.
The city also has a right of first refusal if the owner does not meet the advertised redevelopment goals of the area. For example, it is stipulated there that there are no new one-euro shops or gambling halls. “If a buyer also commits to the renovation goals, we have already achieved a lot,” says Mentrup.
Corona crisis makes property owners more willing to talk
What Mentrup is also observing: The corona crisis has made many owners and dealers more cooperative. No real estate owner can be sure that he will quickly rent his shop again for a high rent. “That is why many are now much more willing to talk to us and develop ideas together about which rental uses also serve the long-term development of the quarter and not just their own short-term return,” said Mentrup.
IFH expert Stüber is convinced that the planned digital platform can support the municipalities. “The municipalities have to enter into a permanent and intensive dialogue with the real estate industry,” she says. In terms of logic, it is a bit like a shopping center administration, but for the entire city center. The locations would be controlled centrally and based on data.
“In the second step, the locations are supplemented with additional data such as pedestrian frequencies, available parking spaces, charging stations or the like,” explains the retail expert. The aim is “that the subject of the inner city can be strategically considered”.
It is also clear to her that the conditions in many municipalities are not yet the best for this. “Some started very early to actively counter vacancies, others are still at the very beginning,” she observes. The city laboratories project offers another advantage: “It also creates a network of cities for the exchange of knowledge.”
“In times of crisis, it is all the more important for us to join forces with others who are just as happy as we are and develop solutions out of the crisis together,” emphasizes the Bremen Senator for Economic Affairs, Vogt. Exchanging ideas saves time and money and generates ideas, as Hanau’s mayor Kaminsky recognized. “We don’t have to make the mistakes that others have already made.”
More: “Fashion boxes” and check-in in the multi-storey car park: these ideas are intended to save inner cities