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11/25/2018 10:33:00 AM
CHAIN REACTION: Standardized businesses taking up more downtown Bloomington space
A Noodles & Co. restaurant is housed in the former Von Lee movie theater on Kirkwood Avenue, but the building retains its historic facade. Herald-Times file photo
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A Noodles & Co. restaurant is housed in the former Von Lee movie theater on Kirkwood Avenue, but the building retains its historic facade. Herald-Times file photo

Kurt Christian, Herald-Times

A growing percentage of businesses on East Kirkwood Avenue and around the downtown’s courthouse square qualify as a standardized business, meaning they’re either a chain or a local business caught in a trap meant for much bigger fish.

Former Mayor Mark Kruzan has wanted to preserve Bloomington’s small-town feel by regulating the number of chain businesses in the downtown since the mid-1980s, when a McDonald’s opened on Kirkwood Avenue, the city’s most iconic street. Opponents to his high standard of review called Kruzan’s proposed restrictions an outright ban and argued that the city should let the market decide what type of businesses could open where.

Since Kruzan first proposed his review in 2009, his idea of a standardized business ordinance has been whittled down from a multi-faceted litmus test to a single, design-based standard.

Nearly a decade later, the number of businesses on Kirkwood and the square that qualify for the standardized designation has grown by 10 percent.

“This issue was completely foreseeable, and so is the fact that it’s only going to get worse,” Kruzan said recently. “What’s on the books today is watered down, to me, meaningless.”

Today’s standardized business ordinance applies to businesses with more than one location that are looking to open within the University Village Overlay and the Courthouse Square Overlay. Those downtown overlays stretch from Indiana Avenue to Washington Street between Third and Sixth streets, and from Washington to Morton Street between Fourth and Seventh streets.

Businesses with multiple locations that are held to standardized services, merchandise, menus, employee uniforms, trademarks, logos, signs or exterior design have to be reviewed by the city’s Board of Zoning Appeals and pay $250 to get a conditional use variance before they can operate. Considerations proposed by Kruzan in 2014 regarding the balance of local and national businesses in a given area are not a part of today’s review process.

Recently, two chains were given the necessary approvals to locate side-by-side on Kirkwood. Five Guys Burgers and Fries was approved in March to open at 425 E. Kirkwood Ave. That space was most recently a temporary location for Bloomington Bagel Company, and before that, a Panda Express. Goodfella’s Pizzeria, a Kentucky-based chain selling New York-style pizza by the slice, was also approved earlier this month for the space at 427 E. Kirkwood Ave. Previously, that space was used by BlueTique, a fashion store with locations in Kentucky and Tennessee.

In 2009, The Herald-Times identified about 80 local and 20 chains on the square and Kirkwood between Indiana Avenue and the B-Line Trail. An informal census conducted last week showed about 18 of the nearly 45 businesses along East Kirkwood Avenue meet the criteria of a standardized business. Today’s courthouse square has about 28 nonstandardized businesses, and four businesses that could be considered standardized. Though the review was relegated to the courthouse square and Kirkwood Avenue, several other chains such as Dagwood’s and Brother’s Bar and Grill exist in other parts of the applicable downtown overlays.

Some are easily identifiable as chain or corporate businesses, like Urban Outfitters or Chico’s, while others are less obvious. Businesses with multiple locations that are clearly local, such as Bloomington Bagel Company, are considered standardized and lumped into the same review process as Starbucks or other major chains. The wide net already cast by the current standardized business ordinance is one reason why Erin Predmore, president and CEO of the Greater Bloomington Chamber of Commerce, is not looking for a more restrictive ordinance.

“We want the ordinance and the expectations of government to be clear and transparent so that business people are able to go in with their eyes open, knowing what they’re getting into,” Predmore said. “The Chamber really cares a lot about the diversity of businesses and allowing the actual business environment to balance itself according to the economics of the situation.”

Kruzan, however, sticks by the views he held as mayor. He said climbing property values and downtown commercial rent have made it difficult for small businesses with little startup capital to afford locating downtown. Kruzan also credited a shift in the demographics of Indiana University students as a catalyst for change. It’s a theory supported by the fact that, the closer one gets to the university’s Sample Gates, the more chain businesses there are.

He sees increased government intervention as an extension of the sort of regulations that are already in place.

“We have a whole system on tax incentives and tax breaks and planning and zoning regulations, all sorts of decisions made through public policies and practices that impact costs and density and height requirements,” Kruzan said. “If we’re going to make the argument that this restriction of standardized businesses should not exist because we should not work against free market principles, then we should remove all policies and principles that affect the free market.”

Predmore sees the 10 percent increase in standardized businesses on Kirkwood and the square as a slight shift, one the free market will likely re-balance given the downtown’s local flavor and maintained vitality. Even if there is an increasing number of chains in the downtown, Predmore said they are valuable contributors to Bloomington that create jobs and pay taxes. Restrictions designed to combat a rise in standardized businesses could create additional downtown commercial vacancies or dissuade Bloomington businesses from opening new locations elsewhere, she said.

“The businesses we’re talking about are smart and plugged in and making decisions every day about what’s best for their business,” Predmore said. “Those small, local businesses are the ones that really make the courthouse square colorful and interesting. That’s what we want. We don’t want to penalize them for opening a second location. Artificially reducing space or eligibility just ends up being extra restrictions.”

Despite his desire for a stricter review, Kruzan said he’s not anti-chain. He said he would’ve supported CVS Pharmacy locating on Kirkwood because it fulfilled a specific need.

“The goal was simple; it was to safeguard community character. I was simply asking the community to ask itself the question, ‘What are we doing to ourselves?’ I have no problem with trying to make sure we protect the community and the integrity of the community’s identity, to the benefit of economic development,” Kruzan said. “More isn’t better, in my opinion. Better is better.”

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