Monday, November 27, 2000

Nordstrom buzz turns to sting




By Ken Alltucker
The Cincinnati Enquirer

        Downtown Cincinnati may be looking merry, with Christmas carolers, large crowds and Fountain Square decorations. But the trappings are not hiding the disappointment of many downtown merchants. They're still stinging from Wednesday's news that an intense, three-year pursuit of Nordstrom has gone bust.

        The glitzy Seattle chain, besieged with financial problems, alerted city leaders it was pulling out of its plan to build a store at the prominent — and cleared — Fifth and Race streets site.

        Shop owners predicted Nordstrom would have validated the city's effort to build a vibrant retail district from Fountain Square to Fourth Street.

        No Nordstrom, however, means very little optimism among many merchants.

        “It was a bit of a surprise. I thought it was in the bag,” said David Smith, general manager of Lazarus' department store at Fountain Place.

        One block from the proposed Nordstrom store — where construction trucks Friday busily prepared to pave over a big dirt hole for surface parking — Chong Kim said the city's inability to land another anchor store will hurt smaller retailers like himself.

        “If Nordstrom is not coming, that's bad,” said Mr. Kim, who operates an urban retail and jewelry store at 618 Race St. “Downtown retailing is no good.”

        During his 22 years of selling goods downtown, Mr. Kim has seen streets once bustling with shoppers replaced with fewer and fewer people. Meanwhile, suburban shopping meccas — Kenwood Towne Centre and Tri-County Mall — have thrived.

        It's a trend city leaders hoped to reverse by piecing together a $48.7 million incentives package to get Nordstrom to build an upscale store. It would punctuate other retail successes such as landing Saks Fifth Avenue, Tiffany & Co. and Lazarus.

        But Nordstrom, which has built a reputation for stellar market research, decided wealthy Deerfield Township in suburban Warren County is a better bet for a new store than downtown — despite the city's incentives.

        Nordstrom did not explain why it is bailing out, other than a one-page news release that also said it intends to kill a project planned for downtown Pittsburgh. Clearly, the company's internal turmoil contributed to the decision.

        In September, Nordstrom announced its chairman and chief executive officer resigned and was replaced by family members Blake and Bruce Nordstrom. The company's chief financial officer also was ousted.
       

No alternative in sight

               Nordstrom's about-face in Cincinnati not only stunned those trying to revitalize downtown — it left them with no obvious options.

        “We were very focused on Nordstrom, but they are going through some changes,” said David Ginsburg, vice president of Downtown Cincinnati Inc., the downtown advocacy group. “Obviously, we're disappointed. There isn't an obvious plan B for that location.”

        The immediate reaction of city leaders was to order crews to fill the hole and pave for a parking lot, essentially buying time until they can come up with a real plan.

        Returning people downtown was the goal of the city and Hamilton County when it committed $1.2 billion to built two professional sports stadiums and a reconstructed Fort Washington Way along the riverfront.

        They hope money from private investors will follow the substantial public investment.

        Not all downtown merchants have confidence the city will pull it off.

        Take Michael Gilbert, owner of Dodd Jewelers. He was forced to move his family-owned business from Race Street to West Fourth Street in connection with the Nordstrom deal.

        He feels the move was wasted because the city failed to land Nordstrom.
       

Lingering resentment
               “I resent the city for what they've done,” said Mr. Gilbert, who thinks his move cost him customers. “It's taken a little while to get adjusted here.”

        Now Mr. Gilbert, a small business owner, is struggling to make ends meet. Debt-free at his Race Street store, Mr. Gilbert had to borrow $140,000 to move.

        “If you're a business owner, you have to have a back-up plan,” Mr. Gilbert said. “Where's the city's back-up plan?”

        Wanted: Ideas for gaping hole



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