Stephanie Wilson must decide where to open a ready-to-wear boutique she’s been contem- plating for several years. Now in her late 30s, she’s been working in municipal government ever since leaving college, where she majored in fine arts. She’s divorced with two children (ages five and eight) and wants her own busi- ness, at least partly to be able to spend more time with her children. She loves fashion, feels she has a flair for it, and has taken evening courses in fashion design and retail manage- ment, Recently, she heard about a plan to re- habilitate an old arcade building in the down- ‘town section of her midwestern city. This news “crystallized her resolve to move now. She’s considering three locations. THE DOWNTOWN ARCADE The city’s central business district has been ail- ‘ing for some time. The proposed arcade reno- ation is part of a master redevelopment plan, with a new department store and several office ‘buildings already operating. Completion of the tire master plan is expected to take another ix years. Dating from 1912, the arcade building was once the center of downtown trade, but it’s en vacant for the past 15 years. The proposed ovation includes a three-level shopping fa- ility, low-rate garage with validated parking, \d convention center complex. Forty shops planned for the first (ground) floor, 28 more the second, and a series of restaurants on the lird. The location Stephanie is considering is 900 are feet and situated near the main ground- joor entrance. Rent is $20 per square foot, ran annual total of $18,000. If sales exceed. §225,000, rent will be calculated at 8 percent ifsales, She’ll have .o sign a three-year lease. 693 Cases CASE 13 Choosing a Store Loca lami Ly TENDERLOIN VILLAGE The gentrified urban area of the city where Stephanie lives is called Tenderloin Village because of its lurid past. Today, however, the neat, well-kept brownstones and comfortable neighborhood make it feel like a trendy enclave. Many residents have done the remodeling work themselves and take great pride in their neighborhood. About 20 small retailers are now in an area of the village adjacent to the convention center complex, along with some vegetarian and nou- veau cuisine restaurants. There are also three small women’s specialty clothing stores. The site available to Stephanie is on the vil- lage’s main street on the ground floor of an old house. Its space is also about 900 square feet. Rent is $15,000 annually, with no extra charge based on the level of sales. The landlord knows Stephanie and will require a two-year lease. APPLETREE MALL This suburban mall has been open for eight years. A successful regional center, it has three department stores and 100 smaller shops just off a major interstate highway about & miles from downtown. Of its nine women’s clothing retailers, three are in a price category consider- ably higher than what Stephanie has in mind. Appletree has captured the retail business in the city’s southwest quadrant, although growth in that sector has slowed in the past year. Nev- ertheless, mall sales are still running 12 percent ahead of the previous year. Stephanie learned of plans to develop a second shopping cen- ter east of town, which would be about the same size and character as Appletree Mall. But groundbreaking is still 18 months away, and no renting agent has begun to enlist tenants.694 — Retailing Management The location available to Stephanie in Ap- pletree is two doors from the local department store chain. At 1,200 square feet, it’s slightly larger than the other two possibilities. But it’s long and narrow—24 feet in front by 50 feet deep. Rent is $24 per square foot ($28,800 annually). In addition, on sales that exceed $411,500, rent is 8 percent of sales. There’s an additional charge of 1 percent of sales to cover common-area maintenance and mall promo- tions. The mall’s five-year lease includes an escape clause if sales don’t reach $411,500 after two years.