Downtown Lancaster is currently experiencing a growth spurt in terms of businesses starting or moving to the area. This growth is in part fueled by the arts, which has helped downtown Lancaster retailers see a boom in business. Retailers see a tremendous amount of traffic due to the popularity of Lancaster's First Friday events. Downtown Lancaster has established itself as a trendy place to shop for unique and stylish products, such as eco-friendly bicycles, organic food, gourmet chocolates and vinyl records. For some business owners or entrepreneurs starting a new business, the image that Downtown Lancaster has created presents a great opportunity for growth in a slumping economy.
If you are considering a downtown location for your business you should consider a variety of factors before making a decision.
- First, create a business plan with Downtown Lancaster as your location. What type of customers do you serve or plan on serving? Are they the type of customers who will frequent Downtown Lancaster? Will transportation be an issue for these type of customers? Visit the shops in Downtown Lancaster and see if your product or service fits in with other retailers and offers similarly unique and stylish qualities as other shops.
- Second, how will rent compare to where you are currently operating or other areas where you would consider operating? Base rent should not be the only types of comparison. If you're communicating with a broker, ask for a draft of the lease. Is the lease gross or net? A basic gross lease only includes base rent, while a standard net lease includes operating expenses and real estate taxes. In addition, some landlords (such as those in shopping centers) will charge a percentage of net income as additional rent. You may find that provisions of a lease for a downtown location are more ideal for a start-up business.
- Finally, if you're considering moving downtown you should attend First Fridays, if you haven't been attending already. First Fridays are immensely popular and it's important to understand what you're getting into. These events are a great opportunity for businesses to funnel traffic into their spaces and familiarize potential customers with their products and services.
Also, be sure to consider the long term future of your business. Commercial leases are generally for periods of about five years with automatic renewal provisions. The location of your business is not a decision to be made without consideration of where your business will be in five or more years. A recent LancasterOnline article provides a beneficial discussion about the future of downtown Lancaster, including a description of plans for Downtown Lancaster in the next 6 years. This would provide valuable information to someone who is looking to enter into a lease within the next year.
Everyone is familiar with the phrase "location, location, location." Consider for example whether your location is benefiting from the equivalent of a strong anchor store, which is common in malls and shopping centers. Although a true anchor store is lacking in Downtown Lancaster, being close to an established business provides the same benefit that anchor stores bring to shopping centers. In addition, construction of Clipper Stadium and the Lancaster County Convention Center now draw thousands of people to downtown Lancaster on a regular basis. Not to mention Central Market has been a destination for city and county residents for over 275 years.
Although Downtown Lancaster is on the upswing and provides an exciting opportunity for local businesses, there are pros and cons to committing to a downtown location just like any other location. However, it is prudent to weigh the pros and cons of several locations before deciding where to locate your business. If you feel that a downtown location is an option for your business, here are some additional links that will aid you in the decision making process.
Helpful Downtown Lancaster Business Resources:
- James Street Improvement District
- James Street Improvement: Development Map
- Lancaster Arts
- Downtown Lancaster
- Fig Lancaster
Derek Dissinger is a lawyer at Russell, Krafft & Gruber, LLP. He received his law degree from Duquesne University School of Law and practices in a variety of areas including Business Law and Commercial Real Estate.