Chain Store Law Is Booed and Lauded

Will it protect small businesses or hurt them?

A hearing last Thursday night before the East Hampton Town Board on a proposed law that would subject chain stores seeking to open to additional planning board review drew speakers both for and against the idea.

Several speakers repeated calls for the town to complete a study of the local economy and business needs before making decisions on amendments to the zoning code such as the one under discussion.

The law would define what it calls “formula stores” as those that are among 15 or more in the country, which have two or more of five listed features, such as a standardized decor, menu, or merchandise.

They would be allowed in central business areas as well as waterfront and neighborhood business zones by special permit from the planning board, but could not “project a visual appearance consistent” with that of affiliated stores in other towns. 

Limits on gross floor area and square footage in an original draft law have been dropped, as has a prohibition against formula stores in historic districts or within a half mile of a historic landmark. Permits could be issued for locations in historic zones if the planning board determined that the plans “comply with the preservation goals” of the district.

“Formula stores are not necessarily bad,” said Susan Borgida, the owner of the UPS stores in East Hampton and Sag Harbor, at the hearing. “They can provide needed services to the community at an affordable price, and can blend in,” she said. “As business owners, we have a stake in the future of the Town of East Hampton.” She said she had gathered several hundred signatures on a petition against the formula store law, which she said has “very subjective criteria.”

“This unfairly discriminates against the small business community,” she said, to applause.

“We feel there should not be a prohibition in any zone,” said Margaret Turner, the executive director of the East Hampton Business Alliance. “There are many formula stores that offer needed affordable services.”

“We fully support and understand the need to preserve the unique character of East Hampton,” she said, but by requiring special permit approval from the planning board, “these decisions can become very arbitrary.” The proposed law, she said, is “too far-reaching.” She suggested instead that the town board fine-tune the zoning code to make better distinctions about what type of uses are allowed where, and look at the criteria that trigger site plan reviews when a use changes, which can be key to protecting against problematic development.

Ms. Turner said there is an “urgent need” for the town to complete a business-needs study, which was called for in the 2005 comprehensive plan. Zoning code changes affecting businesses, she and other speakers said, should be based on clear data and decisions about “what businesses should the town be encouraging, and where should they be.”

Laurie Wiltshire, a land planner, agreed. She named a list of existing businesses that would be considered pre-existing, nonconforming formula stores under the proposed law. The town also needs to study the issue of pre-existing sites that no longer comply with updated codes, the limits applied to them, and their challenges, she said.

Curbing formula stores, Ms. Wiltshire said, could be a “huge financial burden” to the owners of commercial properties whose potential tenants would be limited. She suggested review solely by the architectural review board. “Make sure it looks nice; that’s really all we care about. Retail is retail.”

A provision of the proposed law that would allow only one formula store per building or lot is “illegal and wrong,” said Philip Young, an owner of the Wainscott Village shopping center. Although his complex is approved for multiple businesses, with one formula store already there, he would be unable to rent to another. “That naturally brings down the value” of his real estate, he said.

“It is important that East Hampton does keep its rural character, but we now live in a world that has a global society,” said Stanley Redlus. Startup costs for a business are cost-prohibitive for “mom-and-pop” shops, he said. That’s why, said Mr. Redlus, franchises, or formula stores, work.

“Putting the extra burden on the formula stores, gives a leg up to mom-and-pops,” assisting “independent entrepreneurship” versus those with corporate backing, Katy Casey said. “Allowing formula stores to come in without some kind of control over the appearance, the use, the traffic, would be a mistake,” she said.

Job Potter, a former town board member and a member of the planning board, was applauded when he spoke of a worldwide “overwhelming trend toward standardization and domination of small businesses by large corporations.”

“The often-unrecognized result is a great loss of local character and opportunity for private individuals to create and succeed with small businesses,” he said at the hearing and in a letter submitted to the board. “This change in our culture has profoundly affected farmers and fishermen, small real estate companies, bookstores, and many other businesses struggling to compete. It is increasingly difficult to earn a living without working for someone else, or more accurately, something else, a corporation.”

“I think that’s a utopia point of view,” responded Bonnie Krupinski, a business owner. “It would be wonderful, but I don’t think it’s practical.” She also supported a business-needs study, rather than making “rules when we really don’t know where we’re going.”

Michael Cinque, the owner of an Amagansett liquor store, agreed and said that he had also circulated a petition and collected signatures against the legislation. He said it would make it harder to do business “in an already difficult seasonal environment” and that it is unnecessary, as existing regulations and required reviews accomplish the same goals.

“There are many, many people in this town who are happy about this law,” said Jeanne Frankl, an Amagansett resident and chairwoman of the town Democratic Committee, adding that some were, in fact, disappointed in the new, less stringent version. “East Hampton is a great disappointment,” she said, of the village, “because it has lost every single bit of the character that drew us here. If we are going to have formula stores in town — and we should have some — they should fit into the community,” she said. The proposed regulation would not deter them, Ms. Frankl said. “East Hampton is the hottest place in the nation. They will come, and they will follow our rules.”

Elaine Jones said the proposed law was “not a prohibition” against formula stores, but would just require them to go through the special permit review process.

She said that many of those who spoke against the law were business owners. “And I don’t want to use the word ‘greed’ but it’s all about money,” Ms. Jones said.

Following the hearing, a resolution adopting the legislation that was to have been offered by Councilwoman Sylvia Overby was tabled, at her request.

The board is expected to discuss the issue and the hearing comments at a future work session.