Fall 2011
On the Fast Track

The specialty retail program at Union Station in Washington, D.C. doesn’t seem likely to be running out of steam any time soon. Its manager, Roy Staeck, makes sure the program continues to charge full speed ahead.

The numbers are impressive. Historic Union Station in Washington, D.C. sees as many as 
40 million visitors each year. These include a healthy mix of local residents, business leaders and government workers, tourists and commuters. Catering to such a diverse customer demographic might be a challenge to some—but Roy Staeck doesn’t see it that way.

The director of business development for the station says the unique venue and the customer demographic are two of the reasons Union Station has seen a strong and vibrant specialty leasing program flourish over the years. Staeck counts his contribution to the specialty leasing program’s growth at the station as one of his biggest achievements. “When I started it consisted of a few kiosks. The program has tripled in size to include more kiosks and a new cart program that includes an outdoor market and vending,” Staeck says.

Unusual location; unusual challenges

While the historic aspect of Union Station might make it a particularly attractive proposition for consumers and retailers alike, it is precisely the same issue that creates particular problems when it comes to leasing space and trying out innovative marketing ideas. For example, when the leasing program expanded to include an outdoor market last year, it was a long and complicated process to implement. Staeck says the station had to work with the Commission of Fine Arts because the program includes a historical area of the station—approval for expansion took a year. This outdoor market now includes many food stalls including Indian, vegan and Mexican food; flowers and vegetable stalls and local arts and crafts. About 60% of the outdoor market space is devoted to food, Staeck reports.

He adds that even just a few years ago, implementing such a program at the historical space would have been an even bigger challenge. Staeck says that people’s attitudes have changed to the point where they embrace the concept of traditional farmer’s markets, food trucks and the like. The First Lady, Michelle Obama, has had a key role in raising consumer awareness about fresh produce and markets, he adds, so having an outdoor market at the station has been a welcome addition, according to Staeck. “At Union Station the carts that we have outside in the carriage porch enhance the space and add a vitality that people like,” he observes.

Specialty retail start

Staeck’s first job out of graduate school was with the Target Corporation in Minneapolis. “I worked with the buyers and learned how to market new ideas,” Staeck says. Eventually he got interested in mall management and Staeck moved on to become a specialty leasing manager. His first job in specialty leasing was with General Growth Properties around ten years ago.

In those ten years, Staeck has seen that specialty retailers have become more “refined” and that consumers have become more accepting of buying merchandise from an RMU. “Some of the best retailers use infomercials to introduce their products to the public and that increases sales. I didn’t see that happen when I started in the industry.”

Staeck says the current specialty leasing program at the station has a mix of everything from the basics such as Rosetta Stone to local products. “We have a farm out of Virginia that does everything with lavender.” Staeck says adding that retailers from a variety of nationalities participate in the program. Because of the location and with the heavy tourist traffic, a lot of tenants want to sell souvenirs, Staeck says. While some souvenirs would be fine, selling only those wouldn’t work, Staeck points out adding that he makes sure the cart program has a healthy product mix that would satisfy the broad customer demographic. “I had a couple of situations where tenants do not understand the intent of a use clause in their agreement and because of that they had to be terminated,” Staeck says as he recalls a particular challenge.

Despite the occasional problem Staeck says he absolutely loves the specialty leasing program and all aspects of specialty leasing. In what is surely a testimonial to his efforts, the program has been fully leased for the past three years despite the recession. “I make the effort to keep our rates competitive. I also make an effort to have tenants that fit our demographics and have a good chance of being successful rather than just filling a location,” Staeck says.

Staeck says that the station venue also has advantages that might not be the case in traditional malls. The station is busy every day of the week, he points out and is the stopping and starting location for most tour groups. It is one of the few indoor shopping areas in the city. “Personally I think working in such an amazing building two blocks from the Capitol is a wonderful advantage in itself,” Staeck says.

The station also conducts many marketing programs, which bring in sponsorship revenues. A recent event featured a mural painted by a reputed artist to increase awareness of diabetes. The event was commissioned by Novo Nordisk, a maker of diabetes treatments.

Staeck says he was able to find sponsorships when the restrooms were remodeled recently. Koehler, the plumbing fixtures company, donated all the fixtures for the restrooms in exchange for product placement and increased brand awareness.

The road ahead

In the future, Staeck sees specialty leasing become even more attractive to national retailers. He also sees increased synergy between online social media and the field of specialty leasing. Crossover between marketing and sales now happens across a variety of platforms, Staeck says. He points to the example of Proactiv as a strong example where behind-the-scenes marketing via television infomercials has helped sell the products through carts and kiosks.

Staeck looks forward to keeping the leasing program at Union Station robust and fresh. “There are a lot of people who love the Station and because of this we get a lot of feedback and direction,” Staeck says. “I look for new ways to bring in revenue while filling a void that is needed in our retail,” he adds.

By all indications Staeck’s forward thinking and can-do attitude have paid off and created a thriving specialty retail leasing program in a historical and unusual location. “It is a vibrant program that has been fully leased since it started three years ago. In this environment there is always a new challenge that makes the job interesting,” Staeck says.

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