Creative Self Storage Solutions Offer Community Appeal

It's not often a developer loses a land use battle to a strip club.

But that's exactly what happened to a builder trying to build a self-storage facility near Atlanta, according to Weissmann Zucker Euster + Katz P.C. shareholder Scott Zucker, who represented the developer.

“The community had a choice between a strip club and a self-storage facility. They picked the strip club,” Zucker said last week at Bisnow's Atlanta State of Storage Assets conference. “So you just never, ever know, with regard to this, what you’re going to get on the development side.”

"Americans Need More Self-Storage, But They Don't Want It Too Close To Them" - BIZNOW.com

I’m having a hard time wrapping my mind around this situation—it sounds completely untrue. There’s probably more to the story than what we see on the surface, but from a self storage developer’s perspective, it’s definitely jaw-dropping. I understand that municipalities don't love self storage facilities. They don’t generate gross receipts taxes, they don’t create many jobs, and there is a perception that they are ugly (and some definitely are). However, when we present our case to the neighbors surrounding our site, we can make a strong argument for why self storage is a better option than other uses, like retail, for which these properties are often zoned.

For starters, self storage generates only about 1/20th of the traffic that a retail strip (not a strip club, but a strip mall) center would, even if the retail space is 1/5th the size of the self storage facility. Additionally, our office hours are typically from 10 a.m. to 6 p.m., whereas retail operations may run from 6 a.m. to 10 p.m. While we give access outside those hours, it's rarely used. It's true, self storage might have longer hours than a strip club, but we don’t create significant traffic, noise, lights, delivery trucks, etc. We also don't use excessive water or contribute to overcrowded schools.

These points can help us win over the neighbors, but they don’t necessarily address why cities are hesitant to approve self storage projects. This is where creative solutions, such as incorporating office or workshop spaces, come into play. Imagine transforming a portion of the self storage facility into a hub for entrepreneurs―an incubator of sorts. Picture a candle maker who’s outgrown her garage. She doesn’t need a traditional storage unit; she needs a workspace with basic amenities like lighting and power outlets. Adding those amenities is simple and affordable for us, it's a simple transformation of a storage unit into a functional work space.

DXD - Charleston:  a proposed facility with street-front retail space

We’ve already started integrating these concepts into a few deals in our pipeline. One of our projects includes ground-floor, street-front retail space with two levels of storage above. For the city, approving the retail plans was a condition for approval. It’s in a strong retail location, so it works well, while many self storage sites are poor to horrible locations for retail. Another pipeline project has two lots separated by a street. The larger parcel will hold our 3-story climate-controlled self storage facility, and in the smaller lot, we’re building 15, 20'x45' spaces with roll-up doors. These units will be equipped with lighting, air conditioning, power, and other essentials to create turnkey spaces for small businesses. We’re targeting startups that need more than just Wi-Fi―people like T-shirt printers, photographers who need permanent studios, or custom furniture makers. These are exactly the types of businesses and jobs that cities love to support.

For this particular market, our project is a prime location, and the city still wants additional benefits for the community to accompany the self storage facility. Fortunately, the numbers work with these workspaces, even with the added tenant improvement costs, because this site is one of the best development opportunities in the market for self storage. As we continue to identify premium, hard-to-entitle, infill sites, incorporating these community-focused elements could be the key to unlocking even more successful projects.