COMMUNITY AND THE CORNER STORE

Prepared By
Alan Ehrenhalt

In a three-block stretch of Phillips Avenue, in downtown Sioux Falls, South Dakota, there are currently six different places to order a caffe latte. There is a store that features handmade quilts, another whose specialty is crafts from villages in the Third World, and still another that sells only dolls and stuffed bears. There is a store whose entire inventory is made of hemp.

But there are many things that are very difficult to find on Phillips Avenue: a pair of men's socks; an iron; a vacuum cleaner; a TV or radio; a gallon of milk, a carton of eggs, a pound of hamburger, a box of detergent.

Not long ago, of course, all of these things were sold in large quantities on Phillips Avenue. It has been the main business street of Sioux Falls almost since the city's founding in the 1870s. It was the hub of local commercial life in the 1880s, when the original dirt sidewalks were replaced by wooden planks; in the 1920s, when electric trolleys clanged up and down the street all day; in the 1970s, when cars were banished to make a pedestrian mall; and in the 1980s, when the mall was taken out and the cars returned. And it retains that distinction today.

But not in the way that it did for most of its existence. In the late 1950s, in the heyday of postwar prosperity, the three busiest blocks of Phillips, from 9th Street to 12th Street, housed six men's wear stores, 14 women's wear stores, seven shoe stores, a Sears, a J.C. Penney, a Woolworth's, a Kresge's and a Newberry's, a Sheraton hotel, and the local headquarters of both the Lions and Kiwanis clubs.

Then, of course, the malls came, as they did everywhere. In Sioux Falls' case, there were three of them, clustered on a two-mile strip along 41st Street, a few miles south of downtown. The decisive event was the opening of Empire Mall, which grew to 180 stores, 1.2 million feet of commercial space. The year Empire opened, all three downtown department stores moved there, although two of them--the two local ones--soon failed. Some of the smaller traditional merchants on Phillips Avenue hung on through the 1980s, but the opening of a Wal-Mart on 41st Street, in 1991, finished most of them off. The one remaining downtown drug store began losing money, forcing its pharmacist-owner to sell out, and the last men's clothing store, Burke and Michael, finally gave up in the winter of 1997.

But if all this sounds like the beginning of a chronicle of urban failure and blight, it is anything but that. Commercial life has not disappeared from Phillips Avenue; it has merely changed. Downtown Sioux Falls, the Main Street of an old blue-collar midwestern meatpacking city, is sprouting incongruous buds of upscale trendiness in the 1990s.

Minerva's Restaurant is a good example. Unlike many of the enterprises on Phillips Avenue, it is reassuringly familiar to those who walk by it: Minerva's has been operating successfully at the same location for more than 20 years. But in the 1970s, Minerva's was a meat-and-potatoes kind of place, appropriate for a town in which the meatpacking industry was the primary source of employment. Crepes were available for the diner who possessed more exotic tastes. Those who preferred seafood were limited to walleye from local waters, or else frozen shrimp. Now they can have just about anything--tilapia, mahi-mahi, tuna steaks, salmon flown in fresh from Alaska the same day.

The transformation of Minerva's restaurant is not a bad symbol for the transformation of local commerce that has taken place on Phillips Avenue in the past two decades. The exotic is now available there, provided one knows where to look. It is the mundane that is often difficult to find.

Not that anyone would say Sioux Falls has become an exotic place. Even with a population that has swelled to 120,000, and an influx of foreign arrivals that it never had before, Sioux Falls remains a safe, quiet, friendly outpost of upper Midwest conservatism, a place that attracts middle-class professionals looking to escape from a more turbulent life in Chicago, Minneapolis or Denver.

But Sioux Falls has nonetheless changed dramatically, not only in its commercial life but in its economic base and mode of living. It stands as an icon of the move from an industrial to a post-industrial economy, and from the one-career to the two-career family. Twenty years ago the leading local industry was meatpacking; now it is credit card processing. The sprawling Citibank campus built on the outskirts of town employs 3,200 people, and its presence has attracted a dozen other companies doing similar back-office work: keeping track of accounts, handling customer problems, asking people why they canceled. Because there are so many clerical jobs, and because the wages are low--Citibank starts at about $8.50 an hour for full-time work, but some smaller companies are in the $7 range--Sioux Falls has another distinction that places it in the forefront of 1990s economic change: more than 80 percent of area women who have school-age children are in the work force, a percentage said to be higher than in any city of its size in America.

But Sioux Falls has not only changed, it has expanded, grown more sophisticated, broadened out to the world. Twenty years ago, its location in the southeast corner of a sparsely populated state on the prairie limited the jobs it could do, the customers it could sell to, the people it could attract. Now there are no such restrictions. "We have become more global," says Evan Nolte, the Chamber of Commerce president. "There are no limits to where we market."

And Sioux Falls is proud of that. Mark Meierhenry, who was attorney general of South Dakota in the 1980s, practices law at 315 S. Phillips. "An economy," he says, "takes brains and back. We always had backs. Now we've gradually acquired brains. All sorts of people we never had are starting to collect here."

John McLaughlin, an education finance consultant operating out of the Beach-Pay building across the street, came to Sioux Falls from Tennessee by way of Minnesota. He could just as well be running his company anywhere. Location is not an issue. "Technology," he says, "has made this city capable of being competitive with the rest of the country. It allows wealth to be created here, and power to be created here."

But if the economy of the 1990s has given Sioux Falls energy and expansive dreams, it has also changed the rhythms of everyday life in a bewildering way. Like towns all over the American map, and without really knowing it, Sioux Falls has made a bargain in the past 30 years, and is living with the consequences. The bargain is, on one side, an explosion of freedom and choice. Not just the freedom to sip espresso and order fresh salmon, but the freedom to do business anywhere on the globe, to communicate with London or Tokyo in a matter of seconds, to live on the safe, quiet prairie without any of the economic or cultural sacrifices that would have entailed a generation ago. That is Sioux Falls' triumph of the 1990s, and it is hard to find anyone on Phillips Avenue who would be willing to give it up.

But it is only one side of the bargain. The other side is the erosion of custom, of predictability, of patterns of conduct that were known, until the 1990s overused and spoiled the term, as community. The commercial enterprises on Phillips Avenue used to be built on local habit and stable relationships, and now most of them seem hostage to an unpredictable sequence of bottom-line market decisions made somewhere far away. Everywhere one goes on this ordinary street, one finds ordinary institutions and customs being devoured by the global economy.

The inhabitants of Phillips Avenue don't spend much time talking about community, or civil society, or social capital, but they do like to talk about relationships. To a remarkable degree, they talk about commercial relationships, the ones that used to exist between banker and borrower, doctor and patient, lawyer and client, storekeeper and customer. They are keenly aware of how important those bonds used to be, and how they have come apart in the economic turmoil of the past two decades.

Banking is perhaps the best example. The two big banks in downtown Sioux Falls eye each other warily, just as they did two decades ago. They are still competing hard. But they are not the same institutions they once were. One is now a branch of USBank, operating in 17 states. The other is a branch of Wells Fargo, based in San Francisco. Neither one is crowded inside most of the time. People use the automated teller machines. The banks practically make them use the machines. Wells Fargo, which had 17 teller windows in the 1970s, is now down to six. USBank charges some of its customers an extra dollar for every teller visit they make.

And the bankers themselves have been caught up in a vortex of competitive pressure that leaves them uncertain from year to year what company policy will be, where the CEO will be located, and even what the company will be named.

Not that Sioux Falls isn't used to a little absentee ownership. The big downtown banks have been colonies of Minneapolis institutions for as long as anyone can remember. Still, there was a personal quality to banking in Sioux Falls that remained intact all the way into the 1990s. The farmer or merchant who came downtown for a small business loan stated his case to a local manager who gave his approval, more often than not, on his personal judgment about the applicant's competence and character.

But now that they have gone national--or global, some might say--the big Sioux Falls banks no longer have an intense interest in lending money to small businesses. They make most of their money from loaning larger amounts to much bigger fish--and from individual customers who use the machines, stay out of the way, and help keep the teller count low. "Face to face is very expensive for us," admits Jim Mirehouse, district manager of USBank's Sioux Falls office. "We try to minimize the face-to-face number as much as we can."

The system at USBank is this: A customer who wants to borrow less than $250,000 sits down with a salesman who simply takes down the information, sends it to a computer in Minneapolis, and gets back a sheet of paper with a "score" telling him whether the loan has been approved or not. The salesman may or may not know the applicant, but his opinion of the applicant's character has nothing to do with the decision.

Nor does USBank make any apologies for the standardization of what used to be a highly personal service. "What we're trying to do," says Mirehouse, "is become the McDonald's of banking, so a customer when they see a sign will know what you can get there."

What happened to the bank's loyalty to its customers? USBank answers that question with another question: What happened to customer loyalty? As the manager sees it, the conversion to loaning money by formula has been matched, if not exceeded, by the customer's willingness to shift his business wherever the return is a little better at a given moment. "You've got a very mobile customer," he says. "Price is what you have to get them on."

But wherever the responsibility may lie, it is clear that there has been an erosion of relationships in downtown Sioux Falls, not merely in banking but in almost every significant aspect of commercial life. In 1957, for example, there were three pharmacies on Phillips Avenue, each of them operated by the druggist himself, dispensing sympathy and friendly advice along with prescriptions. Today, although one of the three remains open, the vast bulk of the business has moved to the 41st Street strip. Along one two-mile stretch of 41st, there are 11 different pharmacies, each part of a supermarket, discount store, or other mass retail outlet. The druggists are well-paid, but their contact with customers is minimal. They simply fill one prescription after another, as quickly as possible, eight hours a day.

Of course, the transformation of the pharmacy business merely tracks what has occurred in the practice of medicine itself. Four decades ago, the Phillips Avenue downtown corridor boasted six general practitioners, nine dentists, an osteopath, and a podiatrist. They all practiced solo or in small groups of two or three.

Today, in Sioux Falls as virtually everywhere in America, that form of practice is gone. Medicine is in fact thriving in Sioux Falls; there are 500 doctors in town, including cardiologists, orthopedic surgeons, and a whole range of other specialists not previously available there, but they are involved in a profession utterly unlike the one that was practiced on Phillips Avenue a generation ago. Virtually all of them have been caught up in the bottom-line economics of health maintenance organizations. Their opportunities for personal contact with the patient are, for the most part, little better than those of the pharmacist.

The physicians in Sioux Falls are well-compensated for their work. The average family doctor now earns about $110,000 a year practicing in one of the nation's lowest-cost markets. The average orthopedic surgeon makes nearly $500,000 annually. Their disposable income has, to a significant extent, made the cafes and boutiques on Phillips Avenue possible. But they go downtown for leisure, not for work. The actual practice of medicine takes place in clinics in large glass buildings toward the outskirts of town, where patients see a doctor who happens to be on duty at the time they arrive.

It would be foolish to imply that the technical quality of health care has declined in Sioux Falls since the 1950s, or that the community is less healthy as a result of the conquest of medicine by market forces. But it would be equally foolish not to claim that something important has been lost as well.

The commercialization of American medicine is a story familiar enough that it need not be repeated in detail here. What is less familiar is the fact that other professions have changed in some of the same ways, even in communities as far from the cutting edge as Sioux Falls.

Law is one of them. Unlike medicine, it has not disappeared from Phillips Avenue: There are more lawyers than ever practicing downtown, several hundred of them, mostly concentrated in three or four firms that, with 25 to 40 attorneys each, constitute the major leagues of law in a medium-sized midwestern city. Each of those firms has more than a dozen partners making a handsome salary, but those partners are more difficult for the ordinary client to see than they once were. A Sioux Falls law firm, like a New York law firm, relies for the bulk of its output on overworked associates, billing 45 or 50 hours a week at $125 an hour, bringing in upwards of $200,000 to support a corporate enterprise that has grown top-heavy with partners, support staff, and routine operating costs. Unlike their counterparts in New York or Washington, however, associates in Sioux Falls law firms are not particularly well-paid for their labors: a starting salary in the range of $25,000 to $30,000 is fairly typical.

As with medicine, the customer has benefited from some of these changes. The legal profession in Sioux Falls is much more competitive than it once was, and clients are more likely to shop around and compare billing rates in one firm to those in another. Measured in real dollar terms, legal fees in Sioux Falls are almost certainly lower than they were 30 years ago. But so is the level of personal contact in a profession that once thrived on the image of the kindly small-town counselor dispensing thoughtful, avuncular advice. Perhaps that was always an illusion; now, however, even the illusion has become impossible to maintain.

Communitarians have talked and written a great deal in the 1990s about the emergence of Wal-Mart and other giant retailers, and the ensuing decline of the small-town Main Street merchant, but the problem is much larger than Wal-Mart, larger than retailing itself. It is the depersonalization of ordinary commerce, of the little rituals of human economic interaction that have long resided somewhere close to the core of what most of us consider decent life. Buying hardware or groceries is one of them, but so are banking, and visiting the doctor, and filling a prescription.

In the 1950s and 1960s, local commerce in America stood for the most part outside the dictates of global economic forces, operating by its own rules, conducted on a personal and familiar basis by people who remained in place day after day, year after year, doing business with customers whose appearance was regular and predictable. The American consumer products of the postwar years were promoted by mass media advertising, just as they are today. But the final sale, in most cases, was conducted over a counter in local store between people who knew each other and were invested in a continuing relationship. In communitarian terms, that is an enormous difference.

Today, local commerce not only has ceased to protect people from global economic forces, it has become a symbol of them. The drive-up pharmacy window and the ubiquitous ATM send an inescapable message, and the customers who use them, however they may appreciate the convenience, understand the message all too well.

To idealize the 1950s drug store or hardware dealer as belonging to some sort of pre-capitalist Eden is a foolish mistake. The local businesses of a generation ago were as interested in making money as the current ones; moreover, there is little reason to claim that those who operated them were any more honest as individuals than their successors are today. Certainly I am not claiming that.

What does matter is that they were personal institutions, and that both parties to an economic transaction expected that they would continue to deal with each other regularly and for a long time to come--a restraint against deceptive practice even among those tempted to it.

The drawback to this personal commerce of a generation ago was its shortage of choice for the customer. It was an age of bland white bread, weak coffee and bad beer, before microbreweries, Starbucks, and universal sourdough availability. One could change brands, change stores, shop around for bargains, but in the end the alternatives were not very different anyway. For the average consumer, the simplest course was to pick a brand, pick a merchant, and take whatever comfort one could from the stability of the relationship.

What we have done over the past generation in local commerce, as in many phases of life, is to trade relationship for choice. The vast majority of us would not cancel that trade if we could. Choice is simply too attractive.

So the task for communitarians is not to condemn the transformation. There is little to be gained by indulging in nostalgia for lost soda fountains or in cursing the existence of Wal-Mart. The damage done by Wal-Mart is enormous, but it has been done, and cannot be repealed. The task is to look for ways to reintroduce human relationship into local commerce as it exists at the beginning of the 21st century.

To a remarkable extent, experiments in this direction are being conducted all over the country. One can see them, achieving limited success, in the efforts of New Urbanists to graft pedestrian-scale shopping into planned residential developments such as Kentlands in Maryland, Laguna West in California, and North Boulder in Colorado. Thus far, none of these projects has managed to generate a successful retail component to match its neo-traditional values. Residents seem to want them, but the problem of operating small stores profitably in an urban enclave along a freeway has yet to be solved.

A similar experiment can be seen in the "town center" movement that seeks to create brand-new downtowns in sprawling postwar suburbs that have never had them before. In dozens of affluent suburbs scattered across America, developers are creating shopping malls designed to look like old-fashioned Main Streets, with "town squares," sidewalk cafes, and a conscious effort at pedestrian-friendliness. Some of these town centers, such as the ones built in Reston, Virginia, and most recently in Redmond, Washington, are creative and appealing to look at, and are attracting more than enough customers to make money. The difficulty is that they recreate traditional commerce only in a physical sense, not a social sense. The merchants in the new suburban town centers are the same ones that do business in the huge regional malls--national chain stores staffed by transient and poorly paid part-time employees whose relationship with the customer is minimal. Town centers are an interesting idea; they are not a significant step in the direction of human-scale commerce.

But more important steps are being taken, and in the most appropriate places: the Main Streets where local commerce thrived for decades and atrophied amid the suburbanization of the past 30 years. Progress can be seen in the declining vacancy rates of the 1990s in downtown corridors through small-town and small-city America. It is common, as the decade comes to a close, to find downtowns whose primary commercial streets had most of their storefronts empty a few years ago, and now have 80 percent of them occupied. These are not the merchants of the 1950s, restored to health by some mysterious process; they represent a new generation in local commerce. For the most part, they are not selling hardware or groceries or men's socks; as in Sioux Falls, they are niche merchants, selling unusual items or providing a personal shopping experience that retail malls are unable to provide.

But whatever they sell, they represent a revival of genuine local commerce, one that is beginning to spread beyond the confines of niche marketing. In Sioux Falls, one can detect signs of this revival even in such unlikely places as the banking business.

On the corner of 11th and Phillips, in a brand-new red brick building with huge glass windows, is the Dacotah Bank. It looks like the two giants down the street, but in fact, it is something entirely different. It is an experiment launched by a country bank from the small town of Huron, 100 miles away, hoping to take advantage of the big banks' growing reputation for sterile impersonality.

The most notable element in banking in Sioux Falls in the 1990s isn't the jousting of the giants; it's the profusion of little newcomers searching for a niche somewhere in the market. With its decade-long prosperity and a minuscule unemployment rate, Sioux Falls has become a magnet for ambitious little banks, each trying something a little different.

The niches vary: Founders Bank, for example, is a venture backed by affluent physicians, hoping to capture some of the medical trade. But all of these upstarts are essentially selling the same thing: relationship. The big banks don't care anymore, they tell customers. We care about you.

Deerfield Bank hired a pair of doormen, Bob and Ossie, just to greet the customers and make small talk with them. The president of Dacotah Bank, David Bangasser, grills hot dogs on the Phillips Avenue sidewalk at noon on Fridays. "Does it look stupid for the bank president to be out there grilling hot dogs," he asks, and then he gives the answer: Who cares? His bank has a point to make, and they will make it any way they can.

"There's a niche at the bottom for somebody to start up again," Bangasser insists. He realizes that not all of the newcomers will make it; there are simply too many of them, with too little capital. Even Dacotah Bank, considerably better financed than most, would be in trouble if the giants decided to play genuine hardball and cut their spread on interest rates down to a point or two. If that happened, many of the upstarts, perhaps most of them, would probably lose too many customers to stay in business. So they are playing a very chancy game.

But what really matters about the banking competition in Sioux Falls in the 1990s isn't the eventual outcome. It's the fact that it is taking place. Everyone on Phillips Avenue appreciates the prosperity of the moment, and yet everybody also knows that something is missing. The missing element is relationship. It is a word that every business on the street is eager to use.

On the corner of Phillips and 10th is the old Eastwold Drug Store, now renamed Statz Drug, after Steve Statz and his wife, Julie, who bought it a couple of years ago from a pharmacist-owner who was working seven days a week and losing money.

Statz, like many of the new proprietors up and down Phillips Avenue, is trying to prove something. His family has been running drug stores since 1915, when his grandfather set up shop as a pharmacist in the little town of Parkston, an hour west of Sioux Falls. The Statz family business has changed with the years as it has had to, opening up near the malls on 41st Street, branching out into home health care and equipment rental, but Steve Statz has wondered for years if he could recreate an old-fashioned family store downtown, a walk-in place with a soda fountain and a friendly, patient pharmacist, and somehow make a go of it.

So he is trying. Whether it will work remains to be seen. Any effort to revive a family-owned drug store might seem like a foolish move anywhere in Sioux Falls, let alone Phillips Avenue. "We can't make any money competing with Wal-Mart on price," says Statz, who has a place on 41st Street himself. "If you try to go head to head with these people, you lose your shirt."

Nor can a family drug store compete very well for labor. Each year, the pharmacy school at South Dakota State University in Brookings produces about 50 graduates, and virtually all of them go to work for Wal-Mart, Walgreen's, Safeway or one of the other giants, at an annual salary of $50-60,000 for a 40-hour week. Steve Statz can't afford to pay them that.

But he is doing something that the chain store pharmacists don't do--are all but prevented from doing--and that is cultivating a relationship with the customer. The chain pharmacists crank out prescriptions so fast they scarcely have time to talk to the person across the counter, let alone inquire about personal problems.

The pharmacists at Phillips Avenue's one remaining drug store make conversation with the customers. They do compounding and mixing of remedies, the way old time druggists did, but modern supermarket pharmacies generally will not. And unlike the chains, they deliver, with an almost manic speed and enthusiasm. A lawyer or banker who calls in a prescription from his office in the morning sometimes finds it sitting on his desk a short time later.

Across the street from the drug store, at 209 S. Phillips, is Zandbroz, the store that represents Jeff Danz' bold and as yet unfulfilled dream. Danz is quiet and cerebral, so unassuming as to be scarcely noticeable among the customers looking over his shelves of merchandise on a weekday morning. Yet he is a home grown urbanist, passionate about downtowns and the loss of community and the chance to rebuild relationships through the vehicle of old-fashioned commerce.

Nearly a decade ago he and his brother conceived the idea of a new downtown variety store trading on nostalgia for the departed Woolworth's and Kresge's, but with a bookstore and a neighborhood coffee bar added in. And they have created it. Zandbroz is a genuine community gathering spot, and it is making money. But not much, and not easily.

That is in large part because Zandbroz' book business was devastated by the arrival of a Barnes and Noble superstore at the Empire Mall on South 41st Street in 1994. That store took away 30 percent of Zandbroz' gross virtually overnight. It also taught Jeff Danz a hard lesson. He thought he had done so many things right -- the favors to customers, the book signings, the dark roast coffee -- that he was sure he could survive Barnes and Noble with relatively little problem. That turned out to be wrong. People not only switched their book buying to Barnes and Noble, they started drinking coffee there as well.

But Zandbroz changed its product mix, cut its expenses, and stayed in business--a little more profitably each year than the last. That is as good a reminder as any that the rivalry between Phillips Avenue and 41st Street--between any downtown and any shopping mall, almost anywhere in America--is a little more complicated than we often realize.

Phillips Avenue lost its original appeal as a retail center in the late 1960s, about the same time similar streets were going into decline all over the country. The first mall opened on 41st Street in 1967, and Montgomery Ward, Newberry's, and the Baker Shoe store all moved there. In 1976, the much larger Empire Mall was built, and Phillips lost J.C. Penney and the locally owned Shriver and Fantle department stores.

In the mid-1970s, copying other communities, Sioux Falls tried converting Phillips into a pedestrian mall to save it. That move was a disaster, just as it was nearly everywhere else. Unable to drive down Phillips or park along the street, people stopped coming there at all. By 1980, as Mark Meierhenry says, "You could have shot off an artillery shell on Phillips Avenue and not hit anybody." Forty percent of the retail space was empty. Pigeons roosted in the Shriver building.

Meanwhile, 41st Street was thriving, populated largely by the businesses that had fled downtown. The only frustration, as 41st turned into an endless strip mall, was its inability to attract the glitzier national chains. The Empire Mall managers spent the entire decade of the 1980s chasing The Limited, Eddie Bauer, even T.J. Maxx. None of them wanted to come to Sioux Falls.

In the early 1990s, that changed. By the end of 1993, the big national stores had all but invaded Empire Mall. But as they did, the rivalry began to change again as well.

Empire Mall was never really a local institution. Owned for a while by Equitable Insurance, it was eventually sold to a California development company. But at least the tenants were local. Then, within the space of a few months, that ceased to be true. Once 41st Street became attractive to the Gap and Victoria's Secret, the rents rose too high for the home-grown merchants. One by one, they disappeared.

More than that, the clientele and image of the mall changed as well. During the weekends, Empire attracted huge crowds from rural South Dakota and from out of state, and generated messy traffic jams; Sioux Falls residents began advising each other to stay away on Saturdays--"It's all farmers and teenagers."

As a result, almost by default, Phillips Avenue began to reclaim its position as the hub of local community, the place where people could walk down the street and run into someone they knew. It also began to turn upscale, reversing the decline that had begun 30 years earlier. On an ordinary Saturday morning now, the parking lots at Empire Mall are full of RVs and pickups. But the Volvos are downtown. They belong to doctors buying expensive camping equipment at Great Outdoors, or Citibank managers looking over the stock at the Irish import store, or having lunch at Minerva's.

Phillips Avenue hasn't become quaint or gentrified; it's about as dowdy looking as it ever was. A few conspicuous eyesores, like the State Theater, vacant for more than a decade, serve as reminders that there is still a great deal of ground to make up. But it isn't difficult to see what's happening. Jeff Danz, sipping a dark roast coffee at a table in his cafe, sees it in many places besides Sioux Falls. "Downtowns will resurface upscale," he says. "The malls will be all big box. They will be the nuts and bolts of commercial life. We're going to become cool."

Slowly but surely, Phillips Avenue is also reclaiming its role as the weekday home of the local economic elite. To be sure, much of the managerial class works elsewhere: at the Citibank and Gateway campuses on the edge of town; along the mall corridor on 41st street; at the two big hospitals, McKennan and Sioux Valley. But these people tend to be connected only loosely to each other and to community leadership. The managers on 41st street are nearly all minor players in huge retail chains, more interested in making money and winning promotion than in becoming community leaders. The top layer of management at Citibank is on the road constantly; the cardiologists and orthopedic surgeons at Sioux Valley are too busy for most kinds of local involvement. They may join the Chamber of Commerce, but they are far more likely to donate money than time.

So if there is a local leadership class in the 1990s in Sioux Falls, it is downtown, concentrated among the lawyers and finance officers and other professionals who meet for lunch, stop and chat on the street, call on each other for help with fund drives and arts campaigns. There is a face-to-face elite subculture reconstructing itself on Phillips Avenue, a new variant of the one that existed there in the 1950s. Those who are on the edge of town are not part of it. "Everybody in this town with $20 million," Mark Meierhenry says, half seriously, "is back on this street. They're not on 41st Street."

The revival of downtown Sioux Falls has been a patchy sort of revival, to say the least. There are many products that cannot profitably be sold there, many small but important economic transactions that are not going to take place there anytime soon. No one is going to open up a grocery or a hardware store on Phillips Avenue in the next few years.

Still, it is a genuine revival, and it parallels the changes currently taking place in American communities all over the country, in cities larger than Sioux Falls and in much smaller towns as well. Nearly every decent-size community has a strip mall that is half-vacant or more; all told, such vacancies now amount to the equivalent of 3,000 entire medium-sized malls. Many of these strip shopping-centers look as dilapidated and obsolete as the most forlorn small town Main Street. Meanwhile, it is routine to find downtown commercial corridors whose storefronts, as in Sioux Falls, were mostly empty in the 1980s, and are now almost all full.

Nothing so dramatic has happened to the larger regional malls; most of them are still making money. Nevertheless, it is fair to say that few of them stand any longer as outposts of novelty or enthusiasm. Sioux Falls' Empire Mall, after 20 years, greets its customers with huge signs assuring them that "We are glad to have you shopping here." The transparent defensiveness of that slogan testifies to the changing psychology of American retail life in the 1990s.

Across the street, at the half-empty Empire East Mall, an Applebee's Restaurant not only proclaims itself to be a "neighborhood bar and grill," which it manifestly is not, but decorates its lounge with old street signs from downtown Sioux Falls. When a national chain begins attempting to lure diners by evoking memories of the inner city, it is safe to say that some form of turnabout is well underway.

In the past generation, American communities and local governments have tried a long list of strategies in an effort to revive their downtown commercial corridors. Most of them have been failures, from the massive urban renewal projects of the 1950s to the pedestrian shopping malls of the 1960s and 1970s and the hotel-convention center projects financed by federal subsidy in the 1980s. Planners have tried tearing down older shopping blocks and replacing them with suburban-style downtown malls; they have even, in a few cases, bulldozed entire downtowns and built malls and parking lots on the empty ground. This, too, has nearly always failed.

During the 1990s, an increasing number of communities have switched to a strategy of historic preservation, and this has been demonstrably more successful. Towns and cities that considered their Victorian shopping districts to be eyesores a decade ago are now promoting them as tourist attractions, and drawing large weekend crowds.

But in the end, as even the most ardent preservationists concede, it is not physical preservation or any physical features at all that bring an urban retail corridor to health. It is the return of a commerce based on human interaction, on stable relationships, on the small comforts that derive from the intercourse of buyer and seller, professional and client, week after week and year after year, during all the seasons of ordinary life.

Those relationships have eroded in recent times, but they are starting to return, for the simple reason that people realize what has been lost. That's the important communitarian lesson that Phillips Avenue and its counterparts across America can teach us.

The Communitarian Network
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