Many downtown storefront spaces difficult to lease
May 5, 2007
By DIANE WEAVER DUNNE, Hartford Business Journal Writer
Millions of private and public dollars have been poured into new downtown developments. But so far, few retailers are knocking on Hartford’s door.
For those developers who report they are working on deals to bring retailers to downtown, it is proving to be a long, arduous task.
The evidence is in the high number of retail vacancies. Walk the streets of downtown Hartford, and there are numerous vacant street-level retail spaces available for the taking.
“It is difficult,” said David Nyberg, developer of three mixed-used properties in downtown. Three years since Nyberg converted an office building into apartments, called 55 On The Park, a street-level space continues to go begging for a restaurateur.
“I don’t know what the issue is,” he said.
Like some other Hartford investors, Nyberg is switching gears and recently drew up plans to downsize that restaurant space — considered prime downtown real estate across from the scenic Bushnell Park — from approximately 10,000 square feet to 6,000. The balance of the space, about 4,000 square feet, will become five more apartments.
Hartford-based Talcott Realty Investors also understands the retail struggle. In addition to owning about 4 million square feet of commercial property nationwide, it also owns the Gold Building and the attached parking garage that houses roughly 12,000 square feet of storefront retail space on Pearl Street.
One of its downtown retail spaces on Pearl Street has been vacant for nearly seven years. Despite an extensive makeover of its storefronts on Pearl Street, there were still no takers, said Marty Kane, senior vice president of Talcott.
Last July, in the midst of Talcott’s lease negotiations with Travelers, the decision was made to hang out a white flag on its retail leasing efforts, Kane said.
“We struggled to lease the space. We gutted the space, and redid the storefronts with the concept that if we brightened up the space, we could find a tenant. But still we had no real bites,” he said.
Talcott decided to convert most –- 10,000 square feet — of its street-level retail space into file storage rooms for the insurer. With the exception of an existing hair salon, Kane said it was more cost efficient to lease all of its ground floor space to Travelers because the insurer’s extensive storage needs required specific weight-bearing capabilities. By providing storage space at grade level versus within the 26-story Gold Building, it became evident that was the least expensive option, Kane explained.
“Quite honestly, I would much rather go with retail. But one space has been available since 2000, another since 2001,” he said.
Nyberg also rethought his desire to sell a downtown storefront space to a retailer. Instead, he recently sold one of three retail spaces to a law firm, Appleton & Appleton, at his condominium development at 266 Pearl St. “Our feeling is that we want feet on the street. It is great to have retail, but corporate, in-and-out traffic is great. We want activity there, be it a sales office, an art studio, whatever it may be,” he said.
Four other retailers, a high-end photography studio, high-end salon and two restaurant groups, are interested in the two remaining retail spaces, ranging between 2,000 to 2,500 square feet, he added. “We plan to have all three retail spaces sold within the next 60 days,” Nyberg said.
At Nyberg’s American Airlines building on Main Street, his efforts to lease space to retailers has been more successful. Woody’s, a long-time hotdog vendor, has expanded and opened an adjacent pub, Quiznos will be reopening once the sidewalk scaffolding is removed, an Asian restaurant has contracted for a large space at the corner of Pratt and Main streets, and Jojo’s, a coffee shop, occupies a space on Pratt Street.
“I will tell you that retail is still challenging,” Nyberg added. “People going into Connecticut retail really have to be boutique regional players to understand the market. The Maxes [referring to Richard Rosenthal’s restaurants] understand the market they are in, and that is why they are successful. … At some level, you are betting on your retail tenants.”
Completing the retail puzzle in a development project takes time, said Chuck Coursey, spokesman for Northland Investment Corp., developer of the 262-apartment, office and retail Hartford 21 development.
Northland has announced three retail tenants, YMCA of Greater Hartford, Bliss Market and an unnamed wine store. Only the YMCA has moved in so far. The remainder of Hartford 21’s 53,000 square feet of retail space remains vacant.
Coursey said that Northland is in active talks with several retailers. “We would rather take our time to get the right mix of retail in there that will thrive and survive for the long haul,” he said.
“Retail didn’t up and leave downtown Hartford overnight. We didn’t get into this overnight and we won’t get out of it overnight. We need to stick to what we believe is the right plan.”
Coursey said that a zoning variance is needed by the city before a wine store can open its doors at the former Civic Center Mall site, and that the Bliss Market opening was pushed back from April to late summer due to build-out revisions.
Regardless of the retail challenge, Coursey said there is forward momentum of bringing residential back to downtown, which in turn should help drive more retail to the city. “Retail follows rooftops,” he said. “Retailers four or five years ago that took a pass on Hartford are now taking a second look.”