City’s second retail survey yields better news than the data for downtown
April 21, 2010
Hartford Economic Development Director Mark McGovern knew there would be a stink when the city released the results of its first neighborhood retail real estate survey for downtown last July. The survey showed a whopping 40 percent vacancy rate.
Sure enough, press attention focused on the vacancy number, with commentators describing it as like rubbing salt in a wound, and saying perhaps it was not a great idea to draw attention to the lameness of Hartford’s downtown retail scene.
But McGovern begs to differ.
“We have to deal with the reality if we’re going to improve the [retail] environment,” says McGovern. “Pretending certain things don’t exist is not going to help us make good decisions going forward.”
An update to the downtown survey released in January shows the vacancy rate for retail space is up slightly to 43 percent. A total of 23,533 square feet of retail space was vacated since July 2009, including the nightclub Emperor at the Linden, Dulce Restaurant & Lounge, and McDonald’s, which created 5,000 square feet of empty space on its own.
There was 5,600 square feet of new space occupied, including Moe’s Southwest Grill in State House Square (which incredibly only takes up 200 square feet) but that left a net deficit of 17,933 square feet out of the total downtown inventory of 511,439 square feet of retail space.
Chief Operating Officer David Panagore concedes that all that empty space downtown is “like an iron weight around your neck.”
The news was much better on Park Street, however, where McGovern and his staff released their first retail real estate survey on Jan. 15, along with the downtown update.
On Park Street, stretching from Main Street to the boundary with West Hartford, the retail vacancy rate is just 9.6 percent, which for office space would be considered the point at which more inventory was needed. Out of the total of 495,849 square feet available for retail on Park Street — roughly equal to the amount of space downtown — approximately 448,436 square feet is occupied.
“Park Street is very vibrant,” says McGovern. “Any time there’s a vacancy of less than 10 percent that’s a sign of a very healthy sector.”
There is one caveat on the Park Street survey — the old Bradley’s 40,000-square-foot shopping center at 1200 Park Street that now houses a Home Mart and a Sav-A-Lot, but also has plenty of vacant space. McGovern left the site out of the survey because it is so dissimilar from the rest of the retail on Park Street, which average just 2,100 square feet per store.
“We went into [the survey] knowing there’s occupied space there and vacant space,” says McGovern. “We decided not to include either. It’s not as if we didn’t include the vacant space but did include the occupied space.”
Eventually McGovern believes the old Bradley site, which is owned by Park Street mogul Carlos Mouta, will form a bridge between the upper and lower sections of Park. But not yet. The city actually approved a plan for the site proposed by Mouta in 2008, which would have turned it into a more “inward-focused shopping experience, redesigned and reconfigured to allow more retailers to be involved,” says McGovern.
“We love the plan, but market conditions prevented it from going forward,” he says.
Meanwhile Mouta is “working hard” to lease the space that’s there, says McGovern.
“So we don’t envision a different use for the property,” he says. “We see it being a retail center, adding vibrancy and better connectivity.”
Also helping that “connectivity” along will be a streetscape improvement project the city has planned for Park Street where it passes by the shopping center. Funded through the state with federal stimulus dollars, the project will include a redesigned road that slows down traffic, new sidewalks and benches, and on-street parking.
“It’s important to slow down traffic in that section,” says McGovern. “Park goes from two lanes to four and the rate of speed has been too high. By shrinking the road [to two lanes] and creating on-street parking we’ll slow drivers down.”
Next on the agenda for McGovern and his team is a survey of retail on Albany Avenue, where McGovern expects to find vacancy rates similar to those on Park Street.
“I see Albany Avenue as another one of our active, vibrant areas with significant interest in properties,” he says.
There is, however, a big difference between Park and Albany, says McGovern, in that Albany, four lanes wide, is a “commuting corridor” to suburban communities like West Hartford, Bloomfield, Avon and Simsbury.
McGovern sees an opportunity for retailers along the street to get more of those commuters to stop for shopping or eating. The institutions that have established themselves along Albany such as the new YMCA, the Handel Performing Arts Center and The Artists Collective will help that along, says McGovern.
What about the problem of crime in the North End?
“We don’t take crime into account as it relates to [our] research project and real estate project,” says McGovern. “Yeah, there are challenges in different parts of the city, but for the most part it’s not during the shopping hours and it’s not affecting commerce on the streets. Where it could be harmful is if it prevents people from coming to Albany Avenue to shop and dine — then yes.”
McGovern takes a similarly practical approach to the property tax problem in Hartford, where many small businessmen have threatened to leave because of taxes going up by 100 percent over a five-year period ending several years from now.
“It’s a challenge we work around as best as we can,” says McGovern. “We think that having a business in the city has other advantages. Taxes are a fixed cost during the year like other fixed costs and we do what we can do to help a business be as profitable as possible.”
McGovern expects to release the Albany Avenue survey in July, along with updates to the Park Street and downtown surveys.