Chain Retail For New London Just A Pipe Dream, Brokers Say
Behind facades of antique brick and stone, the 71 vacant storefronts downtown offer acres of commercial property. But brokers say national chain retailers will not be the ones to fill those spaces, and are quick to dash dreams of Panera Bread or Trader Joe's.
People continue to think an “anchor” store would be the silver bullet to shore up downtown retailing, but it's nearly 20 years since a major study by the Regional/Urban Design Action Team concluded: “It should be clear that New London's Central Business District no longer plays a major role in the general retail trade of its region, and that it is not likely to do so in the future.”
After the 1-million-square-foot Crystal Mall opened three miles from downtown in 1984, downtown vacancies skyrocketed to nearly 500,000 square feet. An analysis conducted a year after the mall opened said that 47 businesses “disappeared from downtown altogether.”
The decades-long evolution of suburban chain retail explains why one in three downtown storefronts is vacant, but brokers say it is misguided and unproductive to target large chain stores as a way to turn things around. The city's layout, dating from its origins, and its lower household income make downtown a poor fit for them, real estate brokers say.
”Downtown New London is a bit of a black hole for retailers,” said Penny P. Wickey, principal of Saugatuck Commercial Real Estate LLC, in Westport, which represents such retailers as Cold Stone Creamery and the international discount-grocer Aldi. “New London isn't set up from a transportation or demographic perspective, in my opinion.”
Even if a downtown building met one requirement - say, square footage - the property would likely lack other must-haves of chain retailers, such as free, dedicated parking; roadside visibility from all sides; and modern amenities.
”That's something that's not easy for any downtown, not just New London, to compete with,” said Bob Silverstein, a partner and appraiser with New London's Miner & Silverstein LLP.
According to the franchise fact sheet for Panera Bread, the “bakery-cafe” looks for buildings of 3,800 to 4,500 square feet, a size that some vacant downtown storefronts could offer.
But Panera prefers “mostly rectangular vanilla box space,” a minimum of 50 parking spaces and a daily traffic count of 20,000 cars.
Attached parking lots are scarce downtown, and the average daily traffic count on Eugene O'Neill Drive just west of Pearl Street, for example, is about 10,000 cars, according to state traffic data.
The popularity of the Trader Joe's grocery retail chain, which combines gourmet items with reasonable prices, has prompted letter-writing campaigns in some communities, which want a destination grocery store to provide the spark of a substantial retail anchor.
”Everybody does that,” said Wickey in an eye-rolling tone. “People can say they want that. You have to be pretty realistic about what you're talking about.”
Four of the six Trader Joe's Connecticut locations are in Fairfield County, where the median household income of $80,000 is double that of New London, according to data from the Connecticut Economic Resource Center Inc.
But even less high-end retailers bypass New London, lured by the easy highway access and existing clusters of chain retailers in Groton and Waterford.
The Aldi supermarket chain seeks locations where incomes are more in line with New London's, such as Waterbury and New Britain. But when Aldi recently looked at expanding in southeastern Connecticut, it looked briefly at Colman Street but then focused on Waterford and Groton, Wickey said. “I think they thought there was more energy in Waterford and Groton,” she said.
”There no confluence of retailers, so there isn't a huge line of traffic into downtown New London,” Wickey said. “I think the Waterford and Groton scenario is one that carries almost everyone.”
Local brokers said they should be involved in any future efforts by the city to develop a business-recruitment plan.
”They need commercial brokers to give their side and say, 'Don't waste your time going for Saks Fifth Avenue and Panera Bread,'” said Susan Howard, a longtime commercial broker with U.S. Properties Inc., which lists many of downtown's vacant storefront properties.
Yet there doesn't appear to be consensus on what businesses should be recruited, or whether the current building stock can work for 21st-century retail.
Downtown New London “doesn't have something that generates traffic. Each boutique is its own destination,” said Peter Guille, president of Waterford's Pequot Commercial. “There's really no big reason to go to downtown New London.”
Norm Peck, a Pequot agent representing downtown properties, is one who still suggess that downtown be treated as a mall and seek an anchor retail store with easy, drive-though parking. “The city might consider buying a few buildings and providing more off-street, downtown parking,” Peck said.
Broker Steve Percy of Pequot Commercial said he was convinced that “little, boutique shops” should fill most of the empty storefronts. “I don't see what else you do down there,” he said.
Wickey, of Saugatuck Commercial Real Estate, said New London's downtown retail should be narrowly tailored to those who are already downtown: office workers and downtown's immediate residents - not the hypothetical East Lyme resident who would venture downtown if only for a Trader Joe's.
”Who are the customers that come to downtown New London?” Wickey said. “Ultimately, you're attracting a shopper, not a retailer.”
Fred Carstensen, economics professor at the University of Connecticut, said a retail trend away from massive malls could bode well for New London's compact, historic downtown.
”The trend in retail is toward smaller footprints, smaller
boutique-y type of places, lot of places to walk around, eat and drink coffee,” said Carstensen, who is also director of the Connecticut Center for Economic Analysis at UConn. “Physically, New London could achieve that. But getting there is another story.”
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