Developing a Comprehensive Niche Retail Attraction Strategy

1. Developing a Comprehensive Niche Retail Attraction Strategy

2. Experience Over 15 years of dedicated experience in commercial corridor revitalization National and international experience in downtown and neighborhood commercial corridor revitalization Public, private and non-profit sector experience Area of Expertise: Trade Area/Market Analysis Strategic Planning and Program Establishment Retail Attraction/Retention Strategies Event Management Feasibility Analysis

3. Presentation Agenda Underlying Retail Principles that Inform Niche Retail Attraction Strategies Case Study: New Rochelle Analysis and Recommendations

4. “New” vs. Traditional Commercial Corridor Single-owner “Lifestyle Centers” Traditional Commercial Corridor

5. “New” vs. Traditional Commercial Corridor What’s Different Individual buildings, individual ownership Less familiarity or comfort with sophisticated leasing structures (i.e. percentage rent) On-street parking/limited parking What’s the Same Need to ensure businesses are profitable Competition for the same customer Competition for some of the same retailers Customer expectations of adequate goods/services Need to ‘set the stage’ by creating an attractive environment for retailers

6. Retail Principles Attracting retail requires an understanding of retailer concerns and a willingness to address them in a comprehensive manner

7. Retail Principles Retailers Concerns – As Ranked by ICSC Survey Crime/perceived crime Weak market demand (perceived or real) Theft or ‘shrinkage’ High rents High build out/rehabilitation costs Difficulty identifying sites Inadequate parking Higher operating costs Higher construction and development costs Lack of amenities to attract out-of-neighborhood employees

8. Retail Principles Characteristics of a Successful Neighborhood Commercial Corridors Critical mass of retail stores (Density/proximity) Balanced retail mix (complimentary/comparison goods) Visitors are able to find and purchase the goods and services they need, when they need them (merchandise mix, hours of service) Existing, captive market (housing density) Visitors feel safe and secure (clean and safe) Easy-Ware CorporationEasy-Ware Corporation

9. Retail Principles Co-Tenancy Tenants require a critical mass of favorable tenants of a specific type and character to create the synergies necessary for success

10. Retail Principles Co-Tenancy on Commercial Corridors Replacement needs (supermarket, drugstore, dry cleaner, fast food) Restaurants/cafes and entertainment uses Restaurants/cafes and unique retail Comparison retail Jewelers Ladies apparel Shoes

11. Retail Principles Strategic Positioning Defining a customer and income segment – high-end, moderately-priced, value Leasing decisions reinforce the strategic mix of existing stores Covering the basics in commodities and categories for every lifestyle segment Position like retailers in close proximity Finding retail gaps and filling them

12. Retail Principles Defining what kind of retail makes sense on your corridor. Neighborhood Commercial District Convenience retail General Commercial District Convenience retail + specialty retail Regional Commercial District Specialty retail, entertainment and lifestyle uses

13. Retail Principles Improving the Existing Business Mix

14. Retail Principles Using trade area to define retail opportunities

15. Retail Principles

16. Retail Principles Tenant Specific Research Do you have the right people? Einstein Bros. Bagels ?70% some college education Mandee’s ? trendy young women with mod/low incomes Do you have enough people? Auntie Anne’s ? 30 pp. every 5 minutes during off-peak Do you have the right space? CB2 ? 6,000 – 9,000 sf stores targeting young professionals Fresh & Easy ? 14,000 sf store Pinkberry ? 600 – 1,600 sf

17. Retail Attraction Where do you find tenant specific information? Websites Tradeshows Brokers/Leasing Agents Regional Real Estate Reps Networking

18. New Rochelle Project Overview Niche Retail Analysis Assessment of Existing Conditions Trade Area Analysis Interviews Property Owners Business Owners Institutional Stakeholders Niche Opportunities and Recommendations

19. New Rochelle: Existing Conditions Analysis Strengths Strong, stable business improvement district Successful façade improvement program 20 Façade Restoration Projects Completed New businesses and promotional events 17 New Businesses created 4 major promotional events established New retail - Target, Kohl's, and Barnes and Noble affirm downtown retail viability These successful indicators are a testament of a downtown revival within the Main Street district and lays the foundation for an aggressive retail niche attraction plan. Most important confirms the BID’s capacity to implement a niche business attraction plan, which is the next critical step in the regeneration of “Main Street” New Rochelle. The BID’s Model Development Block Program and the efforts of large developers are making the business climate ripe for sustaining the Main Street district’s resurgence as premiere destination for hospitality and home goods niche, which serve as the impetus to attract more economic activity to downtown New Rochelle. These successful indicators are a testament of a downtown revival within the Main Street district and lays the foundation for an aggressive retail niche attraction plan. Most important confirms the BID’s capacity to implement a niche business attraction plan, which is the next critical step in the regeneration of “Main Street” New Rochelle. The BID’s Model Development Block Program and the efforts of large developers are making the business climate ripe for sustaining the Main Street district’s resurgence as premiere destination for hospitality and home goods niche, which serve as the impetus to attract more economic activity to downtown New Rochelle.

20. New Rochelle: Existing Conditions Analysis Opportunities Growth in downtown residential population 165,000 sq. ft. of New Residential and Commercial Space Approx. 1,400 new luxury apartments A critical mass of stores selling “home related” products A critical mass of restaurants that distinguish New Rochelle is already know as a local ‘foodie’ destination

21. New Rochelle: Existing Conditions Analysis Challenges Persistent negative perceptions of Downtown’s economic recovery Proliferation of storefront vacancies Disjointed broker community Accessibility constraints Low pedestrian foot-traffic Inability of existing businesses to articulate regeneration efforts

22. New Rochelle: Existing Conditions Analysis Existing Vacancies Approx. 100,000 sf of vacant retail

23. New Rochelle: Existing Conditions Analysis Existing vacancies + inconsistent hours

24. New Rochelle: Niche Opportunities The analysis considered four key niches College Goods and Services Weddings Goods and Services Hospitality (Dining, Shopping & Entertainment) Home Goods College Goods and Services Limited Opportunities College administrators seeking to work collectively with BID 4,651 student boost untapped market Store with cross-over-appeal: Barriers Commuter v. Four Year University Differing purchasing needs among students Not convenient to larger student population College Goods and Services Limited Opportunities College administrators seeking to work collectively with BID 4,651 student boost untapped market Store with cross-over-appeal: Barriers Commuter v. Four Year University Differing purchasing needs among students Not convenient to larger student population

25. College Goods and Services Limited Opportunities College administrators seeking to work collectively with BID 4,651 student boost untapped market Store with cross-over-appeal: Barriers Commuter v. Four Year University Differing purchasing needs among students Not convenient to larger student population New Rochelle: Niche Opportunities

26. Wedding Goods and Services Opportunities Concentration of Wedding Reception Venues Stationary and Tuxedo Stores Concentration of Hotels Barriers Time consuming niche to develop Market saturation along New Rochelle’s North Avenue Preferred wedding consultants and space list New Rochelle: Niche Opportunities

27. New Rochelle: Trade Area Analysis Retail Leakage Capture Rate – 15%

28. New Rochelle: Trade Area Analysis Retail Leakage Capture Rate – 15%

29. Niche Analysis Recommendations Hospitality and Restaurants/Entertainment Niche offer the greatest opportunity for growth and development A critical mass already exists in these business categories that serves to jump start the BID’s Retail Niche Attraction Plan

30. Restaurants/Entertainment Locally-based retail recruitment to improve mix of downtown dining options Fusion/Asian Ice cream or Dessert Café Sushi European Bistro The establishment should be coalesced, since Ruby’s owners has a rolodex of prospective entrepreneurs seeking to open or expand bistro enterprises in the New York City Metropolitan Area. Engaging Ruby’s could leading to an expanded list of scouting opportunities for the BID and landing a establishment the replicates a Ruby’s blueprint would affirm the Main Street districts growing hospitality sector. The establishment should be coalesced, since Ruby’s owners has a rolodex of prospective entrepreneurs seeking to open or expand bistro enterprises in the New York City Metropolitan Area. Engaging Ruby’s could leading to an expanded list of scouting opportunities for the BID and landing a establishment the replicates a Ruby’s blueprint would affirm the Main Street districts growing hospitality sector.

31. Home Goods Focus on ‘Value’ Based Home Goods CB2 Design Within Reach-The Annex Outlet Store Fishs Eddie Straight From the Crate Jennifer Convertibles Laytner’s Linen & Home Gracious Home These “value” focused retailers are prime examples of the kind of companies the BID should engage. There is a benefit of establishing a retail niche theme based on “value” that will better position the BID in being effective at retail attraction. This strategy will differentiate New Rochelle from the countless districts seeking to recruit national retailers. These homogeneous retailers are witnessing stagnation and pulling back expansion plans due to market saturation. The BID will be better apt at scouting unique one of kind retailers that place an emphasis on high quality merchandise at meaningful price points such as Fishs Eddy and Design With Reach. These “value” focused retailers are prime examples of the kind of companies the BID should engage. There is a benefit of establishing a retail niche theme based on “value” that will better position the BID in being effective at retail attraction. This strategy will differentiate New Rochelle from the countless districts seeking to recruit national retailers. These homogeneous retailers are witnessing stagnation and pulling back expansion plans due to market saturation. The BID will be better apt at scouting unique one of kind retailers that place an emphasis on high quality merchandise at meaningful price points such as Fishs Eddy and Design With Reach.

32. General Organizational Recommendations Getting the Niche Businesses Organized Establish Restaurant/Entertainment and Home Goods sub-committees Include downtown residents, property owners, developers, businesses, institutions, and other stakeholders Create yearly and monthly work plans Use this study to turn local brokers and property owners into agents of the niche strategy Convene coordinated broker tours of niche related retailers Host joint sponsored quarterly broker breakfast meetings Educate existing property owners, businesses, and downtown residents on attraction strategy

33. Immediate Programmatic Activities Engage in targeted promotion and branding of downtown niches Share business success stories with the media Coordinate positive messaging from existing business-owners Collaborative marketing efforts Consider options to “incentive-ize” the broker community Engage a consultant in targeted retail prospect identification Identify and target retailers (both national and local) whose business model is not wholly dependent on foot-traffic. Canvass local business districts for non-national retailers Prepare targeted marketing packets for each nich

34. Immediate Programmatic Activities Work with local property owners to improve the physical appearance of existing vacancies Funding should be provided for façade improvement and temporary displays in the windows of existing vacant storefronts. Promote the unveiling of these storefront displays Activate existing vacant retail space through lively and temporary arts/culture uses Provide arts organizations and local artists temporary access to vacant commercial space free of charge to create lively exhibits that can increase downtown pedestrian traffic. One such organization is Chashama <http://www.chashama.org/home.php>, led by Anita Durst

35. Immediate Programmatic Activities Allow for the flexible use of loan and/or grant funding to help underwrite niche retail expansion goals Assist niche businesses with signage upgrades, tenant-interior improvements, or rent subsidies. Improved parking signage and payment procedures Current downtown parking situation is exacerbated by the lack of clear directional signage. Customers who do patronize the current municipal lot behind Main Street complain that the payment procedure is inconvenient and the meter is poorly located, making it necessary to climb over a metal car barrier to find the quickest route to Main Street. A recent NY Times article “Wooing the Design Tenant” highlighted the high cost of rent facing design tenants (30% of budget). Districts such as Long Island City’s new Design Center have been successful with attracting tenants seeking lower rents and wanting to be clustered in the same area as retailers and designers to help keep operation cost down. All facets of the design sector (designer, wholesalers, and retailers) commingle best in close proximity. Main Street New Rochelle has a build environment that houses an ample supply of historic structures that can be converted to mixed-use buildings that are used to support a retail at street-level and upper story live-work studio space for mid-tier design tenant. In addition, Main Street New Rochelle is also convenient NYC’s larger design center that can help bolster and design tenant recruitment plan. A recent NY Times article “Wooing the Design Tenant” highlighted the high cost of rent facing design tenants (30% of budget). Districts such as Long Island City’s new Design Center have been successful with attracting tenants seeking lower rents and wanting to be clustered in the same area as retailers and designers to help keep operation cost down. All facets of the design sector (designer, wholesalers, and retailers) commingle best in close proximity. Main Street New Rochelle has a build environment that houses an ample supply of historic structures that can be converted to mixed-use buildings that are used to support a retail at street-level and upper story live-work studio space for mid-tier design tenant. In addition, Main Street New Rochelle is also convenient NYC’s larger design center that can help bolster and design tenant recruitment plan.

36. Long Term Recommendations Develop a long term parking strategy Accommodate 100,000 sq ft of new retail space Commercial lenders 3.5 to 4 spaces per 1,000 sf (up to 400 spots) New York City CBD’s 1.5 or 2 per 1,000 sf (up to 200 spots) Identify convenient parking easily accessibility to retailers front “doors” Locate new garages or surface lots on secondary streets to protect prime retail real estate Improve visual impact of Downtown Make infrastructure upgrades (streetscape) Reorient train station to Main Street New Rochelle Continue to put more “feet on the street” through upper story residential units and larger-scale housing projects

37. Long Term Recommendations Strengthen downtown arts and cultural activities Determine the feasibility of a “black box” theater Encourage artists related upper story live-work space 20 choreographers + 20 composers + 20 minute performances = OASIS 2008. OASIS is Chashama's signature festival of new performance. Chashama's 8th annual OASIS will feature original work by 40 choreographers and composers that will activate dormant storefront space @ 217 East 42nd Street, which will draw hundreds visitors to this sparse stretch of 42 Street located in Midtown Manhattan. This kind of installation should be replicated along the corridors where numerous storefront vacancies proliferate and will diminish the impact of abandonment by creating street level activity and increased pedestrian traffic to help support local retailers in the district. 20 choreographers + 20 composers + 20 minute performances = OASIS 2008. OASIS is Chashama's signature festival of new performance. Chashama's 8th annual OASIS will feature original work by 40 choreographers and composers that will activate dormant storefront space @ 217 East 42nd Street, which will draw hundreds visitors to this sparse stretch of 42 Street located in Midtown Manhattan. This kind of installation should be replicated along the corridors where numerous storefront vacancies proliferate and will diminish the impact of abandonment by creating street level activity and increased pedestrian traffic to help support local retailers in the district.

38. Recommended Niche: Hospitality Abate parking issues Create way-finding signage to better identify parking options Install lighting system and security cameras at public garage Identify hospitality-based businesses and specialty retailers Gourmet food grocer with “grab and go” take-out Causal cafes and bistros and upscale dining options One-of-kind unique boutique shops Targeted Activities Leverage the BID’s palette of promotional events such as “Taste of New Rochelle” Establish a “Prix Fixe” event among downtown cafes Engage Annual Zagat Restaurant Review and wider distribution of the BID’s “Guide to Downtown Dining” Cross promote existing arts and cultural programming with downtown restaurateurs

39. Recommended Niche: Home Goods General Recommendations: Home Goods Identify other home goods-related businesses to expand the niche Develop targeted recruitment strategy for design professionals to support upper story occupancy Targeted Promotional Activities Capitalize on the success of the “Designer Showcase” to encourage other special home goods events Brand downtown as a ”Value Based” district Create a referral system among home-goods niche

40. Blueprint for Investment Clear, concise menu of investment opportunities Matching funds for joint niche marketing Identify funds to support a “box theater” project Retail consultant for targeted prospecting Flexible loan fund in targeted area Parking signage Programming to fill vacant storefronts (street sales, window display events with local artists or local retailers, etc) Commission-based incentives for brokers who attract niche based businesses