News Analysis: More Retail Coming in 2017. Will It Be Enough?

Written by Briana Warsing. Posted in Volume 37, Issue 8 - January 7, 2017

Walking along Main Street, it’s hard to shake the ghost-town feeling created by long stretches of empty storefronts and papered windows.

Walking along Main Street, it’s hard to shake the ghost-town feeling created by long stretches of empty storefronts and papered windows. Trellis and Main Street Sweets, both of which served as unofficial meeting places for both Island and off-Island groups, are both closed. Five years after outside firm Hudson Related was hired to manage Main Street’s flagging retail scene and attract new businesses, the area still struggles to draw foot traffic and fill the empty storefronts.

Currently there are 31 retail spaces along Main Street. At the moment, five of them stand empty. Four others, including the former Trellis diner, have signed leases with Hudson Related but are not yet open.

Currently, ten storefronts stand empty along the length of Main Street between Blackwell House and PS/IS 217. Some of those storefronts have been so under-occupied that a new tenant would have to do what the Urgent Care Center did in the thrift store space, put in all new utilities. While the past year was marked by the arrival of a few new tenants – including the Urgent Care Center at 520 Main Street, CDM Kids Learning Academy at 568 Main Street, and the Paul Callendrillo Gallery at 507 Main Street, it also saw the closure of the Island’s much loved ice cream shop, Coach Scot’s Main Street Sweets, and the stalled renovations of Trellis, now closed for over two years.

Hudson Related recently announced several deals to bring additional food options to the area, including a juice bar opening this spring at 503 Main Street operated by David Nasser and Jimmy Kim, the owners of Wholesome Factory and Island Wines & Spirits. Mexican restaurant, Onda, is slated for a summer 2017 opening at two-story 548 Main Street. The Island’s branch of the New York Public Library will be moving to a larger space and constructing a modern, technologically advanced facility, also to open later this year at 504 Main Street. All three will offer much needed seating and could serve to bring Islanders back to Main Street.

The question is, will they be enough, and can they succeed?

Retail Study

Main Street’s retail problem isn’t a new one. Besides a few core businesses, retail has never “worked” on the Island. In October 2009, RIOC, which hired Planning and Real Estate consultants Phillips Preiss Grygiel, released a 54-page Main Street Retail Study explaining what wasn’t working on Main Street, namely, that Island residents did just 12% of their shopping here, that the existing retail mix on Main Street failed to capture the new market opportunities afforded by the Island’s growing affluent market, and that Main Street suffered from several “design flaws” including poor retail visibility.

To ameliorate the design flaws, the study recommended removing the glass panels from the east side of Main Street, installing additional lighting and retrofitting existing lighting within the arcade, repainting exterior facades to enliven the “gloomy” feel of the arcade, installing public art in the larger spaces within the arcade, and installing signs on the exterior of each storefront.

The study also recommended bringing in a master leaseholder to handle the marketing and leasing of retail space. This was intended to allow potential tenants to avoid the red tape of working with RIOC, and to put the leasing function in the hands of those with expertise in marketing commercial real estate.

Hudson Related

In 2011, RIOC selected the Hudson Companies and Related Companies (HR) to manage the 33 retail spaces – a total of 100,000 square feet of leasable space – on Main Street and stimulate retail development. The two signed a 40-year Master Lease. HR pays RIOC $900,000 per year (once HR gets their original investment of improvements back, they will share the rental profits with RIOC) to rent and manage the available space. When HR came in, average retail rents on Main Street were just $9 per square foot and the vacancy rate was at 50%.

The developers set about rebranding the Island’s retail area as “Shops on Main.” The renovation project included repainting storefronts and installing wood ceilings in the arcade spaces, as well as installing new lighting, signage, and custom benches. Their vision was to create a welcoming and vibrant village center. They also brought in new stores, including a Subway sandwich shop in October 2012, Main Street Sweets in November 2012, Wholesome Market in May 2013, and Island Wines & Spirits at 605 Main Street in October 2014. Soon after, retail rents on Main Street rose to an average $40 to $50 per square foot. Some longtime Island businesses signed new leases with HR and began renovations pursuant to HR recommendations, including Trellis, Gristedes, RIVAA, and newly named Bread & Butter Deli (M&D Deli). However, the increased rents also resulted in new closures. The Island lost its hardware store and the thrift store, followed by the stationery store.

Alexandra Kaplan, associate project manager at the Hudson Companies said, “Our approach to retail on the Island always starts with the same question: how can we best serve the needs of both existing Island residents, incoming Cornell Tech campus residents, and visitors in a way that all their day-to-day needs will be met on the Island itself.”

Desired Retail Tenants

Now, at the opening of 2017 – following years of renovation, marketing, and turnover – the remaining question seems to be, what sort of retail tenants will Islanders support? And can any of them draw the foot-traffic needed to finally jumpstart Main Street?

The 2009 retail study identified a list of potential businesses most appropriate for Roosevelt Island’s Main Street. Listed in order of desirability, they were: Green Grocer, Ice Cream Shop, Specialty Cheese Shop, Seafood Store, Bakery, Pizzeria, Florist, Restaurant, Butcher, and a home furnishings store.

Wholesome Market soon came on the scene as the green grocer and Main Street Sweets as the Island’s ice cream shop. The other recommendations are interesting because several have been attempted on the Island. We’ve had a seafood store and we’ve had a bakery. (Who else remembers getting warm bagels on weekend mornings?) Neither succeeded. There was a pizzeria, with a large seating area, and bar for many years in Wholesome Market’s current location. We also had a florist, which failed to recover after a fire. Even our ice cream shop, four years after answering the Island’s call, called it quits.

As for HR’s perspective, Kaplan says, “We’re really focused not only on delivering core services, but providing some variety. The opening of Cornell Tech will help boost the Island’s vitality by bringing in residents who will be there during the daytime. We look forward to leveraging the increased foot traffic to attract both traditional tenants as well as pop-ups like the existing Paul Calendrillo Gallery.”

Perhaps the real question is whether Islanders truly know what they want, and if there is another, more effective, way to give it to them.

Tags: real estate Briana Warsing Retail Island Life

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