ECONOMIC IMPROVEMENT
Northeast cities attract developers and revitalize towns.
Luci Cason

Northeastern cities are filled with new projects and plans for future development. Northeast Real Estate Business recently talked with economic development organizations around the Northeast to discover how they entice companies to locate in their cities and to find out what developments are underway or planned.

Stamford, Connecticut Retail and residential development is booming in Stamford. The Marriott Courtyard hotel is nearing completion in the downtown area of Stamford, Connecticut. “We’re going through a phase in the downtown where it is becoming more of a living/entertainment/ retail area again to complement the large corporate relocations that have occurred here over the last 15 to 20 years,” says Michael Freimuth, director of the City of Stamford’s office of economic development. Stamford-based Stillwater Corporation broke ground in June on a 92-unit condominium complex called Riverhouse that will be available for occupancy mid-2005 and Stamford-based Ceebraid-Signal is currently planning High Grove, an 83-unit luxury downtown condominium complex. “On the retail front, there is a lot of activity in the downtown core,” says Freimuth. A 120,000-square-foot Burlington Coat Factory is currently under development as is a 164,000-square-foot, five-story Target. Both stores are scheduled to open this fall. The Grayrock Place project will bring about 150,000 square feet of new retail topped by 150 housing units. Also in downtown Stamford, Freimuth says there are plans for a 500,000-square-foot retail complex in Parcel 38, an urban renewal area. And although he notes that Stamford’s office market is slightly stagnant, Freimuth says that the financial services industry is still growing in the city. “We are seeing brokerages, high-end hedge funds and financial services outlets being attracted to the city, primarily because we are around 30 minutes via express train from Manhattan,” he says. “The general office market has been weak, but there are signs of it coming back, especially in regards to the service industries. We are seeing some medical/wellness center growth as well.” A five-story, 164,000-square-foot Target, is currently underway in Stamford, Connecticut. Attracting such companies to the area are property and corporate income tax breaks for businesses locating in the city’s enterprise zone, a low-income area south of the Interstate 95 corridor that is currently going through renewal. Right now, says Freimuth, the city’s primary goals are dealing with housing and transportation issues, which have dogged the city as its residents battle congestion on I-95 and Merritt Parkway. “There is a tendency for companies to look further east to get closer to the housing stock, which is further up in Fairfield County,” says Freimuth. “We believe that we can provide the housing here,” he says, noting Stamford’s strong transportation link to New York and the attractiveness of its waterfront properties to developers and residents. “The combination of those two things will help us build a good housing stock,” says Freimuth. “It’s unique, urban, high-end housing near water, but it is also an opportunity for the workforce to be closer to their workplaces.”

Freeport, Maine Freeport, Maine, benefits from its status as “the home of L.L. Bean.” Approximately 3.5 million people visit the city each year. Developers are capitalizing on the tourist environment with a new hotel and conference center, and playing on the momentum, the Freeport Economic Development Corporation is planning an office/business park in the area. With only 7,800 people, Freeport may not have many residents, but the 3.5 million visitors that come to the home of L.L. Bean each year provide a more-than-adequate customer base for hotels, restaurants and retailers looking to locate in the area. Hilton Gardens has broken ground on a hotel and conference center in the city, adjacent to Freeport’s renovated former town hall, which will become a train station. Linda Hardacker, executive director of the Freeport Economic Development Corporation, says that the city expects Amtrak service in the station by 2007 or 2008 and may even see an excursion train this summer. The Freeport Economic Development Corporation is currently planning an office/business park area for technology and engineering firms. “We are looking at possibly developing a cluster of technology and business firms,” says Hardacker. “We are receiving calls from potential clients.” Hardacker says the city is currently working on branding itself not merely as an outlet center but as a destination in itself. It also has several strategic plans in place for economic improvement. “One [plan] is called Vision 2010 and that focuses on the village area, the downtown. Then we have strategic plan guidelines for Route 1 south and we also have a transit plan,” she says. Freeport’s working harbor is also a tourist attraction — visitors enjoy lobster rolls on the pier. Working with developers and property owners, the Freeport Economic Development Corporation sets up prospect visits and meetings with other successful businesses for developers to discuss the benefits of locating in Freeport. Some of these benefits include its direct highway access and proximity to Portland, along with “the Freeport name itself and the fact that we are the home of L.L. Bean,” says Hardacker. “Unlike a lot of other communities that are trying to revitalize, we are still a very vibrant retail and business community,” she says. “We’re preparing for more development, but without compromising the historic quality and look of the town,” says Hardacker. “We are looking way ahead at keeping Freeport invigorated and diversifying our tax base, while keeping what makes Freeport, Freeport.”

Waterville, Maine The riverfront town of Waterville, population 16,000, is looking to revitalize its waterfront property. Currently in the planning stages, the 15-acre Head of Falls riverfront development could add restaurants, office and retail to the area. “We hope to have a developer come in sometime in the fall and start proposing small-scale commercial developments,” says John Butera, executive director of the Central Maine Growth Council, which focuses on Waterville and the neighboring communities of Oakland, Fairfield and Winslow. “We have a master plan with conceptual ideas of what we want, but we are flexible,” says Butera of the development, which will tentatively include about 150,000 square feet of retail space and an open green space with an amphitheater, public walkways and trails. “The infrastructure is going in as we speak. It’s something that I think is going to enhance an already vibrant downtown.” Says Butera of the need for revitalization, “If you look at the old industrialized Northeast cities, they were at one point thriving downtowns on the waterfront. Over the years, they’ve all kind of taken their hits. And now, with people talking about sprawl, many places are trying to refocus energies back to the traditional core of the city.” In southern Waterville, off Interstate 95’s exit 127, a unique business park, FirstPark, is currently being built out. Twenty-four local towns, known as the Kennebec Regional Development Authority — an entity created by the Maine state government — are the owners of this 350-acre high-tech business park that includes wooded areas and jogging trails. The towns shared the cost of purchasing the land and providing services, and share in the revenues from properties sold and tax revenues collected. Accounting firm Perry, Fitts, Boulette and Fitton moved into FirstPark’s first building, a 25,000-square-foot office building, about 18 months ago. In June, L.L. Bean announced that it will build a 50,000-square-foot call center in the park. Currently occupying space in a Waterville strip center, the move and expansion will add about 100 to 150 employees to the call center and convert many part-time employees to full-time. “It really is a testament to the workforce that we have for that particular type of industry in this region,” says Butera of the L.L. Bean announcement. A readily available workforce is just one of the benefits of locating in Waterville, he says. “We can offer a cost and labor environment that we think is very suitable for business success,” he says, noting that the area is currently attracting customer-service entities.

Albany, New York Albany s Central Business Improvement District is looking for a few good retailers. The third, and newest, of the city s business improvement districts, the Albany Central BID was started 6 years ago as part of the Capitalize Albany Plan, with the goal of reviving the state capital s Central Avenue corridor, a 3-mile, six-lane stretch of road in the city s center. Currently, the Albany Central BID is trying to interest both large-scale and neighborhood service retailers to develop in the area. ¿What we re seeing is that, as a result of other large development projects that are occurring around us, developers who are coming to Albany and hearing about what s going on are buying up parts of our under-developed Central Avenue corridor for speculative development, which is very exciting for us,î says Anthony Capece, executive director of the Albany Central BID. Without mentioning specific retailers or developers, Capece said that the district has received interest from several big-box retailers and entertainment venues that ¿are speculating right now and doing research in the area.î He notes that Albany s Central District is also interested in neighborhood and ethnic markets and restaurants, ¿not necessarily large-scale franchises, but mid-size franchises on a regional level.î Right now, much of Central Avenue is underserved by retailers, despite its prime location in the state s capital, the density of a very strong customer demographic and direct freeway access. The corridor has one of the strongest traffic counts in the Albany region, both in automotive and public transportation. ¿As far as customers Ü they re here,î says Capece. ¿But, the consumers that are here are actually going elsewhere to spend their money. They are going outside the city limits and other parts of the city because there s no retail here in the sense of what they re looking for. So we re actively trying to let retailers know that those dollars are easy to obtain and are right at their doorstep.î One portion of the Central Avenue area, the more suburban West End, has already seen significant development from car dealerships, restaurants and retailers like The Home Depot, Price Chopper, Hannaford s, Friendly s, McDonald s and Burger King. The paradox, notes Capece, is that the more urban and residentially dense portion of Central Avenue, where many potential consumers also spend their days working, is still underserved. And despite a 60 percent drop in vacancy rates over the last 6 years, Central Avenue s dilemma, says Capece, is that the storefronts available in its urban portion are too small for many retailers. ¿We know that we have properties that don t serve the current needs of both office and retail at the urban center of our district,î he says. New York s state government has taken several Central Avenue properties and remodeled them into 30,000- to 80,000-square-foot offices to house entities such as the Department of Labor and Department of Parole. ¿We have this problem that we re next to these giant office buildings and what we have to offer is one-story high, 800-square-foot storefronts,î says Capece. ¿For the next 5 or 10 years, we are going to be challenged by the fact that we will have demand, but will need to develop properties to meet retailers infrastructure needs. That s a huge nut to crack as far as redevelopment of existing real estate.î

Taunton, Massachusetts Taunton, a city of about 56,000 people, seems to be a well-kept secret that residential, hotel and retail developers are becoming more aware of every day. With nearly 50 square miles of land and direct highway access, the city is steadily being filled up with commercial development. Liberty Union Industrial Park is currently underway in Taunton, Massachusetts. “Our location is perfect. We are just off Route 495 where Routes 44, 138 and 140 all intersect and come through Taunton,” says Diana Shearstone, president of the Taunton Area Chamber of Commerce. “That’s always been an asset for us. We’re the hub of southeastern Massachusetts.” Two buildings are currently under construction at the new 350-acre, 2.5 million-square-foot Liberty and Union Industrial Park in Taunton, at the junction of Routes 140 and 24. One of the buildings is a 74,492-square-foot office, production and distribution complex for Super Coups, a direct mail marketing services company; the other building, which totals more than 1 million square feet, is a warehouse, corporate office and distribution center for Jordan’s Furniture Company. Super Coups and Jordan’s Furniture will be the first tenants to occupy the park, which is being developed by the Taunton Development Corporation. On Route 140 in Taunton, Smokey Bones and The Olive Garden restaurants are in the planning stages by Land Development Northeast. And, supermarket Hannaford’s, which is new to the area, has announced plans to begin construction on a site off Route 44. In the Route 44 area of neighboring Raynham, a Lowe’s is being built at the junction of 44 and 24 and Bed Bath & Beyond recently announced that it will take the space formerly occupied by Kmart in a strip mall on Route 44. There’s a new Hampton Inn hotel coming to Route 44 in Raynham and an existing Courtyard by Marriott there is adding 21 rooms. “Residential development has also taken off in the area. The market doesn’t seem to have felt any impact of an economy that’s not exactly perfect right now,” says Shearstone, noting that workers who commute to and from Boston and Providence choose housing in Taunton because of its low price and the fact that its municipal lighting plan helps keep utility costs low. So, what’s next for the Taunton area? “I think like any other community, we want diverse developments,” says Shearstone. “Our downtown Heart of Taunton organization is going to start strategizing on how it might appeal to a variety of different businesses to add to the mix we already have.”

Philadelphia With one of the highest populations in the United States and more than 300,000 workers passing through downtown Philadelphia each day, it’s no wonder that about 4,000 residential units have been added to Philadelphia’s downtown over the last 5 years. Philadelphia is planning to expand its convention center in a few years. The center, which was built in 1993, will be expanded to almost double its current size. The center hosted the Republican National Convention in 2000. Photo by K. Jensen for Greater Philadelphia Tourism Marketing Corporation “There’s a huge movement back into the city from empty nesters and young people. There’s a lot of high-end condominium and townhouse construction in the downtown area with million dollar price tags not uncommon,” says Peter Iacovoni of Philadelphia’s Department of Commerce. “A lot of older office space buildings have been converted into rental or condominium projects.” Expected to open early fall, the St. James, a 47-story apartment building developed by Philadelphia-based P&A Associates, is under construction on Washington Square. Incentives, including a 10-year tax abatement, have spurred development in the city. Additionally, The University of Pennsylvania, one of the largest employers in Philadelphia, has created a program that offers low or no down payment financing for its employees in the downtown. “If you’re going to develop a new building or even enhance an older building, you get the tax abatement,” says Iacovoni. “That’s induced a lot of people to invest here.” Upscale retailers, such as Kenneth Cole and MAC Cosmetics, are attracted to the downtown because of its high-income demographic and high traffic. “Downtown Philadelphia has always had a history of high-end residential districts adjacent to the business districts,” says Iacovoni. “Now we’re just enhancing what was already here over the years.” One of those enhancements will be the expansion of the city’s convention center, which was built in 1993 and hosted the Republican National Convention in 2000. The expansion, which recently garnered approval from the state’s Senate, will almost double the size of the center, but it is still several years away. In the meantime, Iacovoni and the city will continue to try to attract development, especially from the biotech industry. “We’re really trying to enhance the biotech industry that is so big in our region and which has made us somewhat recession-proof. We did not have major job losses during the recession,” he says. “The city had slight job losses, but the region really didn’t lose jobs at all; we actually had slight job growth. We attribute that to the fact that our largest employment sectors are pharmaceuticals and the biosciences.” The almost 50,000 students that graduate yearly from the region’s 89 colleges and universities will continue to provide an educated employee base for those companies willing to locate there.

New York City One of the goals of New York City’s current administration is to create and enhance business districts outside Midtown and lower Manhattan, and the New York City Economic Development Corporation (EDC) is working toward this goal. “We find developers for under-used properties to make them more productive,” says Janelle Patterson, spokesperson for the New York City EDC. “We have segments at EDC that work with companies to help them develop, grow and expand in the city. We can help them get tax-exempt bond financing and we can also give sales and real estate incentives for capital projects.” Andrew Alper, president of the New York City EDC, says, “One of the priorities is to attract businesses that might need to diversify their operations or need cost effective space for back office staff.” The EDC’s planning division, as well as other city and state agencies, has created plans for revitalization, increased employment and stimulated growth in several New York City areas. The plan for downtown Brooklyn could create as much as 5.4 million square feet of new commercial space and about 1,000 housing units, as well as a mixed-use cultural district with new library, theaters, galleries and other cultural venues. Similar plans and projects are going on in all five boroughs. “We are working to create or improve business districts in all five boroughs, to make them places where businesses want to locate, people want to live and tourists want to visit,” says Alper. Hudson Yards is a long-neglected, 59-block area of Manhattan that EDC, with the help of private investors, is looking to transform into a transit-oriented, pedestrian-friendly, urban central business district with office, hotel, entertainment, exhibition and retail space accessible to and integrated with Midtown. As part of the plan for Hudson Yards, the city could expand The Javits Convention Center and the Passenger Ship Terminal. “The Javits Center is the 18th largest center in the country,” says Alper, “But, while other cities have expanded capacity, we are losing market share. By expanding Javits, we can easily create more economic value.” An upgrade of the Passenger Ship Terminal (PST) could prove worthwhile. The terminal, which 1.4 million passengers are expected to pass through this year, contributes $800 million to the city’s economy. “PST is in dire need of upgrades and renovations. It is not adequate to accommodate the growing number of travelers or modern cruise ships,” says Alper. “By upgrading, expanding and modernizing our facilities we will ensure that the growth of the industry continues.” In the Charlestown area of southern Staten Island, the EDC, on behalf of the city, recently selected Charleston Enterprises to develop the $64 million Charlestown Bricktown Retail Center, which will include The Home Depot, Target and Bed Bath & Beyond. In the Bronx, the city and The Related Companies recently reached an agreement for Related to lease and operate the 26-acre Bronx Terminal Market while it finalizes plans for development of The Gateway Center at the Bronx Terminal Market. The $300 million Gateway Center will include 1 million square feet of retail space, waterfront esplanade and public open space. The Bronx Terminal Market, originally constructed in the 1920s and currently home to several food wholesalers, has deteriorated over the past 30 years. Related’s development plan will begin in about 2.5 years and be complete in 2008. In June, the EDC announced a new development plan for downtown Flushing. Based on The Downtown Flushing Development Framework, the plan outlines a land use planning strategy for downtown Flushing, the Flushing River waterfront and the Willets Point peninsula. The plan also aims to improve the city’s traffic network, revitalize its riverfront and connect the downtown area with amenities in neighboring areas, such as Corona Park, Shea Stadium and the Queens Botanical Garden. Streetscape enhancements will begin this summer. This fall, a developer will be chosen to redevelop a 5-acre municipal lot into a mixed-use town square.

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