DANTH News
Volume 10, Number 1 July 2005
THE BAYONNE TOWN CENTER IS STRONG
AND WILL BE EVEN STRONGER
by
N. David Milder
June 24, 2005
People Like The Town Center
Today, as many local downtown areas struggle to attract foot traffic, the Bayonne Town Center is bustling with shoppers. “Over the last year I have visited several downtowns in New Jersey,” said Cathy Jakubowski, district manager. “Most of them — Maplewood Village, downtown Cranford and Englewood — don’t
have anywhere near the pedestrian traffic we have in our town center.” Look at the flow of pedestrian traffic even on Sundays.
Well-known developers and commercial brokers comment on its strong foot traffic when they visit.
Shoppers are drawn to the shops on Broadway and nearby streets because they are convenient. The Bayonne Town Center is easy to reach on foot, by bus or on the Hudson-Bergen Light Rail line. For those who drive, the Town Center is no more than a 10-minute trip and it has 736 metered parking spaces on Broadway or within a three-minute walk of the heart of the district.
People also come because retailers have many of the things they want. Shoppers are attracted by the district’s retail chains, e.g., Mandee, Joyce Leslie, Foot Locker, Avenue, GNC, Radio Shack, Rite Aid, etc. Outside commercial brokers often comment that for a district of its size, the Town Center has a lot of retail chains. And shoppers are also attracted by many family-owned shops, including Benanti’s, Barney Stock, Irwin’s and Victoria Appliances that have been serving the local community for decades.
The District Has Strong Niches And Niches That Can Become Stronger
Many people come to the Town Center because of its strong niches. Niche development and maintenance are forms of economic specialization. Most successful downtowns have been built upon the strengths of at least two or three economic niches The more niches a downtown has, the more reasons it provides for people to visit and the greater the likelihood that their trips downtown will be “multi-purposed.” Multi-purposed trips are critical for a downtown’s success.
When a downtown niche has many attractive shops it can potentially serve as a specialized shopping center, capable of providing the consumer with a large choice of merchandise and price within its specialized product area. As a result, strong niches function as destinations that can draw customers from a fairly wide geographic area.
Three of the Town Center’s strongest niches do not involve retailing and consequently they do not compete with big box operations. Instead they are based on food consumed away from home and service operations. These niches are:
· Pamper Niche. This niche, containing 33 businesses, is based on personal services such as gyms, spas, hair salons and nail salons. Many of these operations -- e.g., The Forum Fitness Center, European Day Spa, Dolphin Fitness, Latin American Hair -- are very popular and they draw lots of people to the Town Center from Bayonne and beyond. Some towns look down on such operations and fear their monopolization of downtown commercial spaces. For example, Nutley and Maplewood have recently enacted ordinances that forbid nail salons from opening within 500 feet of each other. However, in a number of other commercial districts, as diverse as downtown Beverly Hills and the Bayonne Town Center, these operations function as strong destination niches. They anchor the district by generating customer traffic that nearby retailers also can tap. Furthermore, nationally the demand for such personal services has seen very strong growth. According to the Census Bureau, between 1997 to 2002, revenues from hair, nail and skin care services jumped by 42 percent nationwide. Revenues from "other personal services" increased 74 percent over the same time period. This niche should be marketed not because it is weak, but because it is so strong and has the potential to draw even more customer traffic from outside of Bayonne.
· Restaurants and Eateries. There are 31 businesses in this niche that range from fast food operations to white table cloth sit down restaurants. A number of these operations --e.g., Benanti’s, San Vito, Big Apple, Café Olé -- have strong reputations both within Bayonne and beyond
· F.I.R.E. Niche. This niche is based on businesses in the financial services, real estate and insurance industries. It is anchored by 10 bank branches -- about half of those located in Bayonne. F.I.R.E. service activities are traditional functions for a central business district.
Another very strong niche is Kid’s Row, with 21 shops. It contains operations in such diverse categories as apparel, toys, bicycles, martial arts, learning centers and eateries. Recently, this niche was further strengthened by the opening of the Children’s Factory Outlet.
There are three other niches in the Town Center that can be strengthened and grown with effective marketing and recruitment programs. They are:
· Jewelry Niche, with 8 shops.
· Apparel and Accessories, with 16 shops. This niche has a number of national and regional chains in it that know how to market and merchandise.
· Happy Home, with 44 stores, that is structured around the concept of goods and services that make the home beautiful, comfortable and entertaining. It is a synthetic niche, including a diverse array of shops in such areas as communications, florists, home improvements, gifts, collectables, entertainment, amusements, and books. With 9,000+ new residential units expected in Bayonne over the next decade, local demand for the goods and services provided by the firms in this niche should be very substantial.
Businesspeople Like Us
Many savvy businesspeople, both newcomers from out-of-town and those who are already operating here, believe so strongly in the Town Center’s future that they are making substantial investments in the district and abutting properties. City and State agencies have also made substantial investments in the Town Center. More private sector investment is in the pipeline:
· The City of Bayonne has invested over $ 3 million for streetscape improvements in the Bayonne Town Center.
· The 22nd Street Station on the Hudson Bergen Light Rail line has opened and now has over 1,100 boardings daily.
· Kimco Realty, the nation’s largest owner of neighborhood and community shopping centers (totaling over 100 million SF) has purchased 21,000 SF of retail space on Broadway.
· Some of the businesses that have opened recently are: Children’s Factory Outlet, Punjab Palace, Price Tag, Subway, Incredible Edibles and Unique Books. Poppa John’s Pizza is under construction and Dunkin Donuts just signed a lease.
· Rose & Rose, Bayonne Karate for Kids and Color & Cuts have had significant expansions that have required considerable investments in interiors and/or facades
· Price Tag and Punjab Palace did extensive internal renovations before opening
· Kodak Jewelers, Victoria Appliances, The Big Apple, Turtletaub & Turtletaub, and Towne Kitchens are in the process of having their facades improved
· A recent Investment Conference attracted over 100 people who were interested in investment opportunities in the Town Center. Several interviews and in-depth tours have followed
· 477-481 Broadway has been purchased by a development group that currently is having architectural plans drawn for a building with ground floor retailing and residential units above.
· Sound City built a new, mixed-use building on Broadway.
· The City of Bayonne has designated a 6.5 acre site as An Area In Need Of Redevelopment. A substantial mixed-use project, driven by residential units, is expected to draw major retailers to this site.
· The Alessi Organization’s has completed a new apartment building on W.25th Street, next to McDonald’s, that has 51 market-rate units.
· Across the street, The Forum Fitness Center is doing a big expansion
· Plans have been approved by the City for the vacant lot at 536 Broadway for a structure that will have three floors of residential units over ground floor retail
· .A former furniture warehouse on E.18th Street, that is attached to Dolphin Fitness, is being rehabilitated into a residential structure having six loft units.
· Rehabilitation work has started on the building that Broadway Dollar is located in that will result in proved residential units and a more attractive façade
The City and the BTCMC Have Developed A Wide Array of Programs to Make the Town Center Stronger
Niches
· Two articles in Bayonne Magazine featured, in narrative form, the Town Center’s Kid’s Row, Pamper, Restaurant and FIRE niches. The Bayonne Magazine provides an extremely attractive way of getting niche “infomercials” to people living in Bayonne and along the HBLR corridor
· There were also Jewelry Niche ads in 2004 and 2005 for Valentine’s Day in the Jersey Journal and the Bayonne Community News
· The BTCMC, supported by funds from the Bayonne UEZ, is working with Ehrbach Communications to develop unique niche print ad templates
· The Bayonne UEZ has provided the BTCMC with funding to start a three year niche advertising campaign that will focus on the niches that are most likely to be impacted by the retail growth occurring along Rte 440, on the Peninsula and in Jersey City and on Staten Island. The ads will typically appear in the Bayonne Community News. It is anticipated that over three years a significant amount of UEZ funds will be matched by advertising expenditures by Town Center merchants. The first ads from this campaign are expected to appear by the end of August 2005, in time for the “back to school” season.
· Later in the next fiscal year the BTCMC will begin to organize niche advertising programs for the Restaurants and Eateries and Pamper niches. For these niches cable TV ads may be more effective and elicit greater merchant participation.
· Because so many large corporations are involved in the F.I.R.E. niche it may be difficult to organize them in a coop advertising campaign. The BTCMC may use ,instead, corporate sponsored print infomercials to market this niche.
Establishing the Town Center as the City’s Central Social District
Across the nation, many downtowns have successfully revitalized themselves and withstood the competitive pressures of super regional malls and big box power centers. More are doing so everyday. One of the keys to their success is that they establish themselves as their community’s Central Social District (CSD). CSDs have large entertainment and cultural components and attractive public spaces. They become the special public place in town where everyone comes to spend quality time with their loved ones. They are also places where people go to see and be seen and where the principal entertainment is people-watching. Retailing is not the main traffic generator, but benefits from the traffic generated by the CSD functions.
The BTCMC has taken the following actions to establish the Town Center as a CSD:
· A campaign to brand the Town Center with the tag line “We’re the heart of Bayonne.”
· Holiday promotions
· Mothers Day and Fathers Day promotions
· Historical walking tours
· Classic Car Show
· Film festival with funding from the Bayonne UEZ
· Kids Row niche marketing with funding from the Bayonne UEZ
· A sidewalk cleaning program to make our district inviting to families and shoppers (the operation of this program will be shifted to the UEZ)
To further strengthen the Town Center’s CSD role in the short-term, the BTC, in addition to improving existing programs, should:
· Open a Farmers Market in the Spring of 2006
· Develop a restaurant marketing campaign
· Find locations for clubs, such as the one started for the model railroaders, within the district, to operate and hold events.
· Develop a program of outdoor concerts that would be held on the largest municipal parking lot
· Explore utilizing for key events venues that either abut the district or are within easy walking distance of it. The Catholic War Veterans and the polish American Home are examples. Many of these venues, though outside of the legal boundaries of the Town Center, on a socio-economic level are functionally related to the district.
Help Town Center Merchants Become Stronger Competitors
There is a lot that district merchants can do to effectively improve their competitive positions -- and there will be time for them to do it. The BEDC and the BTCMC certainly will be there to help them.
Local retailers also can help themselves by:
· Making their store facades more attractive. A lot of shoppers feel that if a store’s facade looks unappealing, the merchandise inside also will be distasteful.
· Improving their merchandising. Retailers need to offer appealing merchandise that their customers really want. And the merchandise should be presented in an attractive manner. Crowded aisles, hard-to-find merchandise, unfolded apparel thrown into bins, etc., will not help them compete with the big boxes!
· Strengthening their marketing efforts. To compete, it is essential for the retailers to know their customers, to reach out to them through effective advertising and promotions and to develop a lot of repeat business.
The existing programs to help district merchants are.
· The City has a generous incentive program, available through the Office of Community Development that enables most Town Center businesses to get up to $10,000 for façade improvements. Those on a corner can get $15,000
· The BTCMC’s Jump Start program works with the businesses in the early stages of façade improvement providing them with an architectural rendering, costs estimates and samples of materials and colors so the business operators are ready when they apply for the City’s incentives money. In its first year, it helped five businesses
· The BEDC has a technical assistance program that can help district merchants form effective business plans.
The BTCMC and the BEDC are working on a number of projects aimed at improving the ability of district merchants to compete and successfully drawing resources from various city and state agencies to support them. Some examples are:
· Facades. The Bayonne UEZ has just provided funds so the Jump Start program will expand within the Town Center and also will be made available to merchants located on other parts of Broadway. The program can now help 10 more businesses within the district and 10 businesses that are located in other parts of the city
· Marketing and Merchandising Skills. The UEZ has just approved funds requested by the BEDC to sponsor workshops on the topics of marketing and merchandising for merchants in the Town Center and Bergen Point Village. All of the merchants attending the workshops will get free telephone consultations for one year from the experts giving the workshops. Three of them will also be selected for special, intensive on-site assistance. If these workshops prove successful-- as expected-- then the program will be repeated and expanded
· Merchant Niche Marketing. The BTCMC’s niche marketing program, which was described above, provides a number of inducements that make it much easier for district merchants to advertise. For example:
-- It reduces the costs by as much as 50%
-- The ads are in full color
-- The BTCMC manages the overall advertisement, so the ads are almost “turnkey” for the merchants
· Coop Advertising. The BTCMC also has started a program of cooperative (coop) ads for such holidays as Christmas, Mothers Day and Fathers Day in which local merchants receive benefits similar to those derived from the niche ads. The coop ads have gained increasing popularity among the district’s merchants. For example, the BTCMC’s 2004 Father’s Day had 18 participating merchants; the 2005 ad had 60!
· Store Hours. In the region, 30% of comparison shopping trips occur weekdays between 5:00 PM and 9:00 PM, while only 20% occur weekdays between 9:00 AM and 5:00 PM. Consequently, the BTCMC will seek to enlist district merchants in an effort to extend store hours. The BTCMC’s first objective will be to get merchants to stay open late -- until 8:30 or 9:00 PM -- on Thursday nights. Once this objective is achieved, expansion to another evening will be explored.
Redevelopment
The City and the BTCMC have taken the following steps to stimulate redevelopment within the district:
· The designation of An Area In Need Of Redevelopment by the City for the Town Center project
· The authorization of a Scattered Site Redevelopment Area Study Area by the City that includes sites within the district
· The completion of a revitalization strategy for the Broadway Corridor under the direction of the BEDC
· The BTCMC and BEDC have given tours to developers and savvy commercial brokers to test market sites and obtain information about project concepts for the Town Center project
· Convened an investment conference that drew over 100 people and created a buzz among developers. It focused heavily on the Town Center project area and other sites in the district
· The BTC’s website has been expanded to include more economic development pages that includes information on recent projects and investments and also will soon list available commercial spaces for rent and properties for sale
· The BTCMC networks with developers and commercial brokers at events operated by the Urban land Institute and the International Council of Shopping Centers to stimulate interest in Town Center redevelopment opportunities
· Marketing investment opportunities in BTCMC’s articles in the Bayonne Magazine
· BTCMC makes presentations about the district’s redevelopment opportunities at events sponsored by Downtown New Jersey and NJDOT
· The BTCMC works with developers to help them improve their project teams so they will be more like the type of developer we need for our development projects
· The BTCMC meets with local landlords to assess their interest in redeveloping their properties and to help them through the process
· The BTCMC and the BEDC established linkages to the Community Preservation Corporation, a source of low-cost mortgages for redevelopment projects that have a significant housing component
· The Jump Start Façade Improvement Program, recently expanded with Bayonne UEZ funding can help stimulate existing merchants to improve their facades
· The City’s façade improvement program can offer small, but still meaningful financial incentives to new retail tenants.
These action steps are planned in the near future;
· For the Town Center project:
o Adopt a formal name for the project
o Issue a Request for Qualifications to developers
o Designate a developer for the project
o Adopt a redevelopment plan for the project
o Start land acquisition and a relocation program
· Use the Scattered Site Project and the LHRL to “encourage” or force problem landlords to improve their properties
· Create the needed incentive program for internal retail space rehabilitation projects that cost under $750,000.
· Continue to talk to local landlords and outside developers about redevelopment opportunities in the Town Center
Over a longer term, the following action steps are being explored:
· Identify potential sites for more moderately-sized redevelopment projects and then:
o Include them in the City’s Scattered Site project
o Market them to developers
o Develop an incentive package for such projects
o If necessary, go through the LRHL process
· Identify another potential site for a large redevelopment project and then initiate the LRHL process starting with having it designated as An Area In Need of Redevelopment.