Hartford Business Journal

12 Hartford Business Journal • February 2, 2015 www.HartfordBusiness.com said Farmington retail broker Jeremy Felt. "To be successful over the long-term, the program needs these stores to stick around." Given that two of the program participants have permanent downtown locations — let- terpress studio Hartford Prints! on Pratt Street and pet store Naturally Cats & Dogs on Trum- bull Street — and more than 10,000 people came downtown to either shop at the three stores or participate in their events, city lead- ers say the program was a success. "It was a pilot program that made people feel very excited about Hartford," said Kristina New- man-Scott, director of Hartford's Marketing, Events, and Cultural Affairs Division. "Even if we had just one store open up permanently downtown, it would have been a success." But, with the $160,000 gone and the state Department of Economic & Community Devel- opment unlikely to offer additional funding to keep the program alive, the city is trying to fig- ure out what to do next to bring more retail into downtown, Newman-Scott said. Hartford's retail vacancy rate was 13.7 percent in July, which was actually down from 18.5 percent two years earlier, accord- ing to retail service provider KeyPoint Part- ners. But downtown has historically had a harder time attracting and keeping small shops open. Just recently, Jojo's Coffee Roast- ing Co. on Pratt Street announced it was clos- ing its doors after 15 years in business. One idea under consideration is giving tax rebates to landlords that incubate the types of mom-and-pop shops and local startups that participated in iConnect, Newman-Scott said. This proposal would address one of the main problems iConnect faced: downtown landlords who didn't mind their storefronts remaining vacant, Newman-Scott said. "Some landlords downtown aren't that friendly to retail," said Bob Marshall, owner of Naturally Cats & Dogs, who couldn't display a sign for his business at his original 100 Trum- bull St. location, which he eventually vacated. In his search for new space, Marshall said some landlords weren't open to the possibil- ity of flexible rent or security deposit rules. He eventually settled on a nearby location at 10 Trumbull St. Marshall declined to disclose his current rent. Martin Kenny, who owns the 100 Trumbull St. residential-retail building, said he agreed to Naturally Cats & Dogs' subsidized rent for a limited time to see if a pet store could earn enough revenue to pay the regular $1,550 rent for 1,100-square-feet of space. But the pet store couldn't make ends meet. Still, Kenny said he was glad he participat- ed in the iConnect pro- gram. His Trumbull on the Park complex is pet-friendly, and Kenny said he wanted to provide an amenity for his residents. "Now that [Natu- rally Cats & Dogs] has settled into a new space [nearby], they still are providing that amenity we pre- viously didn't have," Kenny said. tough bargaining After receiving subsidized rent in the XL Center on Trumbull Street, Hartford Denim Co. considered leasing the space without a subsidy, but couldn't afford it. The monthly rent land- lord Northland Investment Corp. proposed was equal to all of the revenue the clothing maker earned during its 10 months at the location, said Dave Marcoux, Hartford Denim's co-founder. Marcoux didn't disclose the exact figure. "Hartford isn't too much of a retail cul- ture," said Marcoux. "The iConnect program tried to bring that back, but it is going to take more than that." Hartford Prints!, which was open longer and for more hours under iConnect than Hartford Denim and Naturally Cats & Dogs, had a better experience with Northland, said Rory Gale, the company's co-founder. Although it took some hard negotiating, the letterpress studio was able to convince North- land the benefits of having retail on the ground floor of 42 Pratt St., which is occupied by com- mercial and residential tenants in upper floors, said Gale, who declined to disclose the shop's rent. "It wasn't easy, but with dedication, we were able to make them see the value of us staying here," Gale said. "You need to have retail loca- tions to make the buildings appealing to busi- ness operators." The difficulties iConnect participants had with their landlords is indicative of a larger problem in downtown Hartford, Felt said. Landlords want their upper floors filled with commercial and residential tenants but don't care as much about ground-floor retail, pre- ferring, in some cases, to declare losses on their tax returns. For example, the majority of the ground-floor locations owned by Northland in the 36-story Hartford 21 skyscraper remain vacant, despite the relative luxuriousness of the apartments and the prime location by the XL Center. "How they can't get someone to lease real estate there is just flabbergasting," Felt said. "Landlords are difficult to work with." Northland declined to comment for this story. Martin, whose 100 Trumbull St. retail space is 86 percent occupied, said more downtown landlords need to fill their ground-floor spaces because it gives resi- dents and businesses on the upper floors more reason to work and live there. "If there is a business plan that works for my space, I want them," said Martin, whose only vacant retail location is the space previously occupied by Naturally Cats & Dogs. "The worse thing I can do, though, is get a business involved in a long-term agreement where they are spend- ing all kinds of money they don't have." Need for foot traffic The retail market also is an issue, Felt said. Of the retail shops that are downtown, most are either in subsidized locations like Front Street, or have been in their spots for decades, like Harvey & Lewis Opticians on Asylum Avenue. Marcoux said Hartford Denim couldn't afford to staff its downtown location full- time, and it only was open for a few hours around lunch four days a week. The shop was open longer on Saturdays and did see more foot traffic around its events, which typically showcased local art, but that wasn't enough to justify the location on a full-time basis. "[IConnect] was a really great idea, but I don't know if doing anything different would have changed the outcome for us," Marcoux said. Naturally Cats & Dogs benefitted from having rent-free space for six months, but the shop lost customers when it moved to its new location and still must try to establish itself with downtown pet owners, Marshall said. "If we had been rent-free for a year, we would have been more viable than we are now," Marshall said. "We are still running in the red, but I guess — as a new business — you are supposed to." Hartford Prints!, which is open eight hours a day, six days per week, has seen traffic at its loca- tion ebb and flow with the market for designer stationary, but October through December was a strong period for the shop, Gale said. The letterpress studio, like Hartford Denim, benefitted from hosting events at its location, such as St. Patrick's Day folk music and live broadcasts of WNPR shows. The events aimed to make the space more active and to get people out of their offices and apartments to see the benefits of shop- ping downtown, Gale said. Still, Gale said more than half of their cus- tomers come downtown specifically to visit the shop; they see fewer casual pop-in shoppers that are part of a healthy retail environment. "Incubating stores like these shouldn't have an end date," Gale said. "It needs to be a conver- sation that doesn't end." Future opportunities While downtown retail may be a tough slog right now, there could be some hope for the future. With 800 new apartments now under construction, enhanced mass-transit options from the CTfastrak busway, UConn and Trinity establishing campuses downtown, and thou- sands of state employees moving to the center city, Hartford will see an influx of people over the next few years. Already some momentum is building. According to CBRE/New England's recently published 2015 Market Outlook, 10 new restau- rants opened in the central business district in the last four years, with three new additions expected for 2015. For the first time ever, Hart- ford saw an influx of over 800 interns living and working downtown last summer, exposing Millennials to the city's cultural, employment, and recreational offerings. "We are really on the ground floor of retail right now in downtown Hartford, and we are excited about what is coming into down- town," Marshall said. "As a way going forward, the [iConnect] program would be a great way to launch more businesses downtown." n from page 1 iConnect Program Scorecard The four iConnect program participants had different levels of success in establishing a downtown presence: Hartford Prints! Naturally Cats & Dogs Hartford Denim Co. National Exhibitions & Archives First Moved Downtown: October 2013 February 2014 December 2013 N/A Months With Subsidized Rent: 8 6 10 N/A Current Location: 42 Pratt St. 10 Trumbull St. 30 Bartholomew Ave. N/A Status: After negotiating with landlord Northland Investment Corp., the letterpress studio has stayed in its iConnect location, now paying rent. After founding the business at 100 Trumbull St., the pet store moved south one block to a lower-cost, less high-profile location. After only being open on a limited basis in downtown's XL Center, the clothing maker turned down a rent offer and returned to selling out of its factory location in the Parkville neighborhood. After not getting to modify its desired downtown location to meet its needs, the Glens Falls, N.Y. museum decided to cease its participation in the program before it ever moved in. Retailers say Hartford rents too high Hartford Denim Co.'s Marshall Deming (left) and Dave Marcoux tried operating their busi- ness on Trumbull Street but left the space after iConnect because rent was too high. P H O T O | H b J F i l e

• Cover