Category Archives: Trends

An Ethnic Downtown With Many Retail and Fast Food Chains

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For many years downtown revitalization experts lamented that large, ethnic downtowns — those with lots of African American and Hispanic shoppers — were being avoided by major retail chains.

That is certainly no longer the case. Here, in New York City, one of the hottest retail locations is along 125th Street in Harlem. Many retail and fast food chains are also occupying important storefronts in the outer borough downtowns such as Jamaica Center in Queens, Downtown Brooklyn and Fordham Road in the Bronx. They are also opening in strong neighborhood shopping districts such as Jerome Avenue in the Bronx and and Corona Plaza in Queens.

Below is a list of the national and regional retail and fast food chains that I found on a visit yesterday to Jamaica Center.

I first went to this commercial district with my mother to buy shoes back in 1949, which was toward the end of its “Golden Age.” I continued to shop there occasionally for sports equipment and sneakers until I went away to college in 1958. It was not until the early 1980s that I returned to carry out consulting assignments for Regional Plan Association and the Greater Jamaica Development Corporation (GJDC). Though my involvement in the revitalization of this district ended in the early 1990s, I have continued to visit every few years to take photos and gauge its progress. It’s just two miles from my home office.

The revitalization of Jamaica Center has been a long process, starting back around 1968 with the creation of the GJDC. Over a billion dollars have since gone into the revitalization of this commercial center, paying for such things as the re-routing of a subway line (E train), tearing down an elevated line, building York College, the construction of a one million SF Social Security Building, new court buildings, building a terminus for a monorail link to JFK, etc.

By the early 19980s the quality of the retailers was ebbing and this trend culminated with the closing of two major department stores, Macy’s and Gertz. White shoppers from the northern and western parts of Jamaica Center’s trade area stopped visiting, choosing instead to drive east to the shopping malls in Nassau County.

Many of the other neighborhoods in the trade area had African American households with relatively high annual incomes for Queens. Cambria Heights, for example, recently had a median household income of $69,030, while the median income for Queens was $49,780. Many of the residents in these neighborhoods were civil service workers and teachers, often in dual income households. Though large numbers of these residents passed through Jamaica Center each weekday to use the subway on their trips to and from work, they, too, avoided shopping there because the retailing had come to focus on low income and teenage markets and the area had developed a reputation for street crime and drug use and sale. Nevertheless, the pedestrian traffic along Jamaica Avenue continued to be a “beehive of activity” and some of the merchants were doing $s/SF that rivaled those of retailers in some of Manhattan’s best locations.

I was greatly encouraged by my recent visit and feel that the end game, the “take off” phase of Jamaica Center’s revitalization is in sight. The primary reason for my optimism is the recent announcement of a major project that will bring over 300 market rate housing units into the downtown, with a number of similar projects on the drawing boards. Another reason is that the retailing’s strength now seems to be more than shops featuring “urban wear,” with chains having a strong middle class appeal opening, e.g., Home Depot, Marshall’s, Zale’s, Nine West, Old Navy. The teens will still shop in Jamaica, but now their parents might as well.

The changing nature of the district’s retailing is also, in my opinion, reflected in the new store facades that have been built in recent years. They are much more attractive, with smaller signage, a better sense of proportion and though the colors used might offend some with Main Street design sensibilities, they are often still very pleasing.

Another indicator of this district’s strength is that commercial rents along Jamaica Avenue recently have reached as high as $150/SF for choice locations.

In the list below I have noted some of the chains that were open in Jamaica Center and have since closed. It should be noted that all of these closures involved chains that were having overall problems.

At the end of the list I have provided a link to a web-based photo album that contains photos of Jamaica Center’s retail chains.

National and Regional Chains in Jamaica Center January 25, 2008

Payless (2 stores)
Gothic Furniture
Quiznos Sub
UPS Store
Java’s Brewin
Game Stop
Burger King
Taco Bell
Pizza Hut
Dunkin Donuts
Subway
McDonald’s (2)
Duane Reade
Walgreens
Sleepy’s
Footlocker Kids (converted to Kids)
Zale’s
Nine West
Radio Shack
Marshall’s
Conway (2)
Home Depot
Fabco Shoes (2)
Footco USA
Jimmy Jazz
Toys ‘R Us (closed, chain in trouble)
Kids ‘R Us (closed, chain in trouble)
Wertheimers (closed, chain in trouble)
Jennifer Convertibles
Rainbow
Ashley Stewart
Tick Tock
Dr Jay’s
Vim
Modells
Cookie’s Department Store
Porta Bella
Strawberry
Parade of Shoes (closed, chain in trouble)
Youngworld
Athlete’s Foot
Shoppers World
Old Navy
The Children’s Place
Gap (closed, chain in trouble)

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Downtown Crime Problem Redux add-on

Here is an interesting paragraph from today’s NY Times relating to my last posting on the possible reemergence of downtown crime problems:

“In Trenton, a city of 85,000 where the police estimate that the Bloods have as many as 2,000 members, overall crime is down and officials say violence is largely confined to areas where gangs are most prevalent. But gang killings remain a persistent problem. There were 20 homicides in the city last year; the police have made arrests in nine of the 16 killings they consider gang related, and in three of the others. In the first half of this year, murders increased by 50 percent.”

— from David Kocieniewski , “Scared Silent: A Little Girl Shot, and a Crowd That Didn’t See” New York Times, July 9, 2007

THE DOWNTOWN CRIME PROBLEM REDUX?

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Is crime again becoming a crippling problem for our nation’s downtowns?

For decades after WW II, crime and the fear of crime first fostered downtown decline and then impeded their revitalization. Happily, since the early 1990s, the crime problem seemed to be abating as violent crime statistics nationally dropped steadily and significantly. This drop in crime was accompanied by reduced fear, increased pedestrian traffic and nighttime activities in downtowns revitalized by:

  • Residential and commercial growth
  • A population trend that reduced the size of the crime-prone age cohort
  • And police departments adopting new and far more effective strategies.

However, the FBI just announced an increase in violent crimes for the second straight year, an occurrence that signals the first continued spike in homicides, robberies and other serious offenses since the early 1990s. This spike is especially noticeable in medium-sized cities and cities located in the Midwest. In large cities such as New York, the crime rate continues to decline.

What is unknown at this time is how this recent uptick in crime has impacted on downtown districts.

The Down Side.

As the introduction of crack cocaine led to a major surge in violent crimes between 1985 and 1992, so the growing use of Methamphetamine — a..k.a. Crystal Meth – appears to be associated with higher crime rates. The Crack Meth problem also appears to have taken particularly strong roots in the Midwest and in small and medium-sized municipalities — localities that trended toward not having major crack cocaine problems.

Many of these same municipalities are reporting the growth of street gangs, especially those having national organizations, such as the Crips, Bloods, MS-13, etc. There is a strong correlation between the growth of Crack Meth use in a locality and the growth of street gangs, since the gangs often are heavily involved in the sale of this drug. There have been some reports of these gangs being active in poor or marginal commercial districts, where they intimidate shoppers and scare and extort local merchants.

There also has been a rise in retail crimes by well-organized rings of professional thieves. While most of the crimes in the larceny/theft statistical category have declined since 2000, shoplifting has increased 11.7 percent.[1]

The Bush Administration’s reduced funding for police departments has had a big negative impact on the police departments in small and medium-sized cities, where, according to the legislative counsel for the International Association of Chiefs of Police, the loss of “one or two or five police officers can make a real difference.”[2]

Nationally, there has been an increase in the teenager/young adult population, the age group most prone to committing crimes and acts of violence, especially in low-income disadvantaged areas.

Also nationally, there are growing numbers of released prison inmates and their recidivism is likely to result in many crimes.

Newspaper articles on the recent crime surge have focused on criminal events in poor and often “ethnic” neighborhoods, which often are located near downtown areas and sometimes in them. As a recent major study found, “Downtowns are home to some of the most and least affluent households of their cities and regions.”[3]

While some of the newspaper articles mention the meth drug connection, others focus on a new and extremely disturbing aspect of this heightened violence – it’s seemingly arbitrary causation. For example:

“And while such crime in the 1990’s was characterized by battles over gangs and drug turf, the police say the current rise in homicides has been set off by something more bewildering: petty disputes that hardly seem the stuff of fistfights, much less gunfire or stabbings.

Suspects tell police they killed someone who ‘disrespected’ them or a family member, or someone who was “mean mugging” them, which police loosely translate as giving a dirty look. And more weapons are on the streets, giving people a way to act on their anger.

Police Chief Nannette H. Hegerty of Milwaukee calls it ‘the rage thing.’”[4]

Arbitrary violence is almost impossible to predict and consequently almost impossible to avoid. It is very fear inducing.

On The Upside.

In the 1980s I directed a major study for Regional Plan Association on how the fear of crime is generated and how it strangled the outer borough downtowns in New York City. A major finding was that the fear of crime did not so much thwart visitation rates – people still had to use the subway connections, courts and hospitals — as it induced a huge amount of pedestrian avoidance behavior and that significantly reduced the number and strength of the multi-purpose trips that are the sine qua non of healthy downtowns.[5]

More recently, as my wife and I have traveled across the nation over the last 10 years, visiting such places as Boston, Chicago, Charlotte, Miami, Midtown Manhattan, Pasadena, Philadelphia, Portland (OR), San Diego, Santa Monica and Seattle, we have been struck by significant evening downtown pedestrian flows, where people seemed to be walking free of fear and not feeling the need to take precautionary measures. Unfortunately, I could not find any statistical evidence to support our “field observations.”

I could offer numerous anecdotal reports of our experiences, but here are just two:

  • Since returning to NYC in 1980, I have often walked, after dark, from Times Square down 7th Avenue to Penn Station to catch a LIRR train home. During the 1980’s and much of the 1990’s, Times Square was a physically frayed, fear inducing area, but walking down 7th Avenue, desolate but for the drunks, drug users and homeless was even worse. Street savvy pedestrians were ever vigilant, watching darkened spaces and scanning who was behind them. Today, Times Square is awash in new development and again the entertainment capital of the world, jammed with pedestrians day and night, and a favorite of tourists. Now, after dark, there is a steady pedestrian flow on 7th Avenue, overwhelmingly comprised of Average Joes and Average Janes, with the quality of life issues greatly abated. Pedestrians are no longer constantly looking over their shoulders. Some even window shop.
  • We love to visit Center City Philadelphia at least once a year because of its superb restaurants, cultural amenities and “walkability.” On our first visit, in 1985, we drove one Saturday evening down Walnut Street to Rittenhouse Square. The street was devoid of pedestrians as was the rest of the downtown we drove through. On recent visits we’ve walked to several restaurants on Walnut from our hotels on Logan Square or East Market Street. On these visits, with its numerous restaurants and bars and nearby hotels and cultural facilities, Walnut always had a significant amount of nighttime pedestrian activity, overwhelmingly by “respectable people”

Back in 1987 I argued that downtowns could reduce the fear of crime if they were designed and developed to make visitors feel that they are interesting and attractive places where “’respectable people’ like themselves tend to frequent.” The key to the emergence of such downtowns was the development of a dense, compact multi-functional core area that would combine residential, office, retail and entertainment functions. Such core areas would be conducive to significant flows of law abiding pedestrians during both day and evening hours.

Today, most of the successful downtowns I visit have such multi-functional cores, These downtowns are often referred to — with some hyperbole — as “24 hour” activity centers, because commercial and cultural activities as well as pedestrian traffic are present during daylight and evening hours.

Entertainment Niches. Vibrant entertainment niches containing restaurants, watering holes, movie theaters, concert halls and/or legitimate theaters have enabled many downtowns to attract substantial numbers of evening visitors, who are not afraid of strolling and window shopping after dark. This is true for large downtowns such as Midtown Manhattan , Center City Philadelphia, downtown Chicago and the Gaslamp District in San Diego as well for smaller downtowns such as New Brunswick, NJ, Englewood, NJ, Old Pasadena, CA, Manayunk, PA

Residential Growth. Also contributing to this “after dark” resurgence has been the growth of downtown residential populations. In her recent study, Eugenie Birch also found that:

““During the 1990s, downtown population grew by 10 percent, a marked resurgence following 20 years of overall decline. Forty percent of the sample cities began to see growth before the 1990s. While only New York’s two downtown areas and Seattle, Los Angeles, and San Diego saw steady increases from 1970 to 2000, another 13 downtowns have experienced sustained growth since the 1980s.”

This influx of downtown residents is important for several reasons:

  • Downtown residents, in Jane Jacobs’ terms, take “possession” of the area they live in; they help make sure it is properly maintained and kept safe
  • More residents help create a built-in demand for many retailers and entertainment functions. They can be especially important for the attraction and development of good restaurants
  • More downtown residents help create a more interesting and safer environment after dark. Directly and indirectly they increase the flow of law-abiding citizens, which in turn serves to reduce the fear of crime

While Birch’s study focused on the nation’s major downtowns, the NY-NJ-CT metropolitan area offers numerous examples of significant growth in residential units in smaller downtowns such as White Plains, Hoboken, Morristown, Cranford, Englewood, South Orange, New Brunswick, Rahway, Livingston, Garden City, etc.

Police Strategies. Downtown security also has been greatly improved by police departments deploying one of more of the following strategies:

1. Community Policing. This usually involves more foot patrol officers who build relationships with the people on their beats, garner better information about criminal activities and problem-solve specific community crime issues

2. Broken Windows. Based on the famous 1982 “Broken Windows” article by James Q. Wilson and George Kelling in the Atlantic Monthly that argued:

‘If disorder goes unchecked, a vicious cycle begins. First, it kindles a fear of crime among residents, who respond by staying behind locked doors. Their involvement in the neighborhood declines; people begin to ignore rowdy and threatening behavior in public. They cease to exercise social regulation over little things like litter on the street, loitering strangers, or truant schoolchildren. When law-abiding eyes stop watching the streets, the social order breaks down and criminals move in.”

A broken windows strategy tries to remove the “signs of disorder” such as broken windows, dirty sidewalks, loitering, public use of drugs and alcohol, prostitution, etc.

3. Comstat. Uses computerized mapping of crime reports to identify “hot spots” of criminal activity. These hot spots are then analyzed and the local police units are tasked to deal with them and evaluated on their ability to succeed.

The 24 Hour Downtown and New Policing Vs The New Crime Wave

How are the 24 hour downtowns coping with the new crime wave? Are the new residents and greater evening pedestrian flows helping to deter criminal activities and/or keeping the fear levels low? How effective are the new police strategies against the new crime wave? Are downtowns experiencing a recent surge in crime and fear doing so because they have not used the above mentioned revitalization and policing strategies or because these strategies have failed? These questions need to be addressed and answered – and quickly – so the downtown revitalization community can take appropriate remedial actions. Perhaps the International Downtown Association can work with the National Institute of Justice and academic experts such as George Kelling to create, fund and execute the necessary research project.

[1] Joel Groover, “ORGANIZED CRIME Retailers combat growing number of professional shoplifters,” Shopping Centers Today ,October 2006

[2] Dan Eggen, “Violent Crime Up For Second Year: Some Point to Cuts in Federal Funding,” Washington Post, Saturday, June 2, 2007; A01

[3] Eugenie L. Birch, “Who Lives Downtown,” The Brookings Institution, November 2006

[4] Kate Zernike, “Violent Crime Rising Sharply in Some Cities,” New York Times, Feb.11, 2006

[5] N. David Milder, “Crime and Downtown Revitalization” Urban Land , September 1987, pp. 16-19

Paying “Premiums” For Downtown Redevelopment Projects

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A wave of public indignation and anger against the use of eminent domain for economic development purposes now threatens the renewal of our nation’s downtowns, Main Streets and neighborhood shopping areas. However, evidence suggests that the use of eminent domain for economic development purposes can be salvaged if universally acknowledged abuses are avoided AND the property owners and tenants dislocated through the use or invocation of eminent domain are paid a meaningful “premium.” The characteristics of the premium may differ case by case, with resulting variation in cost. However, it can be anticipated that the cost often will be significant, with considerable consequences on the financial feasibility of downtown redevelopment projects. Savvy downtown organizations will be finding ways to finance these new redevelopment project premiums.

Kelo’s impact. The reaction to the June 2005 decision of the U.S. Supreme Court in the Kelo v. New London case has put the use of eminent domain in jeopardy in a growing number of states across the nation. Though the court, in a close 5 to 4 decision, affirmed the use of eminent domain, legislation has been introduced or passed to reduce its use in Alabama, Delaware, Texas, Ohio, Minnesota, Colorado, Michigan, Pennsylvania, Florida and New Jersey. California also will hold a referendum on eminent domain in November 2006.

Though these legislative initiatives fall into a number of descriptive categories, their underlying objective — except possibly for clearly blighted situations– is usually to make it difficult or impossible for eminent domain to be used to increase tax revenues or for economic development purposes such as to enable real estate projects that putatively will significantly improve an area’s economic well-being.

Downtowns obviously cannot wait until blighted conditions appear before undertaking serious redevelopment projects. Doing so just makes redevelopment riskier, more costly and burdensomely complex. A way to make the use of eminent domain again palatable must be found. The future of America’s cities and towns is at stake.

Fair market value and the case for premiums. While the Kelo decision focused on the issue of public purpose, in my view the real challenge with eminent domain projects is political rather than legal and centers around the issue of fair market value. As things now stand, an eminent domain project will usually have potential victims from the getgo — the people who must give up the properties they own and who have not asked for the project to be initiated. While the project may indeed have results that will enhance the general good, the best that the property owners can do is get “fair market value.” Such victims can politically nullify a project’s public benefits and become the rallying point for political opposition.

HUD standards are often cited as exemplary when it comes to the use of eminent domain. They are based on an appraiser determining a property’s fair market value, which according to one of HUD’s publications can be understood in the following manner:

“Fair market value is sometimes defined as that amount of money which would probably be paid for a property in a sale between a willing seller, who does not have to sell, and a willing buyer, who does not have to buy. In some areas a different term or definition may be used….The fair market value of a property is generally considered to be ‘just compensation.’ Fair market value does not take into account intangible elements such as sentimental value, good will, business profits, or any special value that your property may have for you or for the Agency.”

Associate Justice Samuel Alito of the US Supreme Court went through his confirmation process around the time that the Kelo case was before the court. In a TV interview Alito was asked about the case and he uncharacteristically expressed a fairly clear view on the issue at hand — the use of eminent domain would be OK, if owners were paid a premium over fair market value for their properties, with the clear implication that such a premium is to compensate for the sort of “intangible elements” that are denied in HUD’s definition of fair market value and/or a share in the economic wealth generated by the project.

Such a legal position appears consistent with the claims of many redevelopment advocates who, in the vortex of debate that built up around the Kelo case, argued that the vast majority of property owners receive more than fair market value when their properties are sold under the threat of eminent domain. Redevelopment advocates also argued that commercial and residential tenants who are forced to relocate by eminent domain related redevelopment projects usually receive very favorable financial considerations. Unfortunately, there is no rigorous research to substantiate these claims, only a thin array of verbal anecdotes.

My own family’s experience indicates that property owners do not always feel that they have received a munificent amount of money from the governmental entity taking their property — or threatening to do so.. Furthermore, the whole experience can be quite complex and its true impacts may take years to emerge.

Back in the early 1950’s, the New York City Housing Authority used the threat of eminent domain to purchase a brownstone and tenement owned by my maternal grandmother in order to build a high rise “housing project.” My grandmother, four of her children and their spouses and children occupied apartments in these two buildings. We all lived in a warm and closely knit family environment. While the neighborhood was changing and family members had considered moving, there was a lot of inertia caused by the fear of the family being dispersed. When the city invoked eminent domain the family could not really judge whether the financial offer was fair or not. Most importantly, the family felt that it did not have the power to fight the city. Family members felt they had no choice but to make the moves to other neighborhoods that they had long contemplated. The money might have made things a little easier, but it was not viewed as a bonanza. The fact that we were forced to move left a somewhat bitter taste. I wonder how we would have reacted if the city had showed that it was paying us 25% above fair market value and explained “We are forcing you to move and the extra money is our way of trying to make up for it.”

Ironically, the diverse manifestations of redevelopment premiums are amply demonstrated by the types of final settlements made by the families involved in the Kelo litigation.

A state official involved in the negotiations claims that giving the property owners more money was a key to the settlements. Also, according to an article in the New York Times, one of the settling owners said “When you look at my property, put these on,” as he fiddled with a pair of sunglasses with dollar-sign holograms on the lenses. Susette Kelo, a lead plaintiff, agreed to have her house moved to a new lot. Another homeowner said the difference was a number of small concessions the city made:

  • While his house will be torn down, his family has an option to buy property in the new development at an agreed price.
  • The city also agreed to move the rhododendrons, yews and other plants his father planted 30 years ago and to install a plaque in the development to honor his mother, who fought the condemnation of her home until she died in 2003.

Successful redevelopment premiums will stimulate property owners and tenants to settle with the developer or development agency and avoid legal actions. Redevelopment premiums are more likely to succeed if they:

  • Provide the property owner or tenant with some of the increased wealth that the new redevelopment project will generate. This will require the involvement of a shrewd financial deal-maker

  • Compensate, financially or otherwise, for “intangible elements” lost by the relocation (e.g., the rhododendrons, yews and plaque mentioned above). This will benefit from a negotiator with superior inter-personal skills.

Where is the money going to come from? The relatively high costs of downtown land already require that financial incentives such as tax increment financing, payments in lieu of taxes, land write-downs, etc., be made available if many redevelopment projects are to be financially viable. The costs of redevelopment premiums — especially in small and medium-sized projects having limited density and hence limited income potential — may require the use of new financial tools.

One of these may be giving current property owners equity stakes in the redevelopment projects that will be built on their properties. The ability to reach a timely agreement on the current values of their properties will likely be critical to the success of such ventures.

Many downtown districts have the capacity to issue bonds through their municipality which are paid off from the districts’ assessments. For example, a district paying about $45,000/yr for 20 years might bond for about $500,000 at a 6.5% interest rate. While $500,000 is not a princely sum, it often can be leveraged and might help make three or four redevelopment projects viable.

Also, there are what some call “exactions.” A community might find that hefty redevelopment projects capable of generating large revenues and big increases in municipal tax revenues are occurring along the municipality’s periphery or in very solid sections of the downtown. The local government might negotiate for such a project to donate $50,000/yr for 20 years — which adds up to $1,000,000. For a shopping center with annual revenues over $100,000,000 a $50,000 exaction should be more than affordable.

Home Depots and Home and Hearth Niches

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Conventional Wisdom
Conventional wisdom holds that when “category killer” retailers, such as Home Depot , enter a market area, they decimate many independent retailers in nearby downtown and neighborhood commercial centers. Local hardware stores, lumber yards and paint shops are supposedly doomed, while shops featuring lighting, window treatments, flooring, home decorations, etc., are seen to be in increased danger. The urban Metropolitan Avenue shopping district in the Forest Hills neighborhood of New York City and the suburban Springfield Avenue commercial corridor in Maplewood, NJ, demonstrate that sometimes these small merchants can not only survive, but possibly even thrive, after a Home Depot opens nearby.

Forest Hills, NY
A Home Depot opened five years ago about 500 feet from a 0.70 mile section of Metropolitan Avenue, a two-lane, often congested street, that for decades was a backwater shopping district in this neighborhood. This district is 1.7 miles from the very powerful Queens Center Mall, and about 0.8 miles from the Austin Street shopping area that is tenanted by the likes of The Gap, Eddie Bauer, Benetton, Banana Republic, Sephora, Barnes & Noble, etc.

Five years ago Metropolitan Avenue was anchored by popular independent operations such as Eddie’s Sweet Shop, Continental Hardware, Alberto’s Restaurant, Weston Bros. Appliances and a movie theater. All had been around for over 30 years.

When Home Depot opened many retailers, including the owner of Continental Hardware, thought that a lot of local shops would be crushed. Today, this strip has experienced a surge of growth with better quality shops and restaurants opening that attract more affluent shoppers from nearby neighborhoods, including the famed Forest Hills Gardens enclave. Commercial rents and foot traffic have increased significantly. It now also has a flourishing 24 store “home and hearth” niche that includes: a 4,000 sf hardware store that stocks 60,000 items and has been around for over 80 years; a paint and wallpaper store featuring Benjamin Moore products; six antique shops; two appliance stores, with one specializing in air conditioners and fireplaces and the other in vacuums and sewing machines; two plumbing and plumbing supply stores; two furniture shops; one kitchen cabinet store; one shop specializing in window treatments and two reupholstery and drape shops.

Consumer expenditures provide room for both a Home Depot and a lot of nearby independent retailers: 157,459 households live within a seven-minute drive and they spend over $321 million annually on home furnishings and equipment.

The shops in this commercial area have long experienced heavy competition from Manhattan as well as nearby malls and shopping centers.

Double click photo to access photo album on this niche.

Maplewood, NJ
Springfield Avenue is a 2.5 mile-long suburban commercial corridor. It long has been a secondary shopping area within the community to Maplewood Village in terms of reputation, appearance , store quality, commercial rents and customer traffic. The core of the shopping district is about 3 miles away from the Short Hills Mall, which is famed for its array of high end retailers.

Over eight years ago a Home Depot opened about one mile west of the heart of the area. An Expo also opened near the Home Depot, but it soon closed. Today, Springfield Avenue is definitely improving. The Township has made significant street improvements. Recently, Dunkin Donuts and Pappa John’s Pizza opened as have some attractive restaurants, a toy store, an art gallery, a home decorating shop and a dance school. There also is a 25-store home and hearth niche that includes architects, plumbers, art dealers, upholsterers, paint and home décor shops. The strongest stores in this niche are Riccardi Bros. Decorating, Riccardi Paints (which have been around for 75 years) and Sherwin Williams Paints.

According to Walter Riccardi, his paint store’s revenues took a 5% hit the first year Home Depot opened, but they have since more than recovered. The Expo had a similar impact pattern on his decorating store. While his store’s prices are close, Riccardi states that his key to success is that “We serve our customers to death.” Households living within a 7-minute drive of the heart of the Springfield Avenue corridor spend $260,801,200 annually on household furniture and equipment.

Lessons Learned
There are several apparent reasons why these home and hearth niches have succeeded:

  • These niches represent nearby specialized shopping centers for consumers interested in making their homes more attractive or comfortable. They provide a lot of choice and convenience. Attractive restaurants, coffee houses and ice-cream parlors enhance this shopping experience.
  • Many of the niche shops that pre-date the Home Depots continue to be strong because of their quality products and especially their high levels of service. They never competed on price — and do not today. Many target time-pressed, affluent shoppers who definitely are not do-it-yourselfers and who place a high priority on such things as design, paint selection systems and installation being parts of the purchase package. Such services are definite keys to success.
  • They also had years of experience dealing with strong competitors before the Home Depot arrived. Similar shops in less urban settings may not have similar competitive experiences and are consequently less able to cope with the strong competitive pressures presented by a Home Depot.
  • Many niche shops — e,g., the antiques, art, furniture and decorating shops — do not compete head-on with Home Depot. Their goods and services complement Home Depot’s offerings. They help maintain customer traffic for the stores that do compete more directly with Home Depot
  • The opening of the Home Depot legitimated Metropolitan Avenue as a retail location, attracting better operators and more investment . It also increased consumer awareness of the strip.
  • Consumer expenditures within both market areas for home and hearth goods and services provide ample room for a Home Depot and a lot of independent retailers.