Hartford’s program to subsidize new retail locations in downtown’s empty storefronts has ended with mixed results, leaving participants and observers wondering what comes next.
Of the four businesses that participated in the city’s $160,000 iConnect program, one never ended up moving downtown; another departed after its subsidy ended; one relocated to a different center-city location; and another company stayed in its original storefront.
“On a temporary basis, the program is good because it gives Hartford fresh new flavors,” 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 — letterpress studio Hartford Prints! on Pratt Street and pet store Naturally Cats & Dogs on Trumbull Street — and more than 10,000 people came downtown to either shop at the three stores or participate in their events, city leaders say the program was a success.
“It was a pilot program that made people feel very excited about Hartford,” said Kristina Newman-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 Development unlikely to offer additional funding to keep the program alive, the city is trying to figure 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, according to retail service provider KeyPoint Partners. But downtown has historically had a harder time attracting and keeping small shops open. Just recently, Jojo’s Coffee Roasting Co. on Pratt Street announced it was closing 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 Trumbull St. location, which he eventually vacated.
In his search for new space, Marshall said some landlords weren’t open to the possibility 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 participated in the iConnect program. His Trumbull on the Park complex is pet-friendly, and Kenny said he wanted to provide an amenity for his residents.
“Now that [Naturally Cats & Dogs] has settled into a new space [nearby], they still are providing that amenity we previously 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 landlord 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 culture,” 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 Northland the benefits of having retail on the ground floor of 42 Pratt St., which is occupied by commercial and residential tenants in upper floors, said Gale. The shop pays $1,500 monthly in 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 locations to make the buildings appealing to business 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, preferring, 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 residents 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 spending 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, five days per week, has seen traffic at its location ebb and flow with the market for designer stationery, 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 shopping downtown, Gale said.
Still, Gale said more than half of their customers 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 conversation 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 thousands 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 restaurants opened in the central business district in the last four years, with three new additions expected for 2015. For the first time ever, Hartford 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 downtown,” Marshall said. “As a way going forward, the [iConnect] program would be a great way to launch more businesses downtown.”
CORRECTION: A previous version of this article incorrectly stated Hartford Prints! is open six days a week. The letterpress studio is open Tuesday through Saturday and pays $1,500 per month in rent for its Pratt Street location.
