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October 26, 2015 Focus: Retail

Retail still critical to municipalities' economic growth

PHOTOs | HBJ File Greater Hartford has many key retail centers including The Shoppes at Farmington Valley (show above and left) and Blue Back Square in West Hartford (shown far left).
By Matthew Broderick Special to the Hartford Business Journal

As Canton's director of planning and community development, Neil Pade has noticed a shift in town over the past four years. He says the community — which saw its population grow 17 percent between 2000 and 2010 — has transitioned from defensively reacting to development opportunities to more proactively identifying commercial development residents desire.

Much of that shift has been driven by a thriving retail sector that has helped spur the towns' economic growth, which last year saw nearly $223 million in retail sales, largely driven by the success of the Shoppes at Farmington Valley, an outdoor mall with more than 40 retailers.

“The Shoppes have helped drive some of the economic activity in the region from the WestFarms mall area out towards the Farmington Valley,” Pade explained.

He points to a recent economic study commissioned by the town, which found that one-third of retail customers came from the neighboring towns of Avon and Simsbury, who generated nearly $40 million in retail revenue.

Pade said the town also attracts a large number of recreationists to Canton's community assets, including the Farmington River, hiking trails and the Farmington Valley Stage Company. “We're a very visitor-oriented community,” he said.

Andy Brecher, economic development director for Newington, which has a retail vacancy rate of 4.5 percent, said retail is vital to his town's economy. According to figures from the state Department of Revenue Services, Newington generated retail sales of more than $770 million in 2013.

A major factor in those numbers is the Berlin Turnpike, which features many big-box stores like Walmart, Sam's Club and Lowe's — situated on land that, Brecher said, has been selling for $1 million per acre.

“Commercial taxpayers account for over 25 percent [roughly $23 million] of Newington's property tax revenue,” Brecher said.

The growth and success of the turnpike has been aided by strategic zoning changes to improve the aesthetics of the town's main retail areas, Becher explained. “Reducing signage, lighting and electric vehicle charging stations, and a large municipal parking lot in the town center, have made Newington a more attractive location,” he said, adding the parking is free everywhere in town.

And while Brecher is confident that Newington's vibrant retail sector will continue to be the town's economic engine, he understands that retailers in the region — and nationwide — will continue to face a growing challenge: Internet sales. “As more consumers grow comfortable with online purchases, it'll be hard for local retailers without a service component to their product to compete,” he said.

Mark McGovern, director of community services for the town of West Hartford has already seen the impact of that trend. “It's very difficult for an independent retailer [to stay in business],” he said. “In West Hartford Center a lot of traditional retail space has transitioned to restaurants,” McGovern explained.

According to a report released earlier this month by Massachusetts-based KeyPoint Partners, West Hartford has the lowest retail vacancy rate in the region at 3.3 percent. “When there is turnover — or a business closes — the space fills quickly,” McGovern explained, noting West Hartford's retail sectors are strong outside of the center as well including Corbin's Corner, Bishop's Corner and Park Road.

While West Hartford's commercial sector remains strong, McGovern says the town's strategic plan is more focused on residential development.

“The value of a strong retail sector is that it adds to property values and spurs residential growth,” he said. “The town is currently working on two new apartment buildings to target young professionals.”

The hope is that strategy will, in turn, drive more retail business.

“Additional housing provides more feet on the street,” said Barbara Lerner, executive director of the West Hartford Chamber of Commerce. She points specifically to Blue Black Square — a mixed-use development that combines entertainment, restaurants and residential space — as proof of a successful model. “We have seen that large national brands can work and co-exist very nicely with the small mom-and-pop [stores] of the West Hartford Center,” she said.

Robert Bessell, a member of the Canton Economic Development Agency, a volunteer-run organization, sees the value of mixed-use development. With the town's population expected to grow an additional 3 percent by 2020, Bessell said smart land use is key.

“Mixed use of land is good from a tax purpose and retail purpose,” Bessell said. “There are some real benefits to having people living above businesses. It makes the town more interesting,” and successful retail more likely.

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