Tuesday, February 2, 2016

Why Can't Roosevelt Island Long Vacant Main Street Stores Find Retailers - Not Price Or Lack Of Foot Traffic But Scope Of Construction Work On Premises The Obstacle Says Hudson Related Representative

As reported last September, Roosevelt Island Main Street Master Retail Leaseholder Hudson Related hired Cushman & Wakefield as the new leasing broker to try and rent the long vacant Roosevelt Island Main Street stores.

Image Of Roosevelt Island's Vacant 503 Main Street

I asked Cushman & Wakefield leasing broker Michael Azarian for a current status update on the leasing of Roosevelt Island Main Street stores. Mr. Azarian replied last Friday:
We are actively pursuing tenant categories that will be amenities to the Residents of the island. Specific examples are:
  • Casual Dinning
  • Bakery
  • Youth Facility/Child care/Day care/Youth instruction
  • Spa and wellness
  • Physical therapy
  • Pet services
  • CafĂ©/wine bar with light food
  • Home improvement / basic home goods
We are making progress and continue to tour the island with tenants on a regular basis. We have received a proposal from an interested tenant who we are in the process of qualifying their stability. They fall in the above mentioned categories.

Tenants see that the Island is growing. They are curious to see how the Cornell Tech development will create points of sale for their businesses. Most tenants who are interested continue to conduct their due diligence visiting the Island at various hours of the day on different days of the week. Most interested tenants are service driven and have a personal connection to the Island either through friends, family or previous residential tenancy. 
The Roosevelt Island Residents Association (RIRA) Main Street Retail Committee met January 27 with Hudson Related representative Pedram Mahdavi for an update on Main Street leasing progress.

Mr. Mahdavi was asked by members of the RIRA Retail Committee to explain what the problem was in renting the Roosevelt Island Main Street stores. Mr. Mahdavi replied that it was not the asking rents for the premises nor the lack of foot traffic that was holding back potential tenants from signing leases. Mr. Mahdavi said the main hurdle expressed by potential tenants for signing new leases was the scope of construction work needed for the vacant spaces.

Mr. Mahdavi described potential Main Street retailers feedback received from Cushman & Wakefield 

A frustrated Roosevelt Island Historical Society President Judy Berdy said of Main Street that it:
 ... is so damn dead. There's no reason to tell people to come to Main Street...

Roosevelt Island Operating Corp (RIOC) Board Member Margie Smith was skeptical that store construction difficulties was the main obstacle to leasing the stores but she thought it was the lack of Main Street foot traffic as compared to other areas of NYC. Other residents noted that the Wholesome Factory Organic Market does very well and is always crowded. The question is what other types of stores will draw a crowd on Roosevelt Island?

Here's the full January 27 RIRA Main Street Retail Committee discussion with Hudson Related representative Pedram Mahdavi.

Part 1.

Part 2.

Part 3.

RIRA Main Street Retail Committee Chair Anne Kanninen summarized the meeting as follows:
1) It was recognized that only one lease was signed during 2015 (the Child Care Center)

2) A new realtor Cushman & Wakefield (C&W), was hired by Hudson Related in 2015.

3) According to Mr. Mahdavi from Hudson Related (HR) they did not give any guidelines for the new realtor (Michael Azarian) and the the realtor receives his income only based on the signed leases.

4) HR is in charge of the Main St. properties and according to Mr. Mahdavi pays the leases from the empty spaces.

5) Union Medical will open at the end of February. The Child Care Center is currently operating on a limited capacity while waiting for the Department of Health inspection approval.

6) Trellis construction continues but, no specific estimation of the completion of the project was given.

7) All tenants on the Main St. are current with their leases.

8) It was asked what is the reason for the delays in leasing? Is it too high $/sf or something else? Mr. Mahdavi assured us that it is not the $/sf but declined to give us the amount while mentioning that the there is always a range for negotiation for the price. The delay in Union Medical was caused by the utility company.

9) Mr. Mahdavi told us that there has been several client visits on the island looking for the available spaces, some have come even several times but, no commitments so far. One problem appears to be the unfinished interior spaces. HR provides the basic infrastructure consisting of water, gas electricity and heat but there will be a start up investment consisting of finishing the interior floors, walls, doors, lightning, cabinets etc.

10) We were told that the companies the realtor tries to attract to the island include a hardware store, some kind of food related store, possibly a pet store and a diner/bakery/coffee shop

11) It was mentioned that Trellis had a very important function for the community. Residents had their social/professional, connections/meetings there. The community needs some sort of diner/coffee shop ASAP. It was mentioned by a participant of the meeting that the new Trellis when it is completed will become a white table cloth restaurant thus with much pricier menu. The question remains is Trellis ever going to be able to fill in its neighborhood diner function again?

12) There will not be any food operators this summer on the Southtown river front and even the food trucks, according to Mr. Mahdavi, were not profitable.

13) Other issues:

The benches on the Roosevelt Landings side are wrongly positioned and unkept. HR is responsible for their maintenance. Mr. Mahdavi did not show any interest in relocating the benches. (A simple thing to understand this issue is, do you want your back to face a door in your office? Try it, does it feel comfortable? or do you rather face the door? That feels more comfortable, right? Same thing with the benches, your back is facing the street where all the activity happens. For humans it feels more comfortable to protect your back.)

The longstanding issues of the missing direction signs was taken up again without any resolution.

The Catholic Church which,will take the floor above the new library space, is still in the drawing board. There will be no thrift shop, possibly some other kind of arrangement.

There was a complaint of the liquor store using ugly looking cardboard pieces on its window facing the Main St. Mr. Mahdavi will contact them.


Year 2015 achievements: Child Care Center lease.

We have to start operating in a better way and we surely can. I am suggesting that we start setting goals in each of our quarterly meetings and then we discuss in the meetings how to reach them and divide the work among us.

Our first goals are:

I simple direction signs, contact with RIOC

II bench maintenance, contact HR

III flower pots on the arcade, contact Roosevelt Landings

These are very small goals but, when achieved, will give us energy to tackle bigger ones.
The January 28 RIOC Board Of Directors meeting public session including a discussion of Main Street retail as well.

RIOC Director Michael Shinozaki said that despite the slowness in leasing Main Street Stores by Hudson Related, the process is much better than it was when RIOC controlled the retail space.

So, if you're a retailer with a great idea for a Roosevelt Island Main Street business, contact Cushman & Wakefield's Michael Azarian.

We want you. We need you. Please.