NORWALK, Conn. – Information is being sought by the Norwalk joint committee considering the ins and outs of changing a long-standing land agreement to accommodate the developers of a hoped for-be mall on the long-vacant 95/7 site, from the implications of building part of the shopping space over a road to the potential for success for the proposed classroom space and the possibility of changing Enterprise Zones.
This after being told that there is indeed a market for luxury malls and that a boutique hotel, as described by General Growth Partners (GGP), would likely be good for SoNo.
The joint committee of Common Council Planning Committee members, Redevelopment Agency members and Planning Commission Chairman Torgny Astrom is focused on what is allowed on the property – Parcels 1, 2 and 4 of the Reed Putnam Urban Redevelopment Plan – in terms of how much square footage of the development is devoted to what. This is to develop a consensus between RDA and Council members as to how the city’s Land Disposition Agreement (LDA) will be changed to allow GGP to go forward.
The committee on Monday discussed logistics and arranged two meetings for Saturday mornings, on Jan. 24 and 31. RDA Executive Director Tim Sheehan said he would contact the Department of Economic and Community Development (DECD) to inquire about Enterprise Zones, which is relevant because GGP would get tax breaks if the mall is constructed on the property.
Planning Committee Chairman Doug Hempstead (R-At Large) asked about that. “I have heard, I won’t say a reliable source, about the state and promises for reimbursement. … Slowly but surely it has been cut back on.”
Hempstead said he has heard municipalities “have not been getting back what they originally signed on for, not the proportion they thought they were going to get.” Hempstead asked for information on how much an Enterprise Zone can be changed.
GGP would pay no real estate taxes for its first two years after construction under the Enterprise Zone rules. The state reimburses eligible towns for up to 50 percent of the revenue lost, according to DECD’s website.
Then there was the question of the construction proposed for over North Water Street, which divides the land owned by GGP.
“I think we’re going to need some direction and understanding of what their air rights entail as part of the approval process with the city,” Hempstead said. “… Find out if they have done any kind of conceptual other than a line drawing.”
It’s possible – not probable, but possible – that Metro North would have an issue with such a construction, he said. Sheehan said that Tighe & Bond had been hired to study that issue, as the company designed the newly built road and is fully aware of the issues surrounding the incline and truck traffic.
Astrom said that school buses come and go from the Maritime Aquarium on that road.
“My assumption would be they are not going any lower than the railroad bridge and that they understand there is an incline change in the grade significantly to accommodate truck traffic to be able to get beneath what is there,” Sheehan said.
Robert Gibbs, a consultant, told the group over a speaker phone that there is merit in GGP’s plan.
“The shopping center industry has been very strong for luxury retail centers, especially malls that are anchored with upscale department stores like Nordstrom’s and Bloomingdale’s,” he said. “The typical luxury center is producing two to three times the sales per square foot of mainstream moderate shopping centers. They are being built at a slower pace than they were before the recession but the centers that are being built tend to be upscale luxury type shopping centers.”
Mid price-point shopping malls, typically anchored by a Sears, J.C.Penney, Target or Macy’s, tend not to be doing as well because middle income families haven’t seen their incomes grow much in the last eight or nine years, he said.
Reports of the death of malls are exaggerated, he said. There are 1,800 malls in the United States, and 1,500 are “still very strong,” he said. Most of the dead malls were in “really rough areas,” he said.
“I don’t think malls are dead. I think malls will be around for a while. Those that have died I think were just because of their location,” Gibbs said.
About half of the open-air “lifestyle centers” that proliferated in the 1980s have closed, he said, and the ones that closed did not have an anchor department store. GGP is leading a trend for in-fill malls, he said.
“On a square foot comparison, the luxury malls are still generating twice the sales per square foot. Malls offer a certain amount of convenience that a lot of shoppers are looking for, and once they get in the mall they do a lot of spending,” Gibbs said.
Hempstead asked if Gibbs’ statement from last spring, that development with mixed uses is more likely to succeed, is still true.
“I still think a mixed use center is less risky than just a retail center all by itself,” Gibbs said.
Research shows that GGP’s plan to put a hotel on the property may be successful, he said.
“General Growth recently did an article on hospitality with luxury centers and estimated that their hotels perform 20 to 30 percent higher when they are combined with luxury shopping centers over when they are standing alone by themselves,” Gibbs said. “… It’s a very, very good use to have in a downtown setting, to have hospitality.”
One of the best examples in the country is the Easton Town Center in Columbus, Ohio, he said.
It should be a win-win for everybody, as the surrounding restaurants help the hotel, he said.
“There are many business travelers right now that will go slightly out of their way if, once they are in a hotel, they can go down the elevator and go shopping and dining with a selection of shops rather than being out on an interstate interchange sort of by themselves. … According to studies we have seen, hotels in such locations perform 20 to 30 percent higher than equivalent hotels in suburban locations,” Gibbs said.
Sheehan gave the committee an encapsulated version of the city’s own studies, a mountain of paperwork for them to ponder.
Sheehan said the rental market study showed that the effect of all the housing that is currently being built would be that vacancies would jump to 10 percent, and then stabilize back in the 5 percent range Norwalk is used to. The retail study said Norwalk continues to be the second largest retail market in Fairfield County, with a low rate of turnover, he said.
The hotel study showed that a boutique hotel, with a marquee bar, would do well, he said. This would compare to Hotel Zero Degrees on Main Avenue, but with a brand name, he said.
Hempstead asked him to get some information on how classroom space works in similar situations. He also wanted a comparison between GGP’s proposal and the Easton Town Center.
“The goal is when we leave at the end of the day, that we have vetted some stuff, have this proposal but at the same time have a wealth of information to distribute to everybody,” Hempstead said.