NORWALK, Conn. – Retailers are seeking a critical mass of potential customers willing to get out of their cars in central Norwalk before they’ll commit to leasing space, Paxton Kinol told the Zoning Commission recently.
“There’s a need and demand for restaurants but the retail itself in downtown Norwalk struggles,” Kinol said, attempting to explain empty storefronts in the existing Waypointe development as he worked to win approval for changes to the plans for the Waypointe South Block, Pinnacle at Waypointe.
Zoners have not yet voted on the requests made by Belpointe Capital for its 4.6-acre West Avenue property between Orchard and Butler Streets, formerly Loehmann’s Plaza.
Kinol’s team is seeking approval for a seven-story, mixed-use development with 330 apartments, 61,482 square feet of residential recreation area, 55,598 square feet of non-residential space (retail, restaurant, iPic theater and health/fitness club) and a 942-space parking garage. The property was approved in 2016 for a six-story, 109,157 square foot mixed-use development with 76 apartments, 16,820 square feet of retail and a 303-space parking lot, some of it below grade, a revision from earlier approvals.
Pinnacle, in its previous incarnation as the South Block, was expected to house a Container Store and a Nordstrom Rack. Those retailers backed out and Kinol is seeking a Zoning amendment to allow a personal services facility to meet the square footage requirement for retail in the development, saying that he has LA Fitness and 24 Hour Fitness competing to rent the space. The square footage requirement is based on changes made by the Zoning Commission in October.
If there were stores that could have gone into the Loehmann’s Plaza and succeed, the previous owner would have just re-tenanted the building, Kinol told the Zoning Commission, responding to criticisms inspired by the emphasis on a health club, rather than the expected retail.
“All of the stores went bankrupt,” Kinol said on Aug. 14. “…We bought a basically empty shopping center four years ago, five years ago, whatever it was. We have tried to lease it for five years. We brought an application for another shopping center. We couldn’t lease it at any kind of rent that made any financial sense so we added 156 apartments on it and we tried to lease it. We couldn’t lease it and make a project that was economically viable. So, we are back with 330 apartments and we have saved 110,000 square feet of retail. We don’t make money on the retail. We make money on the residential. And we are doing the retail as something to do for the community and the city to make the place a better place.”
Commission Vice Chairman Louis Schulman said that he doesn’t see any neighborhood-oriented retail in Waypointe, other than the Chase Bank; although the complex was developed to create a neighborhood, little has sprung up to take advantage of the influx of residents other than restaurants. Commissioner Galen Wells asked why no one has opened a dry cleaners, and mention was made of a possible grocery store.
Kinol, as he has previously, blamed Belpointe’s investment partners in the existing developments.
“We have not been in control of Waypointe I for 24 months,” Kinol said. “The investors there have for whatever reason chosen not to sign a lease with Ben & Jerry’s (and CKO Kickboxing)… My job, as I tried to explain to you last time, is to bring outside investment into the city of Norwalk. Phase I cost $147 million, which means it was a little more than $50 million in cash. I personally don’t have $50 million in cash so we bring in an investor.”
Carmel Partners, a California company, put up the majority of the investment money for Waypointe I and “when the building is done they control what they do with the building,” he said.
Alex. Brown Realty Inc., a Baltimore company, in Belpointe’s partner in The Berkeley and Quincy Lofts, two Waypointe sister buildings, one on Orchard Street and the other at 500 West Avenue.
“My job is to get the buildings built, get them up and occupied. Once they are complete, the investors for the long term will control what they do with them,” Kinol said. “…The same is true for every major building built in the city of Norwalk. You are acting like this is some new surprise but you can’t name a building that is not currently in control of its investors. We create a business plan, we go build and execute on that business plan and then we turn the building over and they control it as they like.”
“There was a deal for a dry cleaner to move in on Merwin Street,” Kinol said. “The space was actually built, directly across from Bobby Q’s (BBQ). For whatever reason the investor there chose not to sign the deal with the dry cleaners.”
Asked about Kinol’s comments, Carmel Partners on Aug. 28 issued this statement to NancyOnNorwalk:
“We developed The Waypointe with our partner because we are very excited about the growth potential of this vibrant neighborhood in Norwalk, CT. The retail component of this project, branded The Block at Waypointe, has redefined the lifestyle of Fairfield County with trendy new restaurants and upscale retail and services, including Barcelona Wine Bar, Colony Grill, Sedona Tap House, Bobby Qs BBQ, Chase Bank, Endurance House, JC Salons and Pinot’s Palette. In addition to the new name, The Block at Waypointe launched a new website, along with on-site events, promotions and ongoing programming throughout the summer and fall.
“Carmel has hired a local retail leasing broker, Saugatuck Commercial Real Estate, to bring additional exciting restaurants and retailers to The Block. Saugatuck has extensive experience evaluating prospective retailers, and strives to create a thoughtful mix of businesses which complement each other and contribute to the success of their neighboring businesses. We are confident that The Block is creating a great retail environment that will benefit the tenants, the neighborhood and the broader Norwalk community.”
The Block at Waypointe launched this summer.
Kinol said previously that parking was an issue for potential retailers, who didn’t want potential customers to have to walk too far to find their businesses. The 942-parking space garage planned for the Pinnacle at Waypointe is said to offer more parking than needed for the planned residents and businesses there.
Belpointe had a signed lease with The Container Store, but the company has had no same store sales growth for three years and its urban stores to worse than its suburban stores, he said.
“They are selling boxes, basically,” Kinol said. “So, they need a big parking lot where you can pull up in a big SUV right to the front door and load boxed into you SUV. They told us a while ago that they could no longer go forward because they are no longer doing urban stores…. I would think that the Internet is going to kill that business in the near future.”
Belpointe wanted Nordstrom Rack but “they felt that there wasn’t enough retail in the neighborhood to come by themselves,” he said.
The company likes to have a Nordstrom Rack near a Nordstrom, and given that a Nordstrom is expected to be an anchor at The SoNo Collection, “I would expect somewhere in Norwalk for a Nordstrom Rack to appear,” Kinol said.
As far as grocery stores go, Belpointe made an offer to Stew Leonard’s but Stew Leonard’s declined, he said. There was an offer made to Trader Joe’s, as the store’s Darien lease was expiring, but Trader Joe’s elected to stay where it is.
“I would guess that maybe not a full grocery store but something like a Garelick & Herbs would be very successful in the neighborhood,” Kinol said.
Attorney Jacqueline Kaufman, representing Belpointe, defended the developer.
“It’s in their best interest to bring the best retail that they can to the remaining spaces,” Kaufman said. “They want to bring things here that will make their residents happy and that will also make people in the greater community happy and part of the activity within the through block and around the blocks. I think they are committed to delivering that. They don’t have those yet but there is a commitment to bringing the type of retail that will support and enhance the community of the development.”
Although Planning Commission members objected to the proposed health club, the development already has the right to open one, she said. The issue is how the square footage would be counted.
LA Fitness is so successful at its Main Avenue location that it wants to open another facility in Norwalk, Kinol said. 24 Hour Fitness is virtually identical; they compete nationally in the same way that CVS and Walgreens do, he said.
“The market is not saturated, in fact the market is so plum they feel this would be another great spot to grow,” Kaufman said, responding the Planning Commissioners’ statements.
Retail is struggling on West Avenue for the same reasons that Sears and Woolworth’s are gone, Kinol said.
“We need to kind of reinvent ourselves and we think we are doing a good job of reinventing Norwalk,” Kinol said. “If you walk on the city streets in the morning or after work, there are hundreds of people walking around that weren’t there five years ago. There are people going for bike rides and walking their dogs, and just active out in the community and spending the money in the community. We are just trying to make the next step and complete the vision we had in 2011.”