The Real Deal New York

Getting in on the ground floor

With New Rochelle’s master plan now in motion, brokers are looking to entice retailers back downtown — with the help of millennials, of course
By Elaine Podfeldt | January 04, 2018 11:00AM

A rendering of RXR’s 587 Main Street in New Rochelle

When Luiz Aragon, commissioner for development for the City of New Rochelle, looks around him, he’s excited to point out more heavy construction equipment than the city has seen in years.

“The cranes are up in the air,” he said. “Right now, we have about five construction sites, which is huge for us. In the past 10 years, you didn’t see a single construction site in downtown New Rochelle.”

Now underway, a master plan the New Rochelle City Council unanimously approved in December 2015 aims to attract up to 20,000 new residents over 10 years. The plan was developed by the city in cooperation with a joint venture of private developers RXR and Renaissance Downtowns (see page 16).

Although New Rochelle is known more for sleepy shops and discount stores than trendy retail, local officials hope the makeover will turn the city of 80,000 people into a mecca for both millennials and retirees looking to downsize into the type of live/work/shop environment that’s sprouting in suburbs around the country.

But with 1 million square feet of retail space planned to meet the needs of the new residents the revitalized downtown is designed to bring in, New Rochelle finds itself in a bit of a chicken-and-egg situation. The city needs the influx of new residents in order to lure in tenants, but in order to draw those people in, New Rochelle needs an attractive mix of retail and restaurants already in place for them.

Build it and they will come

To sustain the kind of vibrant retail and restaurant scene city planners envision, New Rochelle’s downtown will need more foot traffic.

“Everyone wants retail to come in,” said the city’s mayor, Noam Bramson. “Retail is only going to be interested in coming in if you have people walking down the street, people that walk in and out of your store or restaurant.”

The partnership with RXR has been crucial to that cause, he said.

RXR broke ground on a 28-story mixed-use tower at 587 Main Street in November 2016. Located on the site of the former Loew’s Theatre in downtown New Rochelle, it will have 280 residential units.

In January 2018, RXR announced that RM Friedland, a Westchester-based commercial real estate brokerage, will be the exclusive retail leasing agent for 587 Main.

Four street-level retail units, ranging in size from 900 to 5,800 square feet, are available for lease, according to a statement from the company. The project has approximately 14,000 square feet of retail space on the ground floor, a 10,500-square-foot black box theater (which offers virtual-reality entertainment) on the second floor, and 294 parking spaces. The listing agent declined to share the asking rents. Construction should be completed by early 2019, which will mark the start of full building operations.

RXR also joined with New Rochelle this past summer in announcing a new project to be built at the corner of Church and Division streets with two 28-story residential towers that have ground-floor retail. The city expects a site plan in the first quarter of 2018, Bramson said.

“When you have a major developer making a major play in New Rochelle, that sends a signal to the broader marketplace,” Bramson said.

But it’s not just pulling in new merchants that’s important, he added. “It’s also important to talk about existing retail and make sure they continue to thrive.”

To that end, the city has created a “featured business” program where it provides recognition to local businesses that get good reviews on Yelp and other social media outlets, the mayor said. The program, launched in November, will offer the businesses marketing support and point customers to them via window decals and an interactive map.

New Rochelle is also adding amenities that will make it more appealing to pedestrians. For instance, the city is installing Wi-Fi kiosks in the downtown area. The kiosks should be completed by the first quarter of 2018, Aragon said. In addition, the city is embarking on a bike share program.

Cultivating a workforce

To make the city even more attractive to millennials — and therefore tenants — the city is trying to spur activity in industries where twenty- and thirtysomethings will want to work, betting big on the arts and technology sectors, Aragon said.

A rendering of retail space at 587 Main Street, where RM Friedland will be the retail agent

In October, the city approved site plans for NewRo Studios, a six-story, 73-unit building with live-work space for artists in the “Burling Triangle,” next to Burling Lane. The plan was proposed by Anthony Hammel, co-owner of New Rochelle-based ELD Properties. The project is expected to break ground this spring.

“We understand that the artist community is really the underpinning in any change in the community,” said Aragon. “In order for them to come here, they need to be able to afford it.”

The city’s Interactive Digital Environments Alliance (IDEA) is creating a network of facilities in the hopes of attracting young talent. That includes projects like a 5,000-square-foot motion-capture and maker lab that’s in the works downtown at 542 Main Street, where New Rochelle Trust Co. was once located. And a 3,000-square-foot space in a property the city owns above the train station that has been renovated into a lab suited for the foodie science of molecular gastronomy.

The city is working with New York University and the Tisch Foundation to encourage the growth of the molecular gastronomy industry in New Rochelle, Aragon said.

Separately, there’s a 12,000-square-foot tech coworking space under construction in New Roc City retail and entertainment complex.

Finding the right tenants

To figure out which types of retailers and eateries to target for New Rochelle’s new inventory, the city is working with consumer analytics firm Buxton, based in Texas, to determine what would be a good fit for the community. Buxton’s methodology evaluates the shopping and dining habits of existing residents to uncover merchants whose presence they would support.

“We are in the process of reaching out to those retailers to make sure they are aware of New Rochelle,” Aragon said. “We want to accelerate retail development.”

Units at 587 Main are not available for lease yet, but the agent is “starting to talk to retailers about the space,” says Garry Klein, associate real estate broker at Houlihan Lawrence in White Plains.

“They are pretty big spaces,” Klein said, adding that a restaurant offering some entertainment, such as a Buffalo Wild Wings or Dave & Busters, would do well there. “I’d guess it would be middle of the road,” he said. “It is certainly not going to be high end.”

“They will probably want to feed off the entertainment,” he added, noting the presence of the black-box theater that’s coming in nearby.

Another 7,000 square feet of retail space will be added on the ground floor of a 27-story residential tower with 282 apartments at the former site of the city’s fire station. The station was relocated from 45 Harrison Street, near Interstate 95 and Huguenot and Main streets, this past summer.

But New Rochelle will have to work hard to counter years of decline in its retail sector.

“The retail has been troubled for many years,” Klein said. “Much of it was dollar stores and clothing stores that were out of favor. There was a little bit of a resurgence before the last crash. There was a little bit of a restaurant resurgence on the side streets, but there was no pulse. It was kind of sad.”

Outside of new development, existing spaces on Main Street currently don’t lend themselves well to national retailers, Klein said. However, he added, “we’re starting to see a resurgence of some of the mom-and-pop retailers who want to come back, who have a lot of faith in the city and want to get in on the ground floor and be next to some of these properties.”

Rental rates for some of the new properties will be 20 to 30 percent higher than existing rents, Klein said. The range is now “in the mid- to high-$20s through mid-$30s.”

Promising developments

So far, the changes New Rochelle has put into motion seem to be making a difference as the city looks to recruit retailers. “The retailers who are talking with me would not have picked up the phone in the past,” Aragon said.

Within walking distance from downtown is another development, Pratt Landing, where Twining Properties aims to turn a dilapidated waterfront district into New Rochelle’s answer to the South Street Seaport.

The developer began getting community input into how to revamp the 27-acre site in the Echo Bay district this past fall.

Current plans are to build 450 residential units, a 200-bed hotel and 100,000 square feet of retail, Aragon said.

“This is going to be our gateway to the water,” he added.

If all goes as planned, the project will break ground in 2019, and the first phase will be completed in 2020, he said.

Many leaders in the Westchester community view New Rochelle’s master plan as a model that others could potentially follow. The city was able to get input from more than 1,000 local residents using crowdsourcing and other methods.

“It’s a city on the move,” said Bill Mooney Jr., president and CEO of the Westchester County Association.