Finally, ferry terminal retail afloat

<i>After years of bare storefronts, St. George shopping spaces poised to come back to life </i>

For nearly five years, the retail stores at the ferry terminal in Staten Island have sat mostly empty as thousands of commuters have swarmed by waiting around for the boat to Manhattan — the perfect captive shopping crowd.

But with several leases signed and final discussions underway with national restaurant retailers, the St. George Ferry Terminal — a roughly 20,000-square-foot space that has caused headaches for the city since a $300 million-plus renovation project was completed in 2005 — appears poised to finally come to life.

Officials at the city’s Economic Development Corporation, which took control of leasing the property late last year, say they expect at least two food retailers to move into vacant retail spaces by the end of 2009.

Right now, the only tenants are a post office and magazine shop, both of which will remain at the terminal. The Manhattan ferry terminal, which is also being managed by the EDC, has by contrast already seen a jump in retail activity.

At St. George, multi-year leases have recently been inked with three local food retailers — the Statue of Liberty Deli, Island Soft Pretzel Stop and Fresh Juice & Ice Cream Delight — and a shoe shiner called the Cobbler.

Lee Winter, a vice president with the EDC who is spearheading the project, said spaces at the terminal, which range in size from 420 to 5,079 square feet, are going for roughly $80 a square foot. A spokesperson for the EDC, David Lombino, said most tenants are signing 10-year leases.

Final negotiations are also in progress to bring to two national chains to the terminal, Lombino said. He declined to identify the chains because the deals have not been finalized, but said that one is more café-style, while the other is a fast-food establishment.

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While the opening dates for the stores aren’t set in stone — it will take the new tenants time to outfit the spaces — the EDC forecasts that two retailers will open by year’s end, with others to follow shortly after, said Lombino.

The arrival of food vendors at the ferry terminal marks a victory for the EDC, which wrestled control of the terminal’s retail space from the city’s Department of Transportation after years of what has been described in City Council hearings as inept management that resulted in lost rental revenue.

And though the EDC has seen progress, the more than year-long process of getting leases signed has been challenging.

Not only did it take on the project in the midst of the credit crisis, it had to update the spaces to meet industry standards. That included adding gas, electricity and water connections. In the past, the city tried to get tenants to pay for the upgrades, but it changed course to lure tenants. In addition, the EDC has been saddled by a strange, pre-existing lease that restricts the sale of coffee at the terminal to only three retailers. EDC officials say they have honored that restriction with the new tenant mix.

Winter, who before joining the EDC in 2007 spent four years at Cushman & Wakefield, represents a number of city-owned properties, the highest profile of which is the Brooklyn Army Terminal. But leasing the St. George ferry terminal was different.

“Even though we lease millions of square feet of city property to businesses, this is the first time we’ve dealt with leasing space for food and beverage concessions on this kind of level,” said Winter, who in his position at the EDC manages the city’s only team of real estate agents. “It’s been a real learning experience.”

EDC brought on retail specialist Jeanne Giordano, who assisted in the retail strategy at Grand Central Terminal, as a consultant. EDC board member George Twill, the president of Twill Realty, was also involved in the project.

Although it appears the terminal may finally be transforming, several of the 12 spaces have yet to be filled, including a restaurant space that if joined with an adjacent space would total 6,346 square feet. “We’ve been in contact with a number of potential tenants,” Lombino said. “We’re still trying to find the right fit.”