2011

Posted by Bob on April 11, 2011 under Daily Blogs | 9 Comments to Read

One of today’s (4/11/2011) articles on Naugatuck.Patch.com solicits opinions from Naugatuck residents regarding what establishment is preferred at the former A & P Super Foodmart along New Haven Road and Cross Street. While it is certainly interesting to see the various choices, the article fails to discuss the realities of economic development, particularly in the retail sector. There are several factors and challenges associated with the revitalization of the entire Route 63 (New Haven Road) Corridor.

Regional and national retailers make decisions whether to expand in various markets based on corporate strategic plans and detailed demographic information. Big Y Foods, Inc. (“Big Y”) is a regional supermarket company with numerous locations throughout Massachusetts and Connecticut. The company acquired the business and undoubtedly the lease rights of the former A & P Super Foodmart in conjunction with a larger transaction effecting numerous stores in our state. Most Super Foodmarts are located in New York and New Jersey, and the company choose to sell some of its assets in Connecticut.

Regardless of what citizens and/or local leaders want to see open at the location, that decision will be driven almost exclusively by Big Y, a private developer; and market forces. While government can provide certain incentives (although such are very limited for retail development) and maintain land use control to a certain degree, the public sector possesses little ability to pick and choose where certain retailers locate in the United States. It is certainly Big Y’s right to move at its own pace or not for some time, depending on the details of the lease agreement with the entity that owns Crosspointe Plaza.

Almost all businesses that residents have mentioned in the Patch comment section make decisions after a careful analysis of numerous market characteristics including but not limited to population densities, buying power, average educational levels, access to major roads, transportation counts and proximity of competitors. Some retailers will automatically exclude a community from consideration based upon their merchandise and pricing points’ relation to demographic information.

Retailers often require investors. The same scrutiny will be applied when a company decides whether or not to provide financing for a project, particularly in the current economic climate. Almost nothing happens in national retail on speculation, or hope that a particular business will succeed in a certain market without some statistical possibility of profitability.

For those who are dissatisfied with particular businesses or types of establishments that exist in the Borough, there are usually logical reasons why. Most significantly, Naugatuck’s stock of businesses is what the current market will bear. It is not as if the Borough or the Naugatuck Economic Development Corporation actively seek one type of retail establishment at the expense of upscale shops, but private parties are free to lease space or sell property to interested parties. Aside from enacting land use regulations that can be defended if challenged in court, the Borough has minimal control to prevent a business from locating in an area if the intended use is allowed in a particular zone.

This is not to say that we can not make Naugatuck more attractive to certain retailers over time, but this will require a continued emphasis on smart growth principles, intelligent land use regulations and an overall improvement in the national economic climate. Having a public discussion on economic development is important as we must increase our commercial tax base. I welcome any comments and/or questions.

Nick Nagurney said,

Nice post Bob. Does the A&P space generate property taxes even when it is vacant? Just curious.

Thanks
Nick
Bob said,

Hi Nick:

Yes the former A & P property does still generate some tax revenue on the building itself. Unfortunately most of the personal property inside the structure has been removed such as computers, cash registers, etc.

Thanks for your question.

Bob
Bob said,

Nick:

For the October 1, 2009, Grand List, the A & P paid $15,698.46 in personal property taxes. The building itself is part of the structures comprising the plaza and the land underneath. The company owning the plaza paid $163,435.52 of real estate property taxes on the same October 1, 2009, Grand List.

Have a great day.

Bob
Nick Nagurney said,

Thanks for the reply!

Nick
Crystal said,

Hi Bob,
Is there anything that the community can do to make Naugatuck more attractive to national and regional retailers?

Thanks,
Crystal
Bob said,

Hi Crystal:

You ask a very good question that I would like to address in greater detail. There are some things we can do and some limitations. I am in Hartford currently, but will try to reply later tonight (4/13/2011) or tomorrow (4/14/2011).

Thank you.

Bob
Renee said,

Hello Bob,

At this point all we can do is hope Big Y moves quickly in filling the space, and filling it with something the community would benefit from. I think the piece about this in Patch gave great idea’s on what we; as the consumer would like to have there. Let’s hope the people over at Big Y are reading!

Regards,
Renee
Bob said,

Crystal:

There are some limited things we can do locally to become more attractive to national and regional retailers. We have actually taken two (2) important steps in recent years by forming the Naugatuck Economic Development Corporation (“NEDC”) and rezoning New Haven Road for commercial use.

Finally breaking ground on Renaissance Place would also change Naugatuck’s image significantly. The types of retail development would not necessarily conflict with the transit-oriented, smart growth concept of Renaissance. Increased property values and critical mass of shoppers from the surrounding area would occur outside the Downtown development area.

Improving our attractiveness can be done my smaller measures such as addressing blight, increasing artistic and cultural events and marketing our access to Route 8, the rail line and the Naugatuck River. Supporting existing businesses certainly would help also, but we know that people purchase goods and services for price, quality and convenience. Loyalty alone is seldom the reason most retailers succeed.

Years ago, the economy was very different and shopping patterns and opportunities allowed Naugatuck to be somewhat of its own market. Today, all economic development is regional. We are part of the Valley and Greater Waterbury regions. While supermarkets are a bit different in that they prosper by volume, large, national retailers in Naugatuck and the surrounding area impact the ability of new businesses to compete in our market. For example, it is unlikely that a chain with a current location in Waterbury (with a greater population density) would open in Naugatuck given the proximity.

Demographics matter significantly. While Naugatuck experienced growth in residents purchasing larger homes during the housing boom, the market has been impacted significantly by the recession. We also have numerous properties that are not owner-occupied, which reduces appeal to certain retail investors. The upscale, residential component of Renaissance and the completion of other higher-end subdivisions would help, but it is likely to be years before the national and statewide housing markets recover.

My post was meant simply to inform on some of the complexities and realities of economic development I have learned over the years. It really is a great topic to discuss, and one that I wish we spent more time doing so in Naugatuck.

Thanks again for your question.

Bob
Bob said,

Hi Renee:

I agree that it would be in our best interest if Big Y moved quickly. As I lifelong “East-sider”, the lack of a supermarket has been a major inconvenience.

There is routine communication between our Naugatuck Economic Development Corporation (“NEDC”) President and commercial brokers. I will inquire as to any new updates from the Big Y folks.

The Patch article is certainly a great way for citizens to express there preferences. My post and subsequent comments were not intended as a criticism, only that the process of economic development involves multiple factors, many of which are beyond local control.

My personal belief is that the redevelopment of the Hershey property will define the New Haven Road Corridor. I have spoken with multiple business owners who have stated they are anxiously awaiting what will happen with the property. I can not speak for Big Y, but I am sure that factors into the company’s planning.

Thank very much for your comment.

Bob