newjerseynewsroom.com

BY LIBOR JANY

NEWJERSEYNEWSROOM.COM

TRENTON — To the naked eye, it would seem that Trenton's retailers are continuing to slog through the economic downturn, as vacancy rates in Mercer County have soared from 11.6 percent to 17.2 percent since 2007, according to analysts. This, despite rents across the county slipping to $22.43 per square foot in the third quarter of the year.

The glut of shuttered storefronts along the city's two major retail arteries of East State Street and South Warren Avenue underscores the challenges that developers and city officials face in revitalizing the once bustling downtown State House district.

"Basically New Jersey is over-stored. And certainly Mercer County is over-stored. There's so much other retail space (outside of Trenton) in Mercer County that has greater accessibility to buying power," said James Hughes, dean of the urban planning and public policy school at Rutgers University. "Trenton has a smaller and smaller share of the retail market. Forty years ago it was a retail center, now it's only a minor player."

Mercer County has about 4 million square feet of retail space, according to a third quarter survey by Reis Inc., a Manhattan-based real estate research firm, with 700,000 square feet sitting vacant. The vacancy rate in Central Jersey was 10.3 percent, according to the survey.

Recent efforts to redevelop the downtown area have been hampered by incomplete data about the health of the city's retail environment.

A separate but related third-quarter report shows the national vacancy rate has dropped since 2007 to 10.9 percent, though the study points out that those numbers are somewhat skewed by the surfeit of preleased space that hit the market in the third quarter.

"The things you see as vacancies, I call opportunities," said Taneshia Nash Laird, executive director of the Trenton Downtown Association. "There was a shift in the '50s to the suburbs, and now there is a shift back to the central business district. And now if we are prepared, we could benefit from that.

"I do know that there is more of a movement now to the central business district," she said. "We need to do all we can to make sure that we incentivize and market (Trenton) enough to folks so that they know that we are an opportunity for them."

The Reis Inc. report also looked at other markets, including Northern New Jersey, Philadelphia and Pittsburgh, where the vacancy rates were 5.6 percent, 9.4 percent and 10.3 percent, respectively.

Amid grumblings from local business owners attribute the listless market in Trenton to high rents, Anne LaBate of Segal-LaBate, a Trenton-based commercial real estate firm, contends that vacancies persist because many startup owners simply lack the skill set to run a business over the long haul.

"We have a lot of aspiring small businesses, which haven't done their homework. In fact, if you cannot provide a bank reference, or some sort of a business plan, then the (building) owner probably shouldn't be talking to you," LaBate said. "It's a tough time and landlords know it, and in my experience they're willing to listen. They're willing to make concessions.

"I think (it's) the fact that we're a company town, in the sense that the state of New Jersey is a company, and in our case the company is in extremely dire straits," LaBate said.

Unfortunately, she says, there is a "disconnect there" between business owners and landlords.

Joseph Ridolfi, president and CEO of Joseph R. Ridolfi & Associates, LLC, agrees but said this is to be expected.

"If you talk to the owner he says, 'I'm not getting enough.' And when you talk to the tenant he says he's paying too much. That's the basis of negotiation," Ridolfi said "The silver lining in this economy is that landlords are giving concessions, but the tenant will never tell you that."

But, both groups are decrying a controversial ordinance passed last year banning downtown parking before 9:30 a.m., and many feel is constricting business. According to Segal-LaBate Realtor associate Roland Pott, the law was enacted because "state workers (would) feed the meter all day, which hurts the retailers by creating a shortage of short term parking."

"When shopping becomes less convenient, shoppers go to areas where they can park more easily," said Pott. "The city could do a better job at enforcing the parking situation with meters."

Several complaints from downtown business owners have reached Nash Laird in her office on East State Street. She said that TDA is working with the city's department of housing and economic development on a plan to amend the ordinance.

"It was probably a knee-jerk reaction to the fact that we believe that local employees have been abusing parking meters," she said of the ordinance. "It was again something that wasn't necessarily very thoughtful."

For its part, the current city government is trying its best to distance itself from the contentious law, which was passed under the previous administration.

"The previous administration's revisions to the code did not directly address the issue (of parking) and, in fact, had significant unintended consequences for the local business community," said current Trenton mayor Tony Mack, in an emailed statement.

"Our administration is currently working with the Trenton Downtown Administration to try to do all we can to forge again to improve the situation," added Mack's spokeswoman Lauren Ira, later. "We want to make sure we meet everyone's needs, and do it a timely manner, because we inherited the issue."

Some say that the city is not off the hook yet.

"I think one of the most useful tactics that Trenton could take is revamping its 'Urban Renewal Vision and Strategy.' Under a new 'Vision' the city could offer financial incentives to help with sustainability costs of new and existing businesses." said Barbara Horne, who until recently owned a cafe on South Warren Street. "One of our biggest challenges as a Trenton business was our PSE&G bill. The city could work with PSE&G to offer urban renewal incentives that allow small businesses an opportunity for sustainability and growth.

There are so many reasons for the vacancies, but the simple answer is most likely money," she adds. "To be more specific, a lack of disposable income due to the socioeconomic disparities and, of course, the recession. People aren't spending like they used to."

This view is echoed by some in the real estate community.

"They need a more streamlined process to deal with the city. The process to open your business is time-consuming and costly," said Mike Pratico, Jr., a broker with Richardson Commercial Realtors, LLC.

"A lot people still believe that downtown Trenton has made significant progress and still has a lot of potential," he said.