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Street smarts

Local leasing revives small downtown center in Connecticut

By Maura K. Ammenheuser

MIDDLETOWN, Conn. — When Tony Palmieri wanted more walk-ins at his florist shop, he had to move. Howarth Floral had been in the same spot on Main Street for decades, but the block looked "a little scary" and had vacancies, Palmieri said. However, "if I moved, I was looking at tripling my rent."

Eventually he relocated to Main Street Market, a small, innovative shopping center blooming in a former department store farther down the street in this eclectic town of 43,000, located 20 miles south of Hartford and about an hour and a half north of New York City. Ken Gronbach, the center's owner, "made it very easy for us to move in," offering a low rent until the business took root, Palmieri said.

In the nearly three years since, Palmieri's walk-in business has blossomed, plus he's become an interior designer, selling home accessories as well as flowers from the 1,300-square-foot shop. Sales have tripled since his move; Palmieri expects to gross $275,000 this year.

Joining Main Street Market is "the best thing I've ever done," he said.

On paper, the center seems more like the craziest thing anyone has ever done.

Gronbach is not a developer but an advertising exec. His company overhauled Main Street Market when the previous operator of the circa-1865 building couldn't make the center work. Gronbach's business occupied several floors, and it was cheaper to buy the place than move. He couldn't get financing at first and relied on revenue from his ad business to keep the project afloat.

Gronbach insisted on eclectic, unusual tenants and gave some discounted rents as an initial boost, even though several beneficiaries were twenty-somethings who had never run shops.

All this in a downtown that, like many others, had suffered a decline.

Conventional wisdom dooms Main Street Market to failure, but in reality, it works. Locals say that's because Gronbach has uncanny retailing instincts and cares deeply not only about his pet project, but about Middletown, too.

"He's always been a high achiever, he's very motivated and wants to get the job done," said Larry McHugh, president of the Middlesex County Chamber of Commerce. "He wanted to do a first-class facility."

"In order to do something like this you've got to have faith," Gronbach acknowledged. "If we had followed real estate rules, we would have never done it."

Gronbach heads KGA Advertising, a 21-year-old, 30-employee marketing firm specializing in retail strategic planning.

He grew up here and was disappointed to see the downtown slide into disrepair and irrelevance. When his company took over the building that now houses Main Street Market, the first challenge was decor: A previous owner installed such ugly lighting and colors that nobody ventured in.

"It was very grim. Blue paint and black rubberized floor," said Terry Concannon, downtown manager for Main Street Middletown, part of a national program called Main Street USA that helps to revitalize city cores. "Very uninviting,
Concannon said.

KGA's creative department tackled the center's redesign when architects' estimates were too pricey. They put in brighter lighting, repainted walls and found bargain hardwood flooring.

Then came the merchandising mix. "We weren't looking for any of the chain stores," Gronbach said. He prefers one-of-a-kind boutiques, and describes Main Street Market as an "incubator" for fledgling retailers and encourages them to take chances with their merchandising.

Main Street Market's owner Ken Gronbach brightened up the center by adding hardwood floors and new lighting. He also insisted that it have an eclectic, unusual tenant roster.

The redeveloped center opened in June 1998. Though several spaces have turned over, today Main Street Market has 14 tenants in 29,000 square feet. They include a children's clothing shop, a paint-your-own ceramics boutique, a hair salon and a branch of the state Department of Motor Vehicles. Gronbach said he gives the latter free space because of the traffic it brings in.

Other tenants include:

It's Only Natural, what Gronbach called the center's "showcase," a 4,000-square-foot health food market that also peddles gifts, clothes and books.

"It's probably the only place you can buy a head of lettuce and a dress," laughed Ann Marie Sataline, the store's owner.

She and her husband, Donald, moved their business from another downtown building that landed in bankers' hands when its owners had money and legal troubles. Sales are growing, Sataline said, especially at lunchtime, and her customer base has broadened.

• A vegan restaurant, also called It's Only Natural. It shares a corporate history with the health food market, but it's a separate business and occupies space on the opposite end of the center.
  
  
• The Music Exchange, which offers new and used CDs and vinyl records. It opened in August. Owner Arun Ranganathan chose Main Street Market because he knew the people involved; he used to work at the food market. "It's sort of a community of businessmen and women who work in harmony," he said. Plus, "I feel like I'm part of something that's growing."
  
  
• James Bean, a 1,600-square-foot coffee shop and cafe. Brothers Kurt and Marc Vendzian opened it in early 2000 after redesigning a previous coffee shop.

Business has doubled in eight months, Kurt said, to about 200 customers daily, twice that on the two days per week the DMV is open across the hall. He wouldn't reveal sales figures but said, "We're doing OK. We're not worried."

Few people would quantify sales, but David Cahill, manager of Main Street Market, said tenants' sales levels are up 12% to 28% over last year. Rents are typically $12 per square foot, Gronbach said. He called the Market "a break-even thing. We're not getting rich on this. My wife [Linda] and I made an investment in Middletown."

Today they have $1 million in equity in the center, he said. Eventually Gronbach supplemented his own investment with financing from a New Haven bank and tax-increment funding.

Middletown's commitment to improving its downtown is one reason why Main Street Market didn't tank.

"You can't separate them. Main Street Market contributed to the health of downtown" and vice versa, Sataline said. In recent years, Middletown—which can be described as industrial, new age and ethnic all at the same time—joined the national revitalization program and 35 new businesses, including a 12-screen theater, a $10 million police station and a menu of restaurants, have opened downtown. The city is also home to Wesleyan University, a small private college half a mile from Main Street Market.

It certainly doesn't hurt the situation that there is no large shopping center in Middletown. The largest center serving the area is the 1.2 million-square-foot Westfarms Mall in Farmington, about 12 miles away. The next biggest is the 911,000-square-foot Meriden Square, eight miles away in the neighboring town. Both are anchored by Lord & Taylor, J.C. Penney and Filene's. Westfarms also includes Filene's Men and Furniture stores and Nordstrom; Meriden Square has a Sears.

Gronbach acknowledged that Main Street Market could never compete with those malls if it tried to duplicate their tenants, another reason he focused on unique local retailers.

Observers say there are other reasons for Main Street Market's success.

"The appearance, and a pleasant environment," Concannon said. Plus, "it's the only place you can buy children's shoes in Middletown."

"There's a good mix of retailers there. It's airy, it's clean," McHugh said.

Retailers attributed their own strengthening sales in part to personal attention they get from Cahill and Gronbach.

They advised Ranganathan on how to secure a business loan, for example: "Most landlords are not going to do that," Ranganathan said. "Most landlords are not going to spend two hours helping you reword your business plan."

They also helped the Vendzians develop new menu items—smoothies, ice cream cookie sandwiches—to boost sales after the DMV cut its hours from three days to two each week, Kurt said, adding that it's expected to resume the three-day schedule soon.

KGA "made it impossible for me to say no" to moving into Main Street Market, Palmieri said. "They're more interested in seeing Main Street thrive than in making money from it."

 

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