Strategy for Growth in Urban Business Corridors
Written by Lawrence A. Kenney, AMS Consulting LLC

When we look for ways to stimulate business development in our urban corridors, particularly within inner city neighborhoods, we are faced with the fact that each district has unique market, real estate and land use characteristics requiring equally unique strategies. Making the task less daunting, however, is that common business types exist or are emerging in these corridors that represent logical starting points for promotion of business development. In the Parkville neighborhood of Hartford numerous storefronts sell Portuguese baked goods while this market niche is manifested in Fair Haven in New Haven by the growing number of restaurants catering to emerging Central and South American resident market. Or greater interest, particularly in developing strategies for such districts, is that many of these businesses fit into the existing real estate profile of urban corridors and learn to evolve and thrive in both good times and bad. The net result is that commercial vacancies drop, real estate values rise, reinvestment is encouraged and neighborhoods are energized.

Neighborhoods often cite the strong need for banks, pharmacies, supermarkets or major chain stores all of which require large tracts of land. However, the vast potential for new business development and consequently opportunity for stabilizing real estate values is found in smaller scale formats. Within inner city corridors, these start-ups or expansions generally conform to the following: commercial space between 500 to 2,000 square feet; reliance on walk-up trade; ability to adapt to existing building prototypes; little or modest need for off-street parking; and linkage with immediate local market (0.5 mile radius or less). As districts evolve and markets expand, need for bigger space and more parking increases.

People need and desire access to food in all neighborhoods, which explains why small scale restaurants and other food establishments (bakeries, specialized food markets, delis, fast food, convenience stores) rank highest in new start-ups in urban corridors. Excluding housing, food consumption constitutes the highest expenditure of inner city households representing as much as 35% of total consumer expenses. It is also the business with the highest turnover, but greatest appeal to new business entrepreneurs, particularly recent immigrants.

Favorite prototypes for food establishment layouts within neighborhood urban districts range from 800 to 2,000 square feet and can represent as much as 25 to 30% of the retail-service mix of a corridor. This base of business is most prominent in more ethically defined communities where walk-up trade is prominent. Examples in Connecticut range from Grant Avenue in New Haven and Park Street in Hartford catering to a diverse but well established Latino communities to Broad Street in New Britain, which continues to serve and East European market that immigrated to the area 30 years ago or more. Most of these food establishments are independently owned and operated and adapted within existing buildings. New construction is reserved to a growing number of chain establishments targeting inner city markets when traffic counts and site criteria are met.

Start-ups are also influenced by prevailing building characteristics in urban districts. Personal services such as nail and beauty salons work well within small footprints in mixed-use properties and require little start-up capital. Culture and fad appear to be the driving force behind their prevalence in urban markets, but they are also surprisingly resilient to economic swings and can be seen in great numbers along major urban corridors such as Albany Avenue in Hartford, or Whalley Avenue in New Haven,

Similarly, local cultural demand and younger suburban demographics has promoted a wave of youth-oriented apparel stores in small in-fill storefronts featuring the latest Hip-Hop styles. Other popular small format storefronts responding to market niches of urban neighborhoods include religious goods and Botanica stores, music and pager/cell phone stores. Properties with larger ground floor footprints of 2,000 to 3,000 square feet attract sit down businesses and even karate and other self-defense schools. The latter has helped fill many large and glaring vacancies in urban business districts including a prominent historical property in the Greeneville neighborhood or Norwich.

Meanwhile, service businesses responding to local community demand are representing an ever-expanding component of the business mix within inner city neighborhood districts. These include accountants, insurance brokers, travel agencies and real estate agencies as well as health-related businesses. On East Main Street, an inner city corridor in Bridgeport, numerous chiropractor practices have opened including one that is moving back to the area. Another growth area is found in the lucrative calling/money transfer/check cashing businesses that cater to rising number of Latino immigrants in urban neighborhoods. Success of these businesses is linked with knowledge of how to deliver specialized services and needs to the immediate community. In fact, on Grand Avenue in New Haven, the service sector represented the biggest gain in net new businesses in a 20-year period.

As these smaller, possibly less glamorous, new businesses begin to fill in the vacant pockets of urban corridors, many of which are small and lack dedicated parking, real estate values are stabilized and re-investment in both the corridor and neighborhood is stimulated. In Norwich’s Greeneville corridor it is such an evolution that has helped reduce significant vacancy to just a handful of storefronts.

In short, matching emerging, yet proven business types with opportunities in a corridor is key to promoting vibrant urban business corridors. Linking these opportunities with interested investors or entrepreneurs is how you unlock reinvestment in the neighborhood.

© AMS Consulting LLC , 2005.