A Time of Change

Do you remember Chance the Gardener? The childlike protagonist of Jerzy Kosinski’s novel Being There (played by Peter Sellers in the movie) is cast out of his secluded mansion existence and into the noisy world beyond its walls. Purely by accident, he finds safe harbor with mega-wealthy powerbroker Benjamin Rand and his wife, Eve. The Rands mistake Chance the Gardener for “Chauncey Gardiner”—the right sort of old-line name—and mistake his simple garden talk for optimistic parables about a troubled U.S. economy. “In a garden, things grow,” says Chance, “but first they must wither; trees have to lose their leaves in order to put forth new leaves, and to grow thicker and taller and stronger.”

So what is the season on Greenwich Avenue, our great commercial garden? Why is it losing so many leaves? “There have never been so many storefronts for rent since the inception of Greenwich Avenue,” observes Ron Brien, a Greenwich real estate expert and founder of Alliance Commercial Property. “Even when the market crashed in 2008—there were vacancies, but nothing on this level.” Brien puts the number of empty storefronts on and near Greenwich Avenue at about thirty.

Greenwich Avenue has always ebbed and flowed—mostly flowed. But last year, during a robust economy, it faltered, notably in the area of apparel. The great shock was the May departure of Ralph Lauren from its palatial digs at 265 Greenwich Avenue. Michael Kors, Janie and Jack, and Free People closed in the summer, and Claire’s and Calypso St. Barth went away in the fall. In January the trend continued, with the windows at Kate Spade and Lacoste going suddenly blank. And these are corporate retailers that should ordinarily be able to bear the Avenue’s heady cost of doing business. With rents ranging from about $70 to $150 per square foot, Greenwich Avenue ranks among the top five costliest streets in the country, up there with Fifth Avenue in New York and Sand Hill Road in San Francisco.


WHERE’S MY AVENUE?

“THE QUESTION I GET LATELY IS, WHAT’S HAPPENING ON GREENWICH AVENUE WITH ALL THE VACANCIES?” says broker Marshall Heaven of M. H. Heaven Real Estate in Greenwich. “Well, this vacancy factor is happening all over the country. If you go around to all the great-name streets in the country, they’ve all got a ton of vacancies. There’s a major shift in retail taking place. How it sorts out, I don’t think anyone knows.” Part of the flux we’re witnessing, he says, is market correction: “The country is really over-retailed. All the development that’s taken place in the past ten to twenty years, all the retail that was built—there’s too much of it, especially apparel.”

And part of the flux is attributable to e-commerce, which represents not just a change in season, but a change in climate, a melting away of even the sturdiest landmarks. Ralph Lauren, in addition to closing Greenwich last year, also closed its sumptuous flagship on Fifth Avenue, and promptly set about exploring ways to expand its digital business. Around the country, store closings are outpacing store openings despite low unemployment and high consumer confidence.

“This whole retail evolution that we’re going through right now is just taking its toll on the Avenue, along with every other market in the United States,” says Jessica Curtis, senior managing director at Stamford-based real estate broker Newmark Grubb Knight Frank. “It’s the Amazon effect, which we talk about all the time in my business.”

Ron Brien adds: “I looked up a statistic—from 2010 to 2016, Amazon sales in North America increased five times, from $16 billion to $80 billion. Half of all households in the U.S. are Amazon subscribers now. I would say that 60 percent of the reason [for the vacancies] is due to Amazon.”

But another factor is local. After the Avenue rebounded from the Great Recession, rents soared to record highs, “and in many cases, those rents may not have been sustainable,” Curtis says. Of course, brokers and landlords can’t know in advance when mega-trends like the corporate retail slump or the e-commerce boom will come knocking like the reaper on Greenwich Avenue doors. But now that the reaper is here, rents have begun to fall. A little. Do lower rents foreshadow a change in the Avenue’s composition—say, a return to the small businesses that once dominated it?

“What I think’s going to happen is, more landlords are going to be forced to lower the rent, and you’re going to see a resurgence, a kind of déjà vu, of mom-and-pops and local retailers moving onto the Avenue,” Ron Brien says. “So the nationals kicked out all the mom-and-pops—and now I think they are going to get revenge. Landlords will have to lower their rents or stay empty.” If mom-and-pops do return, they won’t look much like those of our parents’ days—the convenience store, the stationer, the fruit stand. Rather, they’ll be hip and creative, offering goods not readily available elsewhere and top-notch service. (Cos Cob’s foodie hub—first-rate cheese, meat, seafood shops—serves as a reminder that the Avenue once boasted such shops.)

Jessica Curtis agrees that we could see more indies on the Avenue, but adds that favorable rents also encourage other trends: shops from the side streets upgrading to Greenwich Avenue; expansion by tenants already on the Avenue; and the arrival of “resort” brands from places like Aspen, Palm Beach and Nantucket.

The vacancies are unsettling, but they are only part of the picture. Greenwich Avenue’s overall complexion remains pink. Original boutiques like Copious Row, Greenwich-y big shots like Vineyard Vines, international players like Tiffany & Co. and Apple, and homegrown superstars like Betteridge, Manfredi, Richards, and Diane’s Books, among others, all are brimming with health.

Alyssa Keleshian Bonomo, who owns several commercial properties downtown, observes that most Greenwich Avenue successes have three things in common: coveted merchandise, great service and an ability to connect with the community. “A lot of stores come to the Avenue, they open their doors, and they expect people to walk in,” she says. “It doesn’t work like that anymore.”

One Avenue sector doing especially well is restaurants. “That’s where people are spending their money—on dining out,” Brien says. Curtis notes that Millennials are contributing amply to this trend. “Young people would rather spend $100 to $150 on dinner than $100 and $150 on a sweater. They’re looking for experiences over the things.”

The one conspicuous blank restaurant space on the Avenue—the former Morello Italian Bistro at 253 Greenwich Avenue, with its spectacular vaulted ceiling—may be filled by the time you read this. Douro is moving there from 363 Greenwich Avenue, a below-street-level space that it has outgrown. “It’s difficult to survive on the Avenue due to high rents,” Maria Correia, Douro’s managing partner, says. “However, it appears that well-run restaurants are the exception. Our number one complaint from our guests is lack of parking.”


SOLUTIONS REQUIRE NEW THINKING

GREENWICH AVENUE’S DOMINANT TREND IS STILL TOWARD THE RAREFIED. The Avenue earned its “Rodeo Drive East” label in the nineties, with the rising fortunes of Wall Street and the hedgies, and more specifically, with the arrival of the bronze-doored Saks Fifth Avenue on the old Woolworth’s site. That change seemed symbolic: We were leaving middle-class Greenwich Avenue behind. Now we have our Herméses and Teslas—though every now and again a more modest newcomer, like Skinny Pizza, happily alights. The mix is a sign of health. Still, as the retail climate evolves in ways that are largely hostile to brick-and-mortar stores, merchants, landlords and other stakeholders stress the role of creative planning in keeping the Avenue robust.

A chief complaint is that Greenwich Avenue is over-regulated. “There are definitely some P&Z challenges that keep tenants out of the market,” Jessica Curtis says. “For example, I know of fitness uses that would like to be on the street, but it’s just not an option because of the parking challenges and zoning regulations.” Further, she says, “there are only so many spaces you can do restaurants in, because of the 400-foot liquor license rule.”

Many consider the distance rule antiquated and would like to see it scrapped (as it has been elsewhere in town). “This would encourage more restaurants to come in that ordinarily couldn’t get on the street,” Heaven says. “Remember, a lot of the buildings physically can’t handle restaurants, so it’s not going to be a Bourbon Street.” Alyssa Keleshian Bonomo adds, “What restaurants do is create engagement. They create community. They create vibrancy.” (She adds further that retailers and restaurants depend on the support of customers to create that vibrancy: In that sense, Greenwich Avenue is a two-way street.)

Easing other regulations could help the Avenue blossom in novel ways. “We need to have more experiences on the Avenue,” Keleshian Bonomo says. “But regulations won’t allow for it. Really, the town needs to understand the changing economy and the changing retail environment, and adapt to zoning regulations to allow for different kinds of uses—not just apparel. Basically, if you want to open an apparel shop, you’re good to go. Anyone else, you’ve got to go through an onerous process.”

As things stand, regulations forbid such first-floor uses as pottery-making schools (now popular among children) and skincare clinics. And if one wants to change the use of a space—say, from a clothing store to a café or a fitness studio—one must apply for a special permit that could eat up a lot of time, money and lost rent to obtain. Or fail to obtain. “That unpredictability is causing a lot of landlords and potential tenants to walk away,” says Paul Pugliese, cofounder of Greenwich Land Co. and a longtime member of the town’s Architectural Review Committee. Even an approval, he says, may come with burdensome restrictions, adding further stress to the process. (Katie DeLuca, the town planner, is sensitive to these issues and has begun soliciting ideas to incorporate in the town’s upcoming Plan of Conservation and Development.)

Parking is the perennial bugbear. While it’s generally agreed that we need more of it close to the Avenue, nobody wants to see more asphalt. Joe Tranfo, who owns several parcels on Benedict Place and Benedict Court, has a possible solution. His proposal is to build a park on the site of the Lewis Street-Benedict Place lot (behind J.Crew and Tiffany & Co.) with ample parking underneath. He would also build a community center fronting the park on Benedict Place. In return, the town would allow him to construct housing and office space on Benedict Place and Benedict Court.

Supporters of the plan say it would add welcome green space and encourage retail employees to stop parking on the Avenue—the cause of much block-circling traffic. Also, some of the housing would be classified as affordable, thus helping the town meet its affordable housing requirement. Critics say the new buildings would be too bulky and would eradicate the charming carriage-house apartments that comprise Benedict Court, the little alleyway behind St. Mary Church. As we write, the plan is far from final; Tranfo seeks collaboration with the town on a version that benefits all. “I’m not the person who wants to force anything down the town’s throat,” says the longtime resident. “I want to be associated with something good.”

Paul Pugliese men tions other inventive solutions he would support—constructing parking in the “bowl” of Havemeyer Field, and then putting the field back on top. A third idea, wilder still, would extend the Avenue’s commercial stretch onto Steamboat Road, alongside the Arch Street parking lot. Some variety of green space would go on the majority of the lot with parking underneath. This would accomplish two important goals: uniting Greenwich Avenue and Steamboat Road—especially desirable with an improved Bruce Museum in the offing—and banishing the dismal “sea of asphalt” that now greets visitors to central Greenwich.

But we are getting ahead of ourselves. For now, Greenwich Avenue is between seasons. Nobody seriously believes it’s in decline. “Traveling around, one is hard-pressed to find a street as great as Greenwich Avenue, despite the for-rent signs in the windows you see now,” Marshall Heaven says. Once the market and rent corrections shake out, he and other experts say, the Avenue will continue to change in ways that are largely pleasing—new leaves, a better garden.

 

 

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