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The U.S. Census released data on business patterns for 2012. I did a comparison for selected retail, restaurants and recreation in the Rochester metropolitan area.

As for retail, the total number of establishments fell from 3,915 in 2002 to 3,548 in 2012. It’s clear the Internet took a bite out of some brick and mortar places. But other trends are revealed, such as the fact we’re buying fewer flowers.

We’re eating out more, with the total number of establishments climbing from 2,014 to 2,240. There are fewer bars, but the number of liquor stores went up.

Recreation patterns show we’re golfing and bowling less, but working out more.

Have a look:

RETAIL

 

HOTELSRESTAURANTS

 

ENTERTAINMENT

 

Links of the Day:

 

- Parents are ridiculously pushy. Kids can’t take criticism and solve their own problems. Such is the state of youth sports in Rochester.

- A poll of New Yorkers shows deep dissatisfaction with Common Core, as well as trust in teachers.

- I found this New York Times piece on Common Core to be overly positive. It makes it seem as if this child must learn these new, wonderful, challenging standards, or fail at life. There was no questioning of the standards themselves.

- Could a lawsuit challenging teacher tenure be filed in New York?

- Do school dress codes inadvertently treat girls as sex objects?

- There are a lot fewer people playing golf in Monroe County.

- Do we really need to drug test eighth-graders? A girl (after my own heart) protested and got booted from the National Honor Society.

- The story of a dad his autistic son who loves the Phillies will touch your heart.

Rendering of College Town

Rendering of College Town

 

College Town is taking shape. At a groundbreaking ceremony this week, the list of tenants was named:

  • 150 apartments
  • Barnes & Noble
  • Moe’s Southwest Grill,
  • Corner Bakery and Cafe
  • Flight Wine Bar
  • Benucci’s
  • Saxby’s Coffee & Yogurtland
  • Flower City Provisions
  • Hilton Garden Inn & Conference Center

The $100 million project will also have a 1,560-space parking garage.

The project got a $20 million government loan, to paid back with money that would have gone to the city’s property taxes. It also benefits from $17 million in infrastructure improvements and a $4 million state grant.

The project claims it will generate $49 million in sales and income taxes over the next 10 years. That kind of math assumes we weren’t going to go out and spend our money elsewhere in the community. It assumes the 320 workers wouldn’t have found other low-paying retail jobs. Retail is not good economic development.

The number to look it as how much College Town will be paying in property taxes. Its PILOT calls for $4.8 million over the next 10 years. Not enough for the city to recoup its investment over that time period. (At the end of those 10 years, the roads will probably need repaving, too.) Meantime, the city is crying to Albany that it can’t raise enough revenue in property taxes.

I truly believe this project will be wonderful for the University of Rochester and Mt. Hope neighborhood. But given the fact the retail space is already leased out by tenants catering to a well-to-do crowd, it’s hard to believe this project couldn’t have happened on its own without such heavy taxpayer investment.

Links of the Day:

 

- Many students struggled with the new state tests and couldn’t finish.

- A Buffalo suburb gets hip to public transit.

- Just call it “The Wire: Albany Edition.”

- In Gloversville, Sno Cone Joe is charged with stalking Mr. Ding-A-Ling.

- I was a guest on The Wease Show and talked about the other side of the Spider-Man shoot. Listen here.

Dick's

There’s a rumor Dick’s Sporting Goods is coming to Batavia. Already, residents are wary of giving the developer tax breaks for the project. Another sporting goods store owner said it wouldn’t be fair. The Batavian reports:

That isn’t scaring at least two local retailers who sell some of the same merchandise as Dick’s, but the local owners are unhappy that a giant corporation like Dick’s could benefit from any tax incentives given to COR.

Mike Barrett likened the practice of using tax incentives going to corporate chains to “using your own tax money to put yourself out of business.”

The whole thing might be a moot point. The just-passed state budget restricts when industrial development agencies can hand out tax breaks to retail projects.  The Buffalo News reports projects must be tourist destinations, in an economically distressed area or provide services and goods that are not available in the area.

This is a good thing, because retail projects are not good economic development tools. Tax breaks create an unequal playing field. The jobs created are usually low-wage and part time. The sales tax estimates assume people wouldn’t be spending their money elsewhere in the community. It also shouldn’t be assumed that because more stores open, residents suddenly have more money to spend. Finally, unless these projects are in seriously disadvantaged places, many would have happened anyway.

Think of all of the Rochester retail projects that have gotten mega-tax breaks, including Greece Ridge Mall, College Town and Tops. These developments may not have qualified under the state’s new rules. That’s as it should be.

Links of the Day:

- Jim Boeheim’s suits are made by Adrian Jules in Rochester. The clothier puts in orange lining.

- Monroe County schools get a combined $157 million from the state lottery system.

- New York City preservationists are not happy cobblestone streets are being replaced with more bicycle-friendly surfaces.

- Drones could become a part of American life.

- The folding car of the future.

The Boston Wegmans would be built at the property on the left. (Google Street View)

The Boston Wegmans would be built in the property on the left. (Google Street View)

 

Danny Wegman once called opening a store in Boston “terrifying,” but he plans on moving ahead. Boston’s mayor announced Wegmans would be opening a store in Fenway.

Wegmans said the deal is not finalized. No details about the size ad amenities were available. The store will likely replicate the one Wegmans is building in Newton, which will be only 70,000 square feet, the smallest store Wegmans has opened in decades. (The Wegmans prototype is 130,000-140,000 square feet. Calkins Rd. is 110,000. East Ave. will be 90,000.)

Residents are already worried about traffic near Fenway Park. But the news was greeted with joy on Twitter.

Wegmans THE smaller imageWhy do Rochesterians care about this new store? First, Wegmans is one of Rochester’s largest employers. The success of Wegmans is important to the region. Second, the new store will be in a place familiar to Red Sox fans all over the country. Third, the Fenway Wegmans will be a city store, a major shift for a company that has only built in the suburbs the last 30 to 40 years. The Wegmans city prototype should be followed with great interest by Rochester and other urban areas.

We’ll be watching!

Links of the Day:

- Costco is coming to Syracuse. That means it’s only a matter of time before a store opens in the Rochester area.

- The Syracuse University athletic department will get more oversight in determining if players are academically eligible.

- Pity the Buffalo Bills, but don’t call them poor.

 

- Critics say the state budget cares more about the Buffalo Bills than it does cancer prevention and people with developmental disabilities.

- Syracuse got two hospitals to lower the rates for city employees. Rochester should pursue this.

- Nurses are seeking doctor-like authority and could open their own practices.

- The company that makes the Entertainment coupon books is bankrupt.

- Long, juicy read about the Today Show troubles.

Tops logoSo far this year, Monroe County’s economic development agency, COMIDA,  has awarded tax breaks to two Tops Markets stores to aid their moves down the street.

COMIDA approved an incentive package for the Tops in Henrietta to relocate to a different plaza on Jefferson Rd. The move allows Tops to install a gas station. Without the incentive package, COMIDA said Tops would leave Henrietta, taking with it 79 existing jobs and 18 new ones. Tops was awarded sales tax exemptions on $2 million of renovations. The plaza owner was awarded sales tax exemptions on $320,000 of work.

COMIDA also approved tax breaks for Tops in Irondequoit to move to a different plaza on East Ridge Road. As in Henrietta, the move allows Tops to build a gas station. The store threatened to leave Irondequoit, costing 79 jobs and 18 new ones. (Interesting how the two stores employ the exact same number of people.) The plaza owner received sales and mortgage tax exemptions on $10.7 million of work, as well as additional property tax abatements. Tops is getting a sales tax break on $2 million of work.

Let’s be clear about why Tops is moving these stores – gas stations. Fuel brought in $51 million in sales in the third quarter of last year, a jump of 7 percent. Gas is an integral part of the business model for the chain.

We have to ask whether the threat to close the stores was real.

Tops has 153 stores. Its third-quarter profit was $4.7 million on sales of $538 million. It has been adding stores, particularly in smaller, existing supermarket locations. Even if the Henrietta and Irondequoit stores needed gas to survive, it’s doesn’t automatically follow Tops would have left those towns. If Monroe County had told Tops it wouldn’t get a deal in any of the towns, would Tops really have closed stores and abandoned two population centers? Would the county really have lost 158 low-paying service jobs? What would the impact have been if Tops did leave?

(In case you’re wondering, Wegmans also gets incentives. COMIDA most recently approved property tax abatements for a cheese-aging building.)

Sometime we should see what happens when we say, “No.”

Links of the Day:

- Experts don’t know why gas prices are rising in Western New York.

- Schumer wants a bank to stop harassing a couple over their dead son’s college loans.

- A coalition including Rochester Institute of Technology is bidding to make Upstate New York a drone testing site.

- “Wages today constitute the lowest share of both corporate revenue and the nation’s economy since World War Two.”

- The WalMart of weed. This is the future.

- Walking is not a crime. Why do we often blame the victim?

Taxpayers are pouring gobs of money into the University of Rochester’s College Town project, which will consist of a huge number of parking spaces and no transit center.

The Democrat and Chronicle reports taxpayers will shell out $30.7 million of the $100 million project featuring apartments, a hotel and retail. That includes a $20 million federal loan that will be paid back primarily with the development’s property taxes. It also includes infrastructure improvements and a $4 million state grant the project suddenly “needs.”

I’ve long questioned why taxpayers are paying one-third of the cost of College Town. While I believe this will be an incredible addition to the corridor, this is not an economically distressed area. It’s going on prime real estate in a nice neighborhood right next to a rich college. Fifty-percent of the retail space is already leased, meaning there’s already demand for this site. This is not the kind of development that needed such an extensive push from government.

Now that the city is so deep into this project, it should have demanded a transit facility. Plans call for a 1,525-space parking garage. Meanwhile, an $8.3 million transit center with 10 to 12 bus bays was scuttled because it didn’t “fit the developers’ needs,” according to RGRTA’s CEO.

This is a travesty. The U of R is the area’s largest employer and taxpayers are footing the bill to bring ever more cars to the area without any kind of plan to encourage public transit.   We’re paying to install a new exit on Route 390, expand Mt. Hope Ave. and subsidize parking for students and staff at College Town. None of these measures will make traffic flow more smoothly. They’ll just bring more and more cars. The least the city and the college could have done was install some bus bays.

U of R President Joel Seligman called the approval of the $20 million federal loan for the College Town project a “red letter day” for the city because of its economic development potential. The D&C reports:

The economic benefits of College Town, according to its developers, include 985 construction jobs and 582 permanent jobs. College Town is projected to have an annual payroll of $26.4 million, with 275 of those jobs being in retail businesses and 250 being office jobs, some with UR. Annual sales would be an estimated $30.2 million.

The U of R jobs likely would have been created anyway. If you divide the 275 retail jobs by $30.7 million, that’s $111,636 tax dollars per job. It will take a retail worker four years to make up the money. Subsidizing retail jobs is simply bad for taxpayers.

If we’re going to essentially pay developers to build in our city, we should focus on projects that generate immediate property tax revenue, create well-paying jobs and encourage public transit. This one fails on all counts.

Links of the Day:

- The Wall Street Journal reports Antonio Perez clung to inkjet printers in the early days of the company’s bankruptcy.

- Crime-ridden Camden, N.J. is dissolving its police forcein a bid to fight crime.

- Broadcasting car chases live on TV is nothing but “mayhem porn” and has no news value.

Have you always wanted to open your own business, but found rents to be sky-high?

A company that owns 459 retail properties has so much vacant space, it’s offering storefronts for free! Cleveland-based DDR Corp. has a business incubator program called “Set Up Shop.” Participants get the first six months rent free, but the businesses have to sign a two-and-a-half year lease.

DDR, which already runs the program in Georgia and Florida, is bringing Set Up Shop to Western New York. The Buffalo News reports:

The units vary in exact size but are small spaces designed to house retail shops that are just starting up. The program features free rent for the first six months, a cap on other expenses, but the business has to sign a lease for 30 months.

“We’re looking for entrepreneurs. We’re looking for startups,” said David J. Perry, senior director of marketing services for DDR. “it has to fit in with the merchandise mix of the center and be retail. That’s what we’re looking for.”

(snip)

The offer is an effort by DDR to deal with an excess of vacant space in its plazas. The retail market nationally is still struggling in the lackluster economic recovery, with consumers holding back on their spending. The company posted a leased rate of 94 percent in the second quarter, but still has a lot of small spaces available in these centers.

DDR, which bought a number of Benderson properties, owns 4 million square feet of retail space in the Buffalo and Rochester markets.

Panorama Plaza in Penfield, Tops Plaza in LeRoy and Batavia Commons in Batavia have space available for Set Up Shop.

This reminds me a little of the Pop-Up shop idea in Pittsburgh. It’s nice to see creative reuses of empty retail space.

Downtown Rochester’s newest retailer is on Main Street.

Villa opened in July in the former Frederick Douglass Museum and Cultural Center and Salvation Army offices.

Villa is an urban retailer selling both expensive footwear for sneakheads and affordable back-to-school gear. The store is vibrant, hip, beautiful and welcoming.

The store’s arrival is notable because it’s been a long time since a new clothing store opened within the Inner Loop. Midtown Plaza’s closing delivered a body blow to downtown retail.

I did a double take when I walked by. As I browsed the merchandise, a police officer stopped in to marvel at the renovation. The place was hopping with customers.

The first Villa opened as “Sneaker Villa” in Philadelphia in 1989. There are now several dozen sores, including ones in Buffalo and Syracuse. The company has a campaign called “Join the Movement.” Much of the store’s marketing is about urban revitalization and giving back to the community in the form of events and fundraisers.

Opening a store at the Liberty Pole seems like a no-brainer. You’ve got MCC students and thousands of bus riders waiting for transfers. But the MCC students could disappear if the college pulls out of Sibley. The bus riders will also go away once the Mortimer St. transit center opens. Will other development offset the loss of people on Main Street?

Let’s hope so.

We hear threats all the time from businesses wanting tax incentives from government. They threaten to move out of town. They threaten to not spend money on improvements. They threaten to close up shop.

Wilmorite, owner of Greece Ridge Mall, threatened to walk away from a redevelopment project if it didn’t get a PILOT agreement. The $12 million to $14 million project involved tearing down the Bon-Ton and replacing it with nice restaurants. The County of Monroe Industrial Development Agency said Wilmorite needed the PILOT to get bank financing.

Worried the mall would deteriorate, a tentative deal was reached among the town, county and school district.

Was the threat real?

A government official who didn’t want me to use his name said yes. One need only look at Irondequoit Mall, now named Medley Centre. Wilmorite built the mall and when it declined, gave up and sold it. The mall is still awaiting redevelopment. One could say Wilmorite gave up on Sibley, though that’s a bit more complicated.

Judy Seil, head of COMIDA, doesn’t like calling the Greece Ridge incentive plan a “tax break.” She said the mall is reducing its square footage by knocking down the BonTon, so it’s actually not taking advantage of what would likely have been a property tax reduction. I’m skeptical of that explanation, because if this wasn’t a tax break, why would Wilmorite need it in the first place?

Aside from serious questions about whether tax breaks for retail projects are wise, this entire episode begs other questions about malls in general and Greece Ridge in particular. America is discovering it built too many malls. People are shopping more on the Internet. In Rochester, we knocked down Midtown. Medley is almost empty. What’s the long term plan for Greece Ridge? Will restaurants keep it afloat or will it need more taxpayer support in the future?

Communications Bureau, City of Rochester

More Links of the Day:

- How about a Rochester Pop-Up?

The city of Pittsburgh is enjoying success with “pop-up” stores, shops that fill up vacant downtown spaces for a short time rent-fee. If the stores are profitable, they might set up shop permanently. A successful series of pop-ups can create a mini-retail district, reports the Pittsburgh Post-Gazette:

Pop-ups long have been popular in other cities, including New York. In some cases, big-name retailers occupy pop-up locations for no more than a month.

Pittsburgh chose its first 11 pop-ups from among 90 or so applicants. They’ll get free rent for as long as a year, thanks to a $25,000 grant from the city Urban Redevelopment Authority and funds from the Heinz Endowments, Colcom Foundation and an anonymous donor.

The first pop-up surfaced before Christmas. Eight storefronts are occupied now, and three soon-to-come ventures will round out the program.

This is slightly similar to an approach taken by Mt. Morris developer Greg O’Connell, who charges only $5 a square foot in rent.

Rochester’s downtown has plenty of vacant storefronts. It would be cool to see something like this take off, but we’d need willing building owners. It could really “pop.”

- The city can force the Occupy Rochester protesters to leave Washington Square Park, according to a judge’s ruling.

- When charter schools fail, children can get terribly hurt. Are we experimenting on kids in the name of school choice?

- The nation’s big phone companies are trying to take away your right to a landline, writes Rochester’s own David Cay Johnston.

- Rochester has some fine examples of WPA art. Should there be more public art?

After complaining on Facebook I can’t make a decent cup of coffee at home, multiple people suggested I buy a single-cup coffee maker.

After doing some shopping around online, I went to Walmart and bought a higher-end Keurig machine. It was the nicest one the store had in stock.

When I got home, I opened the box. It was packed very tightly, as if it had never been opened before. The machine was in a plastic blag encased in styrofoam. When I got all the wrapping off of it, I noticed the machine was all wet. It was not the really nice model pictured on the box, but a much cheaper “mini” version. To add insult to injury, there was a used K-cup inside!

I immediately went back to the store, livid I was wasting a beautiful Saturday afternoon on a scam perpetrated on Walmart. The customer service counter graciously apologized and replaced the machine. We opened the box before I left.

Walmart was a victim of “return fraud,” which cost retailers $3.5 billion last holiday season. A retailer survey found 3 percent of returns with a receipt are fraudulent. There are several types of return fraud:

  • Returning something already worn, known as “wardrobing”
  • Buying items with stolen or fraudulent cards and returning the merchandise
  • Returning an item bought at one store to a different store
  • Buying merchandise, replacing it with used or defective merchandise and returning the old merchandise (what happened to me)

Obviously, sales clerks must take the extra time to inspect returned merchandise. That didn’t happen in my case, but the packaging was extremely deceptive. Next time I buy a gadget from a store, I’m making sure to look inside the box!