Class Act: Projects like Teachers Village can draw otherwise wary retailers to urban areas

September 30, 2013

Harlem retailers have ‘the most relevant experience to succeed here,’ says Ron Beit, who recruited them to come to his Teachers Village project. – (AARON HOUSTON)

Developer Ron Beit knew Teachers Village — Newark’s most high-profile entry into the recent trend of large-scale urban mixed-use redevelopment — would need plenty of local merchants to be vibrant when its retail space opens next year.

But he knew from experience that he would have to make an aggressive push to recruit retailers from outside the Brick City to a complex that will have 70,000 square feet of retail supporting more than 200 apartments and three charter schools.

Beit, managing member of RBH Group, a New York-based firm that’s leading the project, didn’t need to look far. He first turned to retailers from Harlem, N.Y., largely because they understand the impact of large-scale urban redevelopment, he said.

“We really hit Newark, which was natural,” he said. “And we really hit Harlem hard, because we felt that they had the most relevant experience to succeed here.”

It wasn’t a tough sell.

Teachers Village is just the latest urban setting in New Jersey that is bringing out-of-state retailers to the state.

Dinosaur Bar-B-Que, based in Syracuse, N.Y., quickly became a popular spot in Newark after opening last year outside the Prudential Center, where developers have rehabilitated several properties along Market Street. Five months later, Brother Jimmy’s BBQ brought its Southern-style brand from Manhattan to the Gateway transit village in New Brunswick.

Experts say planting a flag in a city can be daunting for an out-of-state vendor, especially compared to proven markets such as Bergen County. But developing urban areas have much to offer, from infrastructure to visibility.

“New development always has an appeal to incoming retailers, because it has that panache of life,” said Ron DeLuca, a retail broker with Old Bridge-based R.J. Brunelli & Co. “They know it’s going to look good. They know it’s going to be designed efficiently for consumer traffic.”

DeLuca, a senior vice president with the firm, said new retailers will look for unique urban environments because “they want to appeal to a 25-to-40 crowd — the upwardly mobile professionals” with disposable income and small families. That was the case with BurgerFi, a North Palm Beach, Fla.-based chain represented by DeLuca’s firm that is now opening its first New Jersey location in downtown New Brunswick, at 385 George St.

DeLuca said BurgerFi “first focused on New Brunswick” because of the presence of Rutgers University. But the daytime population from the Hub City’s offices and hospitals added to the appeal, he said.

Cost also is a factor in deciding which types of retailers enter the market. Jason Pierson, a retail broker based in the Morganville section of Marlboro, said that means urban sites are less likely to draw national chains that stick to the comforts of suburbia.

“A lot of the downtown markets are more expensive, and it just doesn’t justify the sales volume numbers that you can do there,” said Pierson, president of Pierson Commercial Real Estate. “So you’re finding more regionals that are embedded in the community, that know the market extremely well.”

Brother Jimmy’s and Dinosaur Bar-B-Que are evidence of that, he said, as both only had to cross state lines to enter the market. Both also benefit from being “destination-based businesses” that draw from beyond the city limits; for instance, Dinosaur Bar-B-Que will attract patrons from as far as Springfield and Millburn, he said.

For Teachers Village, Beit said bringing in New York retailers was part of a plan to reactivate a blighted section of downtown Newark, just as some of those merchants have done in Harlem. His team purposely “didn’t want to start with the host of characters that you can find in the malls,” though he didn’t rule it out for the future.

“We really wanted to create something unique,” Beit said. “Obviously, the idea is to attract them later on and to get some of those choice tenants. But we really wanted to create a destination, almost like Brooklyn was, like Harlem was.”