News story made available courtesy of Hudson Valley Business

Developers seek new retailers as Main Street comes back to life

Week of April 2nd, 2007

A sketch of the new Lucky Platt Building.

The revitalization of Poughkeepsie’s Main Street is well under way with the completion of two new mixed-use projects, The Luckey Platt Building and The Hamilton. Interest in the residential portions of these buildings is strong: there’s demand for quality housing downtown. However, attracting retailers and businesses, be they a national company, retailer or small law firm, is more of a hard sell.

Queens-based Alma Realty invested $14 million in the interior renovation of Luckey Platt, a former department store and landmark on the corner of Main and Academy Streets, after buying the building from the city for $1. It has about 45,000 square feet of commercial space on the ground and basement floors and 141 apartments above. Hedgestone Realty Group Inc. is the rental agent for the apartments, which range from $800 for a studio to $1,400 for three bedrooms. The Dagar Group Ltd., a Fishkill-based brokerage with retail and office listings, is marketing the commercial space.

Patricio Solar, architect for Alma Realty, said construction is due to be completed this spring. However, a work stoppage order on the project by the Poughkeepsie Fire Department on March 23 cast doubt on that timetable. The order concerned the developer’s addition of seven residential units without planning board approval, along with an unfinished sprinkler system. Ed Murphy, the city’s director of development, said the planning board conditionally approved the additional units in a subsequent meeting on March 27 and the pipe that was needed for the sprinkler system has been installed, so he expected construction to resume by the first week of April.

CHANGING CITYSCAPE

A couple of blocks farther east along Main, at numbers 417-443, New York City developers Duverney and Brooks and partner, Pennrose Properties, spent $12 million constructing The Hamilton, a two-story building on a former brownfield. There are retail units on the ground floor and 54 apartments on the floor above; some are also located on the rear of the first floor and are accessible for the disabled. The structure, which is anchored on one end by a fanciful tower, resembles a traditional townscape with a series of seven separate facades. “It looks like a collection of smaller buildings,” said Gale Kaufman, managing director for Duverney and Brooks and Pennrose. “A lot of time and cost went into the design.”

The Hamilton’s apartments are subsidized; to qualify, tenants must have an income below certain limits. They were all rented before construction was completed in the spring of 2006 and there is now a waiting list -- not surprising, given Dutchess County’s dearth of affordable housing, Kaufman said. The modest rents, ranging from $500 for a one bedroom to $875 for three bedrooms, were made possible in part by a low-interest loan from the state and also federal tax credits on building costs.

The Dagar Group has also been hired by The Hamilton to rent out its 6,500 square feet of commercial space. For both buildings, “we’ve created fliers that have been sent by mail or e-mail to national retail tenants and the real estate brokerage community at large,” said David Livshin, Dagar Group president and chief executive officer, noting that the firm is also working with the Dutchess County Economic Development to get out the word. “It’s a process where you have to educate people. You have to refocus their thinking and present prospective tenants with the opportunity.”

Livshin said one draw is the captive audience of daytime workers in downtown Poughkeepsie, the county seat, who require banking and other types of services, such as fitness centers and restaurants. Parking is also not an issue, with lots behind both buildings and ample municipal parking lots within a block or two. And finally, the retail rental rates, per square foot, are competitive -- “in the midteens compared to the mid-twenties on Route 9,” Livshin said.

MIXED-USE ENCOURAGED

The city is doing its part by introducing a retail rental subsidy program, Murphy said. The city will match what the renter pays dollar to dollar up to $3 per square foot, enabling owners to charge less. He said the subsidy would be decreased each year until it ceased in the third year. While acknowledging “retail is hard to get going and the biggest challenge,” Murphy said he hoped the large number of rental apartments in The Luckey Platt would help create the critical mass of people living downtown that’s needed for a “round-the-clock economy.”

In an effort to resurrect its long-neglected downtown, the city is encouraging mixed-use development by requiring developers on Main Street to lease their ground-floor space to retailers. After removing the 1970s-era pedestrian mall in 2001, the city made extensive street improvements and ran a façade grant program for five years, qualifying builders who renovated their storefronts for a $7,500 grant. It currently offers low-interest economic development loans up to $50,000 for businesses, Murphy said.

One new business that’s found success on Main Street is the Artist’s Palate restaurant, which moved into the former M. Shwartz department store last April. Steve and Lisa Aaronson bought the 1860s-era abandoned building in 2000, spent almost $1 million in renovations and rented out the eight upstairs lofts, mainly to successful artists from New York and other areas around the country.

Owned by Megan and Charlie Fells, who took out a $50,000 economic development loan to help launch their business, the Artist’s Palate has quickly become a downtown fixture, and business boomed from day one. “All there was downtown were pizzerias, delis and Chinese restaurants. We wanted to give business people another option,” Megan said. With its sleek, contemporary decor, art on the walls, featuring a different artist every few months, reasonable prices and intriguing menu, which changes every two weeks, the Fells knew lunch would be busy.

What’s surprising is the demand for dinners, which are served Monday through Saturday. The secret, especially on the weekends, is the restaurant’s valet parking service. Patrons pull up in their cars, have dinner, go to a show at The Bardavon or Mid-Hudson Civic Center, come back to the restaurant for dessert, and then have their car brought to them, Megan said.

Similarly, Jon Behrends said that addressing safety and convenience were a factor in his success at getting stable, long-term tenants for the renovated apartments in the three buildings he had bought on Main Street 10 years ago. Credited by Murphy as the gutsy pioneer who first got things rolling, Behrends said he advertises his upscale apartments, which started renting at $750 a month and now go for $900, on Craig’s List and apartments.com. “Yes, you can get well-heeled tenants into Poughkeepsie if you provide nice apartments,” Behrends said. “If you build it they will come.”