News
BLOOMBERG: RETAIL IGNITING DEVELOPMENT CITYWIDE
December 6, 2011
| Mayor Mike is a fan of retail for employing 10% of the private workforce, helping New York reclaim two-thirds of the jobs it lost. (He also loves the deals he's getting on holiday gifts.) And he has no problem with retail's cozy relationship with affordable housing. |
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| Yesterday morning at the Hilton, we snapped Mr. Bloomberg at ICSC's annual NY conference. He says the city's population has reached a record high 8.4 million, not to mention the 50 million tourists this year. Holiday tourists, including many ICSC attendees, will reach 6.3 million. (Thank goodness there will be 90,000 hotel rooms by year's end.) Retail sales for Q3, he says, are up 37% from a year ago. All those tourists and their retail spending help pay for the city's services, including affordable housing. Retail is a key component to affordable housing projects, he says, as in the restarted Hunter's Point South development in LIC. |
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| Hizzoner also says development is happening in each borough, such as Prestige Properties' 780k SF mall breaking ground in the Bronx in the spring and the revitalized Downtown Brooklyn, where big names like Shake Shack and Morton's are already open and two more were announced just yesterday: Sugar and Plumm and America's BBQ and Beer will open at Muss Development's 345 Adams St in fall 2012 with 20-year leases. (A lot of meat is gonna be trucked into Brooklyn.) America's BBQ comes from Mark Advent, creator of Vegas' New York New York, which we snapped from our cousin's wedding reception at the MGM Grand last February. This is the first America's BBQ, and Mark plans to take the brand national. |
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| See anyone you know? If the mayor's words weren't enough to convince you something good is going on in retail, perhaps this crowd shot will. Attendance was up by 500 people this year, as was ICSC's membership as a whole—National Realty & Development Corp prez John Orrico told attendees that the association had lost members for 22 months straight but as of August is growing again. Few of the retail jobs lost during the recession have been recovered. Shopping at bricks-and-mortar stores is bringing back numbers, points out ICSC prez & CEO Mike Kercheval: $1M of new retail sales adds 3.6 jobs, while doing that same shopping on Amazon.com only adds 0.88 jobs. |
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| We snapped Mike and John with Kimco prez & CEO Dave Henry(who also happens to be ICSC chairman). The biggest issue ICSC is still fighting is the disparity of sales tax collection, Dave says. Currently, online retailers only have to collect sales tax if the buyer is in the same state as the vendor. “This inequality threatens mom-and-pops,†he points out. A University of Tennessee study says states can lose as much as $23B in uncollected sales tax next year, forcing them to increase income and property taxes. Other challenges: hurting community banks not lending to mom-and-pops and national stores taking fewer square feet. The good news:positive GDP growth, US population growth of 3 million a year, and an overall lack of retail development. 2,200 retailers are expected to open 72,000 new stores over the next 12 months. |
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| Retailers are already having a holly jolly season, we learned at the Women's SIG session. Well, perhaps not as much for CVS's pharmacy sales (regional director of real estate Angella Franklin is on the left with Toys "R" Us SVP David Picot and Prudential Douglas Elliman retail chair Faith Hope Consolo). First, the hot toys this season: LeapPad Explorer, Elmo, Power Wheels, and Nerf Vortex. (Also silk pocket squares are in for the more debonair 6-year- old.) Dave says Toys "R" Us is focusing on adding Babies "R" Us into existing Toys "R" Us stores. And for US expansion, it's looking at existing building space; its average size is usually 45k to 60k SF, but it has taken space as small as 30k SF. |
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| Brooks Brothers Group chief real estate officer Kathy Self (with GameStop SVP Marc Summey) expects as much as a 4.2% jump in holiday sales this year. It's difficult to compete with discounters in a market like this, but she says the key is to be consistent with your quality and prices. GameStop's strategy for keeping on top: investing in new tech (“reality is you'll eventually be able to download video games in secondsâ€) and paying more attention to women consumers, who like products like Wii and Xbox Kinect, dance games, and fitness programs. |
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| Tis the season: There's a jolly old hot dog vendor working at Sixth and 54th. Check back tomorrow for more from ICSC. |
