Barnes and Noble, and Mom and Pop
The managers of Yale's commercial real estate holdings hope to create a neighborhood where national chain stores and distinctive local institutions can coexist to the benefit of both.

February 1999
by Mark Alden Branch

John Isaacs sees a lot of traffic in his shoe store every fall just before Casino Night, the annual Monte Carlo-style party thrown by Ezra Stiles and Morse Colleges. Students file in and out of his store, Barrie Ltd., on the corner of Elm and York Streets, in numbers he rarely sees during the rest of the year. But most of them leave with the same shoes they came in with: The undergraduates are simply taking advantage of Barrie's free shoe-polishing service in order to spruce themselves up for the formal affair. "Some of them aren't even wearing our shoes, but I don't care," says Isaacs. "We get the students into the store this way, and they understand the place a little better. That's just being part of the community."

As retailing becomes increasingly the province of suburban "big box" chains with dizzying selections but shrinking service, few Americans still shop at stores where the people behind the counter will polish your shoes, remember how you like your cheeseburger, or identify a pop song based on your vague attempt to warble a few bars. But on a largely pedestrian urban campus like Yale's, the service-oriented mom-and-pop business still survives, largely because of business from Yale students, faculty, and staff. Besides John Isaacs, whose grandfather started Barrie Ltd. in 1934, Broadway has been the livelihood of two generations of the Muller family (Merwin's Art Shop), three generations of Cutlers (Cutler's Compact Discs), three generations of Beckwiths (the Yankee Doodle), and four generations of Brauses (the Quality Wine Shop).

Now, as Yale prepares for a new phase of improvements to the Broadway district (the University owns 23 of the 37 storefronts in the area, which stretches from the corner of Elm and York to the Yale Bookstore), the University's real estate managers are looking to businesses like these as the area's future. In what some observers say is a departure from an earlier vision of Broadway as a row of upscale chain stores, University Properties director of operations Joe Fahey '97MPPM now talks about "being what we are" and trying to lure "a handful of exceptional national tenants" along with local and regional businesses.

"We're not trying to change Broadway's identity, but to make sure Broadway does well," says Fahey. "It's not going to be jammed with The Gap and Starbucks," he adds, invoking the names of the ubiquitous chains most frequently cited as evidence of the homogenization of cities.

This strategy is consistent with a growing belief among people in the business of revitalizing cities that costly attempts to remake downtowns are rarely as effective as grassroots efforts to nurture a city's own quiet strengths. Indeed, this "backward-looking" philosophy parallels some of the latest in planning theory, known broadly as the "new urbanism." According to this school of thought, the most successful communities are based on the cultivation of small-scale neighborhoods with services within walking distance of their customers. To the credit of both Yale and New Haven, the new urbanistic philosophy emerged from the experiences of two School of Architecture graduates, Andres Duany and Elizabeth Plater-Zyberk (both '74MArch), who realized that New Haven's neglected fabric of multi-family houses and narrow streets provided a better model for the future than the wholesale demolition favored by the "urban renewal" advocates of the 1950s and 1960s.

Only last year, author Roberta Brandes Gratz, in her book Cities: Back from the Edge, touted the potential of cities that have exploited farmer's markets, local history, and other home-grown activities ("downtowns reborn") and dismissed those that have put hundreds of millions of dollars into stadiums and shopping malls ("downtowns rebuilt").

Having seen its share of disastrous rebuilding over the past 40 years, New Haven seems to be leaning toward the former course: In announcing a package of initiatives to aid small businesses downtown last November, Mayor John DeStefano Jr. told reporters that if New Haven is to prosper, "We've got to do it as Louis' Lunch, not The Gap." (On the other hand, the city is hedging its bets by supporting a $431-million shopping mall at Long Wharf-an addition to the city some downtown retailers fear may compromise the efforts to nurture downtown.)

To hear such talk from Yale and the city is gratifying to Joel Schiavone '58, the flamboyant, banjo-playing developer who revitalized the College and Chapel Street area in the 1980s by just such a strategy of enhancing existing strengths. "I did Chapel Street as a template for the rest of downtown," says Schiavone. "I signed an awful lot of leases for four dollars a square foot just to fill the space. And we kept everyone who wanted to stay and helped them fix up their stores."

Chapel Street's restored facades, boutiques, and sidewalk tables are one of New Haven's few urban renewal success stories, but they have turned out to be a sacrifice for Schiavone himself. Financially overextended, he lost the properties to the FDIC in 1992. His wife Craig Sleeper Schiavone continues to manage the district, an arrangement that is expected to continue when Yale acquires ten of the properties from the FDIC for $5 million in a complicated deal that is still being put together.

Having recognized the importance of downtown New Haven to its own future, the University has begun to play a larger role in the New Haven real estate market. Yale has bought a number of residential and commercial properties, particularly in the last decade, and its holdings now include some 500 housing units owned either wholly or in partnerships; 152,000 square feet of retail space, most of it in the Broadway area; and 36,500 square feet of office space, including the Whitney Grove Square office building, which was purchased in 1997.

Where once the idea of Yale taking over New Haven real estate was treated with suspicion in the city, the recent transactions have mostly been welcomed, largely in hopes that they will insure that properties like Schiavone's remain intact and well run. Loss of property tax revenue is not an issue in most of these cases, as Yale claims tax-exemption only for property that is used for educational purposes.

Yale's reputation as a landlord has also improved, in part because of the creation in 1996 of University Properties, an arm of the Office of New Haven Affairs, which oversees all of Yale's non-academic holdings in New Haven. "The idea behind University Properties was to consolidate the holdings-which previously had been divided among several offices-and be more responsive," says director of asset management Jonathan Daigle. The office has spent $4.5 million to improve its residential holdings, which include houses on Mansfield Street and apartment buildings in the Park-Howe-Dwight neighborhood behind Pierson College. According to director Joseph Fahey, "we've turned the properties around from losing money to earning a fair return."

But Fahey and Daigle say that while they hope to make some money for the University from the properties, their eyes are not fixed only on the bottom line. "We often make decisions for reasons that aren't economic," says Daigle. "We can't severely discount rents because that would hurt other New Haven landlords. But while we charge more or less market rents, we also may spend millions improving the infrastructure."

The Broadway area got just such treatment in a major streetscape renovation that was completed in 1995. The University contributed $1.9 million to a $7.5-million effort to install new lighting and street furniture, lay brick sidewalks, reroute traffic, and bury utility lines. Elliot Brause of Quality Wine was glad to see the work done, even though the construction had an adverse effect on business for a year and a half. "Broadway had begun to look shabby," says Brause. "And that matters when you take a kid and his parents here and say, 'This is where you're going to spend your free time when you're at Yale.'"

But while the infrastructure improvements have been met with praise from all quarters, some observers question Yale's success at attracting new tenants. James Kurko, University Properties' former manager of commercial properties, gave many merchants and students the impression that he wanted to turn Broadway into what Harvard Square in Cambridge has become: an upscale shopping area dominated by pricey national chains. During his tenure, the Yale Daily News repeatedly reported that University Properties was on the verge of landing the clothing retailer Eddie Bauer as a tenant, but the deal never went through. Kurko left in January 1998. "He had delusions of grandeur," says Joann Miller, who helps her mother, Lilian LoPresti, run Phil's Hair Styles.

Joe Fahey says that to use Harvard Square as a model is not appropriate, since Broadway does not have a market like Cambridge from which to draw. "But the pedestrian life in Harvard Square is something every retail district wants to have," he adds.

While Eddie Bauer may never grace Broadway, Yale has lured one familiar name in retailing to Broadway. In a controversial move two years ago, the University ended its relationship with the 113-year-old Yale Co-op and leased its space to Barnes & Noble College Bookstores, which opened in November 1997 as the Yale Bookstore after a $1.5-million renovation. University officials said the decision was made only after trying to encourage the Co-op to expand its hours into the evening, something Yale regards as crucial to keep the Broadway area lively and safe. The Yale Bookstore, which is open until 9 p.m. on weeknights and 10 p.m. on weekends, is intended to be the catalyst for future revitalization efforts on Broadway, but merchants have yet to see the effects in increased customer traffic. "It's a beautiful store, but I'm not sure it's made a difference at all," says Phil Cutler of Cutler's Compact Discs, another longtime resident of the block.

But Bruce Alexander '65, the veteran developer whom President Levin tapped last year to become vice president for New Haven and state affairs, says that the Bookstore's value is to some degree intangible. "The Bookstore has proven to be a very powerful anchor in conversations with potential tenants," he explains. "It's an important part of their thinking."

Alexander's appointment last year set the stage for the latest effort in Broadway's evolution: the demolition of four mid-block buildings to make way for new, more attractive retail space. Although plans are not yet complete, Alexander and University Properties are working with New Haven architect Kenneth Boroson on at least two options: a new building with street-facing shops, or an arcade that would connect Broadway with the passage that leads from York Street to Payne Whitney Gymnasium. In either case, the new construction would include two large retail locations and room for several smaller stores. The University hopes to begin work on the project this spring.

While this plan involves displacing three active businesses (Quality Wine, Cutler's, and Broadway Pizza), University Properties has offered them space in other Broadway locations. None of the merchants looks forward to moving, but most feel positive about the changes. "We're losing 75 square feet," says Elliot Brause of Quality Wine, "but when you plan a new store, you can use it more efficiently. We'll be able to show a good selection."

"Do I want to move? Definitely not," says Phil Cutler. "But these buildings are in bad shape. I'm as happy as I could be under the circumstances."

One Yale tenant who is not happy with the plan is Joann Miller of Phil's Hair Styles. Phil's building is not among those to be torn down, but the reshuffling calls for moving Quality Wine into Phil's space when the demolition begins and moving Phil's to the second floor. University Properties has long maintained that to make the area more vibrant, the first-floor storefronts should be reserved for stores that sell goods and food, preferably into the evening hours. Service businesses like barber shops, they say, should be on the second floor.

But Miller says the move will hurt business. "When you walk by and think about getting a haircut," she says, "you want to look inside and see how long a wait you'll have. You're more inclined to look in a window than climb upstairs." Miller says she understands Yale's desire to have more active streets at night, but thinks the block could withstand a couple of service businesses with daytime hours. (Another barber shop, Y Haircutting on York Street, is expected to move upstairs at some unspecified future date.) "These two spots are not going to make or break this plan," she says.

What will make or break the plan is finding the right tenants to fill the newly created retail space. But to do that, Yale must first decide what customers it hopes to attract. Joe Fahey describes the people who currently visit Broadway in terms of groups, in descending order of frequency: Yale students, faculty, and staff; New Haven residents; downtown office workers; tourists; and suburbanites who do not work downtown. That last group, whose members are rarely seen on Broadway, is highly prized for its disposable income, and the quest to bring suburban shoppers downtown has been pursued with more zeal than success for years. Some Broadway shops say they do attract loyal customers from the suburbs, including Cutler's and Barrie Ltd. "We've been here so long that as people have moved away to the suburbs, men who grew up in the area on Barrie shoes will still come here," says John Isaacs. Isaacs and Cutler also do extensive mail-order business to out-of-town customers.

But Mike Iannuzzi, who owns Tyco Printing and Copying and is on the board of the Broadway merchants' group, thinks downtown is a tougher sell to suburbanites than it used to be. "It's difficult to pull people into the area because the suburbs now have everything you need," says Iannuzzi. "People used to come in to the Co-op, when it was the largest bookstore between New York and Boston, but now you have Barnes & Noble and Borders out in the suburbs."

People who live outside New Haven are also put off by perceived problems with safety and parking in the area-both of which, according to merchants and Yale officials, are myths. "We had a parking study commissioned, and it found Broadway is in fact pretty good," says Fahey. "The central lot is seldom full." What the area does need, he says, is better signage to help people figure out more easily where and how to park.

As for safety, merchants say the problem is the area's many panhandlers, who are seldom if ever dangerous but who make shoppers feel uneasy. Fahey thinks the problem isn't the number of panhandlers but "the ratio of panhandlers to non-panhandlers." Increasing the density of pedestrian activity in the area, he says, is part of the solution.

Barry Cobden, who owns the Boola Boola Shop, Cobden's General Store, and Campus Clothing Company, is one of the few Broadway retailers to mention the neighborhood beyond Payne Whitney Gymnasium as part of his customer base. "We try to be as much a community-based store as a Yale store," he says. "We have an inner-city neighborhood a block away that is a significant part of our business." Cobden thinks efforts to bring in suburban shoppers are misguided. "To neglect the true customer base that surrounds you-to ignore eight people in order to attract two-is not good retailing."

Last September, Yale took hits from students and other patrons of the Daily Caffe on Elm Street when it evicted the popular coffeehouse after seven years. The store owed Yale $30,000 in back rent, but the Daily's defenders accused Yale of driving out the cafe because the administration didn't like the bohemian mix of artists, students, and skateboarders who patronized the store. The Daily, New Haven's first West Coast-style coffeehouse, was soon joined by a host of competitors, some of whom lease space from Yale. But Jonathan Daigle says Yale wanted the Daily to succeed, and allowed the cafe to stay without a lease and without paying rent for 13 months. "We bent over backward to help them," he says.

While the Yale community continues to be Broadway's bread and butter, University Properties is looking for stores that can weather the quiet New Haven summers, when many merchants consider themselves lucky to break even. "We've never made money in the summer," says Elliot Brause. "Anyone who tells you he does-except maybe Phil Cutler-is lying."

In its quest for businesses less dependent on students, Fahey and Daigle are encouraged by early reports from one of Broadway's newest additions, a national cosmetics chain and Estee Lauder division called Origins. "Origins is one of those tenants designed to strengthen the merchant mix by bringing in both Yale shoppers and other parts of the community, including those from the suburbs," says Alexander. Since it opened near the corner of Broadway and York last summer, the store has reported good business, half of it from non-Yale customers.

Origins is also the second chain store -- after Barnes & Noble -- to come to Broadway under University Properties management. While no one involved with Broadway proposes to ban chains outright, there is some disagreement on the extent to which they should be welcomed. Joel Schiavone sees chain stores as a suburban strength with which the city should not try to compete. "Mall stores are not appropriate except in modest quantities," he says, "or the whole town loses its character. On Chapel Street, we said no chain stores, and we've adhered to that. Starbucks has been to us 15 times, and we've told them 15 times we don't want them."

But John Isaacs thinks national chains can help enhance the district. "We need to have the right nationals that will be familiar to the new students that come in every year," he says. "Then they can discover the independents once they're shopping here."

Ironically, Broadway has not benefitted as much as it might from the presence of its biggest national chain-Barnes & Noble-because the store has played down its national affiliation by calling itself the Yale Bookstore. Now merchants are calling for the store to identify more strongly with its parent company. "We get people coming in here all the time asking where the Barnes & Noble is," says Elliot Brause.

Huey Edwards, the Bookstore's community relations director, says they have begun to emphasize the Barnes & Noble name more in their advertising. "We want to let the community know we're open to everyone, and attack the notion that we're just Yale," Edwards explains.

But despite the magic of familiar names, Fahey and Daigle say they are not looking only to chains to enliven the area. "Broadway's been successful at nurturing small businesses," says Fahey. "Trailblazer [a new independent sporting goods store near Tyco] is one of the best retailers in town." The University Properties staff is talking to at least two local entrepreneurs about new ventures on Broadway. "When we see people who have good ideas and good businesses in the area, we approach them," says Fahey.

As the new construction on Broadway begins -- perhaps as early as this spring -- Yale planners will be also be turning their attention to its soon-to-be-acquired Chapel Street properties. "Our objective in buying [the Chapel Street group] is not to change it, but to protect it from being auctioned off piecemeal," says Alexander. "We want to keep the district as it is: a major asset to New Haven and the University." Yale will spend several million dollars on repairs and renovations to the buildings, which have suffered from neglect during their seven years in receivership. But the improvements will be mostly behind the scenes: Yale's planners now argue that the city's patina of age and history is its secret weapon in the battle to fill its sidewalks.

Phil Cutler agrees. While he looks forward to the new racks and fixtures he'll have in his new store, he doesn't intend to go too far. "I don't want a sterile environment like Record Town," he says. "You need a little real life in there."

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