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1.0 Who Is Park Street?
Although residential, cultural, recreational and social uses are interspersed along the length of Park Street, at its core, Park Street is first and foremost a shopping street. In order to understand Park Street's fundamental character as a retail corridor, it is necessary to understand the various markets being served. Ultimately, the success of the area will depend on the ability of the merchants to identify, capture and serve various market segments.
Park Street can be understood from the perspective of its three target markets:
· Primary market: Residents within walking distance use Park Street as their neighborhood retail center; they do their regular grocery shopping on Park Street and purchase other routine items there in the normal course of their daily lives.
· Secondary market: Latino residents throughout Hartford, Greater Hartford and Central Connecticut regularly shop at Park Street stores to purchase specialty items, i.e. ethnic products which are otherwise unavailable in the region.
· Tertiary market: Ideally, non-Latino shoppers - including local and regional residents and tourists - could view Park Street as a destination for purchasing ethnic goods, for dining and for sharing in local Latino culture.
The following section will examine Park Street's strengths and weaknesses in appealing to its core markets.
1.1 Primary Market
There are approximately 14,000 persons living within walking distance (roughly a half mile) of Park Street, with a collective spending power of $63 million per year. This neighborhood is Park Street's primary market - area residents who pass by Park Street on a daily basis and who do their daily shopping there. We identified several key demographic characteristics of the population within walking distance:
· The neighborhood population is primarily Latino. About two thirds of residents within walking distance of Park Street are of Latino origin.
· There are a large number of households at both the high end and the low end of the income spectrum. Roughly one half of the households within walking distance of Park Street earned less than $15,000 in 1989. Overall, the neighborhood had a 1989 per capita income of $7,600. Yet at the same time, one in ten households earned over $50,000 ($65,000 in today's dollars).
· The neighborhood's Latino population is significantly less well-off than the non-Latino population. The 1989 census found that the per capita income of the Latino population within walking distance was $4,600 per year, while the per capita income for non-Latino persons living in the same area was over $13,500.
Interviews with merchants revealed that very little of Park Street's customer spending comes from the higher income, non-Latino neighborhood residents, many of whom live in refurbished brownstones and apartment buildings along Capital Avenue, just a short walk away. Merchants cited two reasons that these neighbors are not also customers of Park Street: (1) that they afraid of crime and have a negative perception of Park Street, and (2), that there is a cultural barrier. As a result, a significant part of Park Street's primary market is not spending its money on Park Street.
At the same time, the lower income shoppers who have supported Park Street's stores in the past are becoming less of a force. The population in the area has dropped considerably over the last five years, and along with it, retail spending has fallen. Many merchants are feeling the bite in their income.
In section 4.1 Economic recommendations, we will discuss how SAMA can increase spending from both of these groups of shoppers.
1.2 Secondary Market
The secondary market begins beyond the borders of the "neighborhood" and is defined by both ethnicity and geography. One of the best known Latino retail strips in New England, Park Street serves as an outlet for demand for ethnic products for both the Greater Hartford area and for cities and towns in Central Connecticut where there is an insufficient critical mass of (particularly Puerto Rican) population to support a discreet, targeted shopping area. Many of these customers will drive as much as 40 minutes to shop for ethnic products that are unavailable in their own communities.
The Hartford Latino Community
There are currently about 50,000 Latino residents in Hartford, representing almost 40% of the total population. These people are mainly of Puerto Rican origin - in fact, in 1989, 87% of Hartford's Latino residents were Puerto Rican.
It is estimated that Hartford's Latino residents collectively spend over $180 million per year on retail goods and services, or about $10,000 for each household annually. (1) This is significantly lower than the overall average for households in the Northeast, which is about $19,000 per year.
The City's Latino population has grown rapidly in recent decades, and continues to expand. Since 1990, the Latino population has grown by 16%, even as the City's total population has fallen 7% in the same period. (2)
These changing demographics come from a combination of factors that have had an impact on Park Street. In a similar fashion to the non-Latino residents of Hartford, Hartford Latinos who have become more affluent and begun to raise families have moved out of the central city and away from Park Street. With the new portability of Section 8 vouchers, low-income families have also had more mobility, and many of these families have also left the central city. With no stable in-migration, housing units became abandoned and the population of residential neighborhoods around Park Street declined. Many merchants feel that the exodus has reached its low point, but the damage that has been done to neighborhood businesses is significant.
The Regional Latino Community
Park Street is also a destination for 110,000 Latino persons in nearby communities. According to merchants that were interviewed by HR&A, these customers live in small cities such as Springfield, Waterbury, Willimantic, New Britain, Meriden, and East Hartford, each of which alone lack the Latino population density to support the Latino retail establishments that exist on Park Street. Because they are not able to find Latino goods or services they need near their homes, Latino residents all over the region drive to Park Street to buy special goods such as imported tropical foods and Latin music, to eat at Caribbean style restaurants, and to use Spanish language services such as a Latin travel agency or a Spanish-speaking driving school. While these customers do not do their everyday shopping on Park Street, many of them make special trips to shop on Park Street as often as once per week. These customers comprise an important secondary market for Park Street.
In total, there are 110,000 Latinos living within a 25-mile radius of Hartford, having an additional $425 million in spending power. (3) There is a great deal of diversity within this market segment. Income, for instance, varies widely. While the per capita income of Connecticut's Latino households is about $12,000 per year, in 1999 dollars, there is a significant group of households that earns over $50,000 per year. In 1989, there were over 11,000 Latino households in Connecticut that earned over $50,000, or one in five of the Latino households in the state. Over half of the Latino households in the state earned over $25,000 in 1989. (4) In other words, most of the Latino families in Connecticut are middle income, with a great deal of disposable income to spend.
1.3 Tertiary Market
The tertiary market is comprised of several segments: non-Latino local and regional residents (including Downtown workers), and tourists.
Non-Latino Residents of Greater Hartford
For purposes of this analysis, we looked at a 10-mile radius around Park Street, the population within a 15-minute drive.
With 560,000 residents (480,000 non-Latino), an aggregate annual income of $19 billion and spending power of $4.6 billion annually, this group has formidable spending power for Park Street to tap in to Greater Hartford, which extends beyond as far as 30 miles from the city center in some directions, has a population of 1,140,000, and about $9 billion in spending power. (4)
Office workers are a key part of this market segment, because these potential customers travel to the State Captiol Area or Downtown Hartford five times a week. A 1998 survey of Downtown employees (6) found some relevant facts about their shopping habits:
· Downtown employees tend to stay in their places of work for lunch. The survey estimated that employees eat lunch away from work an estimated 1.6 days per week. However, almost half of Downtown workers eat lunch away from work twice a week or more.
· Downtown workers are willing to drive during lunch. About half of Downtown workers reported that they sometimes drive to lunch. This reflects the fact that many of the survey respondents worked outside of the central business district, such as at the hospitals, at the Courant, in the state office buildings, or for the insurance companies outside of Downtown proper. Clearly, workers within walking distance of Park Street who would be unconcerned about loosing their parking spaces, represent the greatest opportunity.
· Most Downtown workers occasionally attend cultural events in Downtown Hartford. The survey found that the average Downtown employee attended three cultural events in the previous year. Thirty-one percent attended four or more cultural events, which indicates that there is a large group of employees willing to stay Downtown for evening events, or return to Downtown for weekend events.
Tourists present a significant opportunity for Park Street. The average visitor to Greater Hartford spends $405 per trip, mainly on admissions to tourist attractions, gifts, and dining. People visiting Hartford have an average age of 49 and tend to be college educated (81% have at least some college). About 69% travel without children, which indicates that many of these tourists are empty nesters. Not surprisingly, most already live in the region. About half (49%) are Connecticut residents, while another 17% come from other Northeastern states. (6)
The Greater Hartford Tourism District targets two groups. Primarily, it is after mid- to upper-income 35- to 54-year old persons, who are college educated, rich with cash but short on time. They are looking for short getaways and cultural heritage experiences, and travel to Hartford to visit attractions such as the Mark Twain House, the Webster House, and the Wadsworth Atheneum. Secondarily the District has targeted 55- to 80-year old vacationers who are looking for the same experiences.
The Greater Hartford Tourism District was unable to provide an estimate of how many tourists visit the Hartford area each year. However, the Connecticut Tourism Bureau estimates that tourists spent $4.9 billion in Connecticut in 1997.
The data on tourism and the spending power of the region shows that there is a large potential market of non-Latinos that is eager for places to spend money. Later, we will discuss how Park Street may decide to market itself to these segments.
In order to benefit all of Park Street's retailers, any strategy will have to be multi-faceted. Different stores capture different segments of Park Street's primary, secondary, and tertiary markets. For instance, our informal survey of merchants on Park Street revealed that a bodega is dependent on convenience shoppers who live in the neighborhood, while most of a jewelry store's customers live in the suburbs and make special trips to shop on Park Street. The table on the following page gives a conceptual illustration of the market segments captured by different prototypical types of retailers. This information is anecdotal, and is based on individual and group discussions with merchants who were available to be interviewed.
From our discussions, it appears that some businesses are highly dependent on neighborhood residents for business, while stores selling higher end retail goods and Spanish-language services capture customers from a wider market area.
The above chart shows how much Park Street's customer base can vary from store to store. The following are examples of stores that might be described by each of these four categories:
· Food Market: Small bodega or larger grocery store, serving mainly neighborhood residents but also attracting shoppers from outside the neighborhood for its selection of tropical foods.
· Small Retailer: One of Park Street's small jewelry or Latin music stores, whose customers include a mix of local residents and shoppers from as far away as Willimantic.
· Large Retailer: A larger store specializing in more expensive goods such as furniture or home furnishings, which shoppers are willing to drive a longer distance for.
· Service: A store which provides a service, e.g. a travel agency, driving school, optometrist, etc. Customers are willing to drive a long distance for Spanish-language services that are not available in the suburbs.
Real Estate Market
HR&A was unable to obtain comprehensive survey data on the Park Street real estate market. Based on our conversations with SAMA and Park Street merchants, we estimate market rents for quality retail space on Park Street to be in the $12 to $15 per square foot range. However, rents vary significantly with the size of the space, the quality of the building, location, and other factors. Some merchants are actually paying as little as $8 to $10 per square foot.
These rent levels are roughly the same as those reported five years ago in Park Street Revitalization Program. According to that report, prevailing rents were in the $10 to $14 per square foot range in 1995.