1.0 Who Is Park Street?
Although residential, cultural, recreational and social uses are interspersedalong the length of Park Street, at its core, Park Street is first and foremosta shopping street. In order to understand Park Street's fundamental character asa retail corridor, it is necessary to understand the various markets beingserved. Ultimately, the success of the area will depend on the ability of themerchants to identify, capture and serve various market segments.
Park Street can be understood from the perspective of its three targetmarkets:
· Primary market: Residents within walking distance use Park Street as theirneighborhood retail center; they do their regular grocery shopping on ParkStreet and purchase other routine items there in the normal course of theirdaily lives.
· Secondary market: Latino residents throughout Hartford, Greater Hartfordand Central Connecticut regularly shop at Park Street stores to purchasespecialty items, i.e. ethnic products which are otherwise unavailable in theregion.
· Tertiary market: Ideally, non-Latino shoppers - including local andregional residents and tourists - could view Park Street as a destination forpurchasing ethnic goods, for dining and for sharing in local Latino culture.
The following section will examine Park Street's strengths and weaknesses inappealing 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 $63million per year. This neighborhood is Park Street's primary market - arearesidents who pass by Park Street on a daily basis and who do their dailyshopping there. We identified several key demographic characteristics of thepopulation within walking distance:
· The neighborhood population is primarily Latino. About two thirds ofresidents within walking distance of Park Street are of Latino origin.
· There are a large number of households at both the high end and the lowend of the income spectrum. Roughly one half of the households within walkingdistance of Park Street earned less than $15,000 in 1989. Overall, theneighborhood had a 1989 per capita income of $7,600. Yet at the same time, onein ten households earned over $50,000 ($65,000 in today's dollars).
· The neighborhood's Latino population is significantly less well-off thanthe non-Latino population. The 1989 census found that the per capita income ofthe Latino population within walking distance was $4,600 per year, while the percapita 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 customerspending comes from the higher income, non-Latino neighborhood residents, manyof whom live in refurbished brownstones and apartment buildings along CapitalAvenue, just a short walk away. Merchants cited two reasons that these neighborsare not also customers of Park Street: (1) that they afraid of crime and have anegative 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 spendingits money on Park Street.
At the same time, the lower income shoppers who have supported Park Street'sstores in the past are becoming less of a force. The population in the area hasdropped considerably over the last five years, and along with it, retailspending has fallen. Many merchants are feeling the bite in their income.
In section 4.1 Economic recommendations, we will discuss how SAMA canincrease 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 ofthe best known Latino retail strips in New England, Park Street serves as anoutlet for demand for ethnic products for both the Greater Hartford area and forcities and towns in Central Connecticut where there is an insufficient criticalmass of (particularly Puerto Rican) population to support a discreet, targetedshopping area. Many of these customers will drive as much as 40 minutes to shopfor ethnic products that are unavailable in their own communities.
The Hartford Latino Community
There are currently about 50,000 Latino residents in Hartford, representingalmost 40% of the total population. These people are mainly of Puerto Ricanorigin - in fact, in 1989, 87% of Hartford's Latino residents were Puerto Rican.
It is estimated that Hartford's Latino residents collectively spend over $180million per year on retail goods and services, or about $10,000 for eachhousehold annually. (1) This is significantly lower than the overall average forhouseholds in the Northeast, which is about $19,000 per year.
The City's Latino population has grown rapidly in recent decades, andcontinues to expand. Since 1990, the Latino population has grown by 16%, even asthe City's total population has fallen 7% in the same period. (2)
These changing demographics come from a combination of factors that have hadan impact on Park Street. In a similar fashion to the non-Latino residents ofHartford, Hartford Latinos who have become more affluent and begun to raisefamilies have moved out of the central city and away from Park Street. With thenew portability of Section 8 vouchers, low-income families have also had moremobility, and many of these families have also left the central city. With nostable in-migration, housing units became abandoned and the population ofresidential neighborhoods around Park Street declined. Many merchants feel thatthe exodus has reached its low point, but the damage that has been done toneighborhood businesses is significant.
The Regional Latino Community
Park Street is also a destination for 110,000 Latino persons in nearbycommunities. According to merchants that were interviewed by HR&A, thesecustomers live in small cities such as Springfield, Waterbury, Willimantic, NewBritain, Meriden, and East Hartford, each of which alone lack the Latinopopulation density to support the Latino retail establishments that exist onPark Street. Because they are not able to find Latino goods or services theyneed near their homes, Latino residents all over the region drive to Park Streetto buy special goods such as imported tropical foods and Latin music, to eat atCaribbean style restaurants, and to use Spanish language services such as aLatin travel agency or a Spanish-speaking driving school. While these customersdo not do their everyday shopping on Park Street, many of them make specialtrips to shop on Park Street as often as once per week. These customers comprisean important secondary market for Park Street.
In total, there are 110,000 Latinos living within a 25-mile radius ofHartford, having an additional $425 million in spending power. (3) There is agreat deal of diversity within this market segment. Income, for instance, varieswidely. 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 householdsthat earns over $50,000 per year. In 1989, there were over 11,000 Latinohouseholds in Connecticut that earned over $50,000, or one in five of the Latinohouseholds in the state. Over half of the Latino households in the state earnedover $25,000 in 1989. (4) In other words, most of the Latino families inConnecticut 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 andregional 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 ParkStreet, 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 hasformidable spending power for Park Street to tap in to Greater Hartford, whichextends beyond as far as 30 miles from the city center in some directions, has apopulation of 1,140,000, and about $9 billion in spending power. (4)
Office workers are a key part of this market segment, because these potentialcustomers travel to the State Captiol Area or Downtown Hartford five times aweek. A 1998 survey of Downtown employees (6) found some relevant facts abouttheir shopping habits:
· Downtown employees tend to stay in their places of work for lunch. Thesurvey estimated that employees eat lunch away from work an estimated 1.6 daysper week. However, almost half of Downtown workers eat lunch away from worktwice a week or more.
· Downtown workers are willing to drive during lunch. About half of Downtownworkers reported that they sometimes drive to lunch. This reflects the fact thatmany 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 forthe insurance companies outside of Downtown proper. Clearly, workers withinwalking distance of Park Street who would be unconcerned about loosing theirparking spaces, represent the greatest opportunity.
· Most Downtown workers occasionally attend cultural events in DowntownHartford. The survey found that the average Downtown employee attended threecultural events in the previous year. Thirty-one percent attended four or morecultural events, which indicates that there is a large group of employeeswilling to stay Downtown for evening events, or return to Downtown for weekendevents.
Tourists present a significant opportunity for Park Street. The averagevisitor to Greater Hartford spends $405 per trip, mainly on admissions totourist attractions, gifts, and dining. People visiting Hartford have an averageage 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 touristsare empty nesters. Not surprisingly, most already live in the region. About half(49%) are Connecticut residents, while another 17% come from other Northeasternstates. (6)
The Greater Hartford Tourism District targets two groups. Primarily, it isafter 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 andcultural heritage experiences, and travel to Hartford to visit attractions suchas the Mark Twain House, the Webster House, and the Wadsworth Atheneum.Secondarily the District has targeted 55- to 80-year old vacationers who arelooking for the same experiences.
The Greater Hartford Tourism District was unable to provide an estimate ofhow many tourists visit the Hartford area each year. However, the ConnecticutTourism Bureau estimates that tourists spent $4.9 billion in Connecticut in1997.
The data on tourism and the spending power of the region shows that there isa 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 thesesegments.
In order to benefit all of Park Street's retailers, any strategy will have tobe multi-faceted. Different stores capture different segments of Park Street'sprimary, secondary, and tertiary markets. For instance, our informal survey ofmerchants on Park Street revealed that a bodega is dependent on convenienceshoppers who live in the neighborhood, while most of a jewelry store's customerslive in the suburbs and make special trips to shop on Park Street. The table onthe following page gives a conceptual illustration of the market segmentscaptured by different prototypical types of retailers. This information isanecdotal, and is based on individual and group discussions with merchants whowere available to be interviewed.
From our discussions, it appears that some businesses are highly dependent onneighborhood residents for business, while stores selling higher end retailgoods and Spanish-language services capture customers from a wider market area.
The above chart shows how much Park Street's customer base can vary fromstore to store. The following are examples of stores that might be described byeach of these four categories:
· Food Market: Small bodega or larger grocery store, serving mainlyneighborhood residents but also attracting shoppers from outside theneighborhood 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 awayas Willimantic.
· Large Retailer: A larger store specializing in more expensive goods suchas furniture or home furnishings, which shoppers are willing to drive a longerdistance for.
· Service: A store which provides a service, e.g. a travel agency, drivingschool, optometrist, etc. Customers are willing to drive a long distance forSpanish-language services that are not available in the suburbs.
Real Estate Market
HR&A was unable to obtain comprehensive survey data on the Park Streetreal estate market. Based on our conversations with SAMA and Park Streetmerchants, we estimate market rents for quality retail space on Park Street tobe in the $12 to $15 per square foot range. However, rents vary significantlywith the size of the space, the quality of the building, location, and otherfactors. Some merchants are actually paying as little as $8 to $10 per squarefoot.
These rent levels are roughly the same as those reported five years ago inPark Street Revitalization Program. According to that report, prevailing rentswere in the $10 to $14 per square foot range in 1995.Copyright © 2014, Los Angeles Times