For its uncertain future, its struggles and the comeback people want to see it make, Midtown has got to be the most fitting symbol of modern Rochester’s cityscape. And it hasn’t even been built yet. Yet it’s for this expectant state of rebirth that makes Midtown so representative of Rochester’s own struggles to redefine itself after manufacturing stopped being our raison d'être.
Rochester’s own struggles to redefine itself after manufacturing stopped being our raison d’être.
While Rochester is finding its footing in academia, research, technology, and services, the renaissance of Midtown, by contrast, might hinge on a return to the mall’s retail roots—contrary to the developers’ initial plans and designs.
The refocus is perhaps more of a surprise to them than anyone else. Initially, their plan was to tap an underserved downtown residential market with an emphasis on office and commercial space. Now, they’re finding downtown may already have the critical mass—and the parking—to attract retail. Enough retail to occupy the two bottom floors of Midtown.
It won’t be high-end like Saks Fifth Avenue, developer Laurence Glazer says, but it won’t be low-end like Dollar General either. The 17-story tower will sit on two parcels of seven, which formerly contained Midtown Plaza, underground parking, eight office buildings and a bus station, most of which was demolished by 2011.
Since 2007, when the state and city began to acquire the land for reuse, the private sector has been trying to envision a viable future for Rochester’s center city. To make the land shovel-ready for redevelopment, the city of Rochester invested some $20 million while Empire State Development invested $55 million.
The city laid out an eight- to 10-year development plan to reconfigure the streets and develop 1 million square feet, including residential, hotel, and retail space. Rochester-based Pike Co. stepped up and invested more than $19 million to redevelop the former Seneca building at 245 E. Main St. The 36,000-square-foot space, finished in September 2013, is occupied by 300+ Windstream employees.
Another major anchor to the city block, however, is Midtown Tower, which will stand in place of the original tower and a portion of Midtown Plaza. In July 2013, City Council agreed to sell those two Broad Street parcels for $2 to Glazer’s firm, Buckingham Properties, based on Alexander Street, and CEO Robert Morgan of Morgan Management in Perinton. Glazer stepped in to partner with Morgan after a deal the city organized with Morgan and David Christa of Christa Construction fell through. After $1 million Glazer and Morgan spent on design and engineering fees, the title for the property was transferred to Glazer and Morgan in late December.
Construction is expected to start this year and cost $57 million. Glazer says there are a lot of costs, in part because the remaining infrastructure at Midtown is not as reusable as originally thought.
A three-story section in the main lobby area, for example, now has no structural wind load capacity, due to the process of demolition. Instead of being able to reuse it, developers say it must all come down. It’s going to add an extra $1.5 million to the total cost, but changes like this, city officials say, might give the project more flexibility than originally envisioned. And given the surprising response from interested tenants, that flexibility is going to be necessary.
“We thought there would be a potential for a little bit of retail, but we have been overwhelmed with the possibility of retail,” Glazer says. “We have gone back to the drawing board and redesigned the entire first two floors of this building for retail.
“Drug stores, supermarket, apparel, high-end restaurant, movie theater, department store, specialty retail, such as ladies’ and men’s clothing. It’s all over the place,” he says.
Many grocery stores, Glazer says, have urban models that could work well at Midtown, such as Wal-Mart, for example. Other stores that don’t already have an urban model are looking to develop one.
In December, Buffalo-based Tops Friendly Markets announced interest in launching its first urban store in downtown Rochester by 2015, the same date Midtown Tower is expected to complete. The company recently underwent a six-person management-led buyout that has led to the new rollout strategy at the company.
Glazer says he and his partner have met with Tops several times about Midtown. “They are one of several stores we are talking with. Nothing is decided yet, but we do have good interest,” Glazer says.
For the retail redesign, Glazer says, the lower floors needed to be edgier with more glass, unlike the blank walls Midtown Plaza used to have. The upper floors will include 182 apartments, with polished concrete floors, open floor plans and roof decks. Glazer says there also will be a dog park on one of the upper floors, complete with wash station.
Buckingham Properties and Morgan Management worked with their architects at Rochester-based Chaintreuil Jensen Stark Architects, in conjunction with Philip Michael Brown Studio, a New York City-based firm specializing in retail design. Craig Jensen, a partner at CJS Architects, says the decision to make Midtown mixed-use will be the key to its success.
“The combination of the residential, retail (and office) components will create activity on the site throughout the day and evening, resulting in a place where people want to live, shop, and work,” Jensen says. The project has been described as a lifestyle center, which in the 1990s meant boutique mall. Today, it means a development combines mixed-use commercial space with the functionality of a shopping mall.
The existing infrastructure, subgrade parking and the building design will support mixed-use, with streets and pedestrian ways on all sides and multiple entrances into the building, plus amenities such as roof terraces and balconies, Jensen says.
Parking, Glazer says, is what makes this retail emphasis possible. His purchase agreement with the city allows his company and Morgan Management to lease more than 400 parking spaces in Midtown Garage. The Tower also has the option to lease a nearby surface parking lot for the general public. That could make way down the road for a grocery store, says Bret Garwood, Rochester’s former director of business and housing development.
Geographically, retail is covered everywhere except the city, Glazer says.
“The retail in Rochester is divided into two primary and two secondary locations. There is the eastern side, which is represented by, for example, Eastview Mall; there’s Henrietta, which is represented by Marketplace, then there’s the west side, which is represented by the mall out there, then there’s a submarket, which I would call Irondequoit. So, basically, it rings the city.
“One of the reasons you can’t do retail in the city is because you can’t find enough land to do retail with enough land for parking. Well, all of a sudden we have land and we have parking, and we have 18,000 people who work within one block, and we have 55,000 people who work here every day, and about 6,000 to 7,000 people who live here and are desperately looking for decent retail,” Glazer says.
Garwood, who managed the city’s real estate development since 2007, worked extensively with Glazer and Morgan on their Midtown plans. In recent history, he says it has been difficult to attract retail downtown, but that, he says, is because there has not been the right mix of retail there combined with critical mass. The last five years have changed that, officials such as Garwood and Rochester Downtown Development Corp.’s president Heidi Zimmer-Meyer explain.
Keeping up with development downtown has become a full-time job, Zimmer-Meyer says. Right now there are nine conversion projections and three new construction projects going on in the city that will add 743 units to the rental market.
The vacancy rate for the downtown market has been below 5 percent for the last five years.
People want to live downtown, Zimmer-Meyer says. The American ideal is no longer suburban. “‘Leave it to Beaver’ was replaced by ‘Seinfeld’ in pop culture,” Zimmer-Meyer says. “People want a different lifestyle today.”
Garwood says: “We’re in a place in the country, in urban areas, where the lifestyle is changing, and if people are attracted to center cities, and those places become vibrant with nightlife, you get the right retailers who are looking to work in an environment like that. Then we can have success beyond what our market studies show.”
In 2013, there were more mixed-use projects in the pipeline than there have been in years, Garwood says, with retail-mixed developments such as College Town, on the corner of Elmwood and Mt. Hope avenues, the 45-acre City Gate development on the former Monroe County Iola Campus, the marina at the Port of Rochester and Midtown.
For Midtown, the developers have a 20-year payment-in-lieu-of-taxes agreement with the city. As part of the deal, Morgan Management and Buckingham Properties would pay, for the first five years of the PILOT, $1 a square foot, which would increase incrementally over subsequent years.
The city also will create a revolving loan of $3.1 million to finance three loans to the developer. In exchange Morgan Management and Buckingham Properties must offer 22 percent of their apartment units as affordable housing.
“We’re hoping with the kind of investments that we’ve been making—this enormous increase in residential living downtown, the design and infrastructure including the updated parking garage at Midtown, the public spaces at Midtown and the high-quality public realm that’s been developed there, as well as the good daytime population of office workers—that a developer like Larry Glazer can be successful attracting retail,” Garwood says.
Retail begets retail, Glazer says. Zimmer-Meyer agrees. “One clothing store is a recipe for disaster. Scattered retail doesn’t work,” she says. “Retail has got to be concentrated to draw people.” And if Glazer says he can get that necessary concentration, you can believe he will, she says.
Morgan and Glazer’s reputations and track records in the community, city officials say, are the main indicators of the future success of the project. If it weren’t for Morgan and Glazer throwing their hats into the ring, Midtown might have remained a demolition site indefinitely. As it is, the future of the rest of the site is uncertain.
In and of itself, the development is not high-risk, Glazer says. The risky part, he explains, is if Midtown does not serve as the catalyst for development that people hope it is.
“I would not describe our project as high-risk, but rather very hard work. There are many moving parts, and everyone involved needs to pull together to make this project a success,” he says. “That means us as owners, the banks that finance, the city that approves, the tenants that need to step up first, and so on,” Glazer says.
“My definition of success would be that if people watched what we are doing and decided to step forward, it would create competition for us, which would be great.”
Glazer says there is a lot about this project that is new to him. Buckingham Properties is not a building company, per se. The 65-person firm previously has focused mainly on rehab projects, but their track record in breathing new life into seemingly hopeless real estate—and filling it with tenants—is phenomenal, especially for Rochester’s market, Zimmer-Meyer says.
“I have watched the industry for over 30 years in this community and seen many great developers take risks in different circumstances,” she says. “The thing that has always been so amazing about Larry Glazer and his company is their ability to fill space. They have an incredibly high leasing rate.”
As a developer, Glazer also is adventurous, although he would call himself nervous. “I get nervous when I go out to buy milk,” Glazer says. “I may seem calm, but I don’t sleep because I’m always thinking about these things, about what if this, what if that.”
Historically, his firm did only property management. It was only in the last 10 years or so that the company began experimenting: with conversions of old industrial buildings into apartments, retail projects, apartment buildings.
Downtown, he has taken buildings such as the formerly empty Art Craft Optical manufacturing building in the Cascade District and transformed it into the high-end office and apartment building Buckingham Commons. Before that, he transformed the Olde Rochesterville property in the St. Paul Quarter and the Michaels/Stern building on North Clinton Avenue.
“Along the way, we have picked up a lot of skill sets, financing skill sets, project management, and stuff like that, and we’ve beefed up the organization a lot, so we can handle these projects,” Glazer says.
For Midtown, Glazer says, retail is going to work for an unusual set of circumstances that have been at work in Rochester in recent years. Officials say homegrown developers such as Glazer have been central to the revitalization of downtown that has primed the Midtown block for this renaissance—independent of the outside corporate giants Rochester has relied on for so long.
“Rochester has had a number of failures the past 20 years or so and I think the psyche of our community has been somewhat damaged—damaged to the point that we have lost self-confidence in ourselves for success,” Glazer says. “It is pretty easy to rattle off the causes, but now we need some successes. Projects like the new MCC, Sibley’s, Windstream, Eastman Park, U of R, certain infill housing projects, school improvements, etc. will help.”
Glazer says that if Midtown can be brought back, the confidence in downtown redevelopment will return, bringing developers and occupants back with it.
He says, “Monroe County can’t thrive without a strong city, so there is lots to be done.”