Downtown’s occupancy rate lauded

By Stacy Kess

March 23, 2014

For rent – but not for long.

As far as small-town downtowns go, Downtown Delaware is thriving, both statistically and in the eyes of the city and Main Street Delaware, a group dedicated to the success of Sandusky Street.

With only half a dozen store-fronts currently vacant, Downtown Delaware shows a higher occupancy than many other small town main streets.

“Our historic downtown has one of the highest occupancy rates in the state of Ohio at over 95 percent occupancy,” said Sean K. Hughes, Business Concierge and Economic Development Director for the City of Delaware. “What you are seeing is some natural turnover including retirements of store owners, some moves to larger and more conducive spaces, and some global market condition pressures. An example of global market condition pressures is The Outer Layer moving.”

The Outer Layer, a longtime downtown occupant providing sports apparel, recently moved to a larger location outside downtown, but is more warehouse than storefront. The store has stopped doing foot traffic and now serves large orders.

The high occupancy rate is not an accident, said city spokesperson Lee Yoakum.

“The City took the lead on this in the late 1990s with the streetscape program that enhanced the look of the central business district and really kick-started much of the downtown’s resurgence,” he said. “Streets surfaces were replaced, as were sidewalks, trees and just about everything connected to or under the pavement. Decorative bricks framed new sidewalks, new signage, traffic signals were added. Overhead power lines were relocated behind buildings and underground pipes were replaced and, where needed, re-routed.”

That’s because of strategic planning and money – both private and public – spent on renovating the buildings, improving the walkability of downtown and rehabbing the facades of the buildings.

Even the Historic Strand Theatre, one of the few small town downtown movie theatres remaining in Ohio has received an earmark in the upcoming state capital budget for $150,000.

“The due diligence of our building owners in two ways contributes to our downtown success, renovation and preparation of their buildings and their willingness to not simply rent to the first warm body but to consider the downtown in it’s entirety when deciding who will be granted the space,” said Frances Jo Hamilton, executive director of Main Street Delaware.

Just three years ago, 23 store fronts were empty and ready to be rented, said landlord and former Beehive Books owner Jim Diamond. The former bookstore along the first block of North Sandusky Street sits empty, but that’s because Diamond is looking to fill the store strategically. He said the new tenant has to be one ready to bring sometime fitting to the concept of creating a destination entertainment district in downtown Delaware.

“I’d really hate to duplicate something that’s already in downtown,” Diamond said. “I think that would be one of the strongest users in the downtown. I don’t think we can have enough restaurants in the downtown. We really could be a food destination.”

Another reason for the occupancy of downtown is the rent and the spaces for lease.

“Nearly 70 million private dollars in rehabilitation of our downtown buildings have lead us to higher rent rates than we had here 15 years ago,” Hamilton said. “However, those higher rates, while comparable to other similar downtowns, attract the kind of businesses that make a downtown successful.”

A search of rental rates in comparable Ohio cities and college towns shows downtown rental retail prices steady. Downtown store fronts often rent out from $6 to $12 a square foot – a range dependant on space, type of storefront, if utilities are included, upkeep of the property and proximity to the “heart” of downtown.

Diamond said, in a lot of ways rents are down.

“I think our rents are very reasonable at this point,” he said. “We have seen a depression of rents, are part of it. Rents are half of what they are at the mall in the downtown.”

He said rental rates for the space is not always reasonable, but that is something many landlords in downtown are trying to correct with building improvements and a dedication to the idea of creating a destination entertainment district.

“We do have some spaces where the buildings are in very poor conditions, and the rents may be unreasonable in what they need to repairs them,” Diamond said.

On the other hand, he said, just across the street from his former bookstore is the Hamburger Inn Diner, where current owner Bill Michailidis has invested in both interior and exterior improvements, including a new sign and new awnings.

Businesses do move, Hamilton said. Some want to purchase their own buildings, such as Barley Hopsters, which moved from the corner of Sandusky Street and Central Avenue to the corner of Sandusky and William Streets.

Others move because of general market turnover or changing business models, Hughes said.

Still other storefronts become empty when an owner dies or moves and the building becomes tied up in legal issues, such as the former Rabbit Quick Print on South Sandusky, Diamond said.

Hughes said the city and its partners are continuing downtown development with a purpose. They are taking the know-how from their experiences and the advice from organizations such as Heritage Ohio and focusing on attracting business that will continue the downtown destination experience.

Restaurants have to be a major part of that, he said. The City and its partners worked to attract Son of Thurmans to Delaware, and said restaurants generate traffic.

“Artisan shops such as gourmet candy shops and custom toy shops are popular storefronts in these types of downtown districts,” Hughes said. “Unique artisanal home decorations and antiques do well. I think a great concept that we have seen recently open in the Short North (in Columbus) was a board game parlor. Shops where people can congregate and interactively participate with each other are fantastic. Creativity is key and it has to be something that is fairly unique and you wouldn’t necessarily find in a department or discount store.”