What will it take to breathe life into the center of
downtown Rochester?
                 The
corporate crusaders of Wilmorite Inc. thought they had an answer. When the mall
magnates secured a $4 million federal loan and began transforming the Sibley
Building into retail and office space in the early 1990s, there was hope that
they would spur a renaissance of commercial activity on Main Street.
                 But a
decade later, the building is only 67 percent occupied, according to leasing
and property manager David Lang. And in terms of development, the surrounding
area is still stuck in the Middle Ages, with hundreds of thousands of square
feet of empty commercial space.
                 Given
Sibley Centre’s high vacancy rate, Rochwil Associates — the Wilmorite
affiliate in charge of the redevelopment effort — was unable to make a $4
million loan payment this summer. Rochwil and city officials recently agreed to
refinance the loan, saving the city from having to cover the payment itself.
                 Rochwil’s
struggle to attract tenants may cast a shadow over another project hyped as
downtown’s saving grace: Rochester Central Station. The Rochester-Genesee
Regional Transportation Authority plans to build a bus terminal just west of
the Sibley complex. Central Station is also to have 70,000 square feet of
retail space and 300,000 square feet of Class A (read: “classy”) office space,
according to the project’s new Web site (www.RochesterCentralStation.com).
                 RGRTA
Chair William Nojay has said he’s counting on revenue generated by the
commercial space and a 1,000-car parking garage to help cover the facility’s
yearly operating costs. He has also suggested that the city should chip in,
because many city residents ride the buses.
                 In
1998, Nojay estimated that yearly operating costs would be in the neighborhood
of $750,000. But that was early in an as-yet-unfinished site-planning process.
                 Asked
how he thought Central Station could attract tenants where the Sibley Centre
had failed, Sibley leasing manager Lang says, “That’s a good a question.”
                 Nojay,
the project’s loudest cheerleader, wasn’t willing to answer that question last
week when it was posed by this newspaper, which has expressed skepticism of the
project. “As long as people like the whole crowd… at City believe everything about Rochester is negative, negative,
negative, nothing good will happen in Rochester,” he told this reporter before
abruptly hanging up.
                 Donald
Riley, CEO of RGRTA, could not be reached for comment.
                 Nevertheless,
it’s safe to say Riley and Nojay remain optimistic about the project’s chances
of securing enough tenants to keep it, as Nojay once said, “revenue neutral.”
                 “I’m
an optimist,” says Andrée Mastrosimone, president of Calm & Sense
Communications. “I tend to think, ‘If you build it, they will come.'”
Mastrosimone’s corporate and marketing-communications firm spent a year,
beginning in February of 2000, trying to attract retail and office tenants to
the Sibley Centre.
                 But
considering Main Street’s prospects for revitalization these days, she says: “I
was more optimistic a couple of years ago than I am now.”
                 The
negative feedback Mastrosimone got from prospective Sibley tenants included
concerns about the area’s vitality and safety. “There wasn’t a lot of
business-type traffic during the day,” she says. “There wasn’t a feeling of
being among a community of your peers. Now the area’s become less and less
occupied. In terms of retail, you can’t do a lot of quick shopping. Restaurants
are limited. It really is like a ghost town on Main Street.”
                 Ironically,
downtown’s stagnant state seems to be perpetuated in part by the possibility
Rochester Central Station will be built there. The city block bordered by North
Clinton Avenue and East Main, St. Paul and Mortimer streets is a shell of
vacant space. Property owner Edwin Cohen could not be reached for comment. But
last year, he told the Rochester Business
Journal he’d received several calls from people interested in opening
restaurants and shops in the area. At the time, plans for the transit center
included the demolition of his buildings. Understandably, prospective tenants
were wary of signing a lease.
                 “I
could fill [my properties] very easily if they decide to put the transit center
in there or not,” Cohen told the RBJ.
                 Mastrosimone
also says business owners she tried to lure to the area felt “trepidation being
downtown in an environment that still seemed to them somewhat unsafe.”
                 Lang,
the person currently in charge of marketing the building, has heard similar
concerns. “It’s a negative perception,” says Lang, who considers safety “a
non-issue.” While some people may feel the area is unsafe, he says, “in terms
of problems, they’re almost nonexistent.”
                 Lang
considers vacancy more of a problem in the area than safety. Of Sibley Centre’s
1.1 million square feet of space, roughly 80 percent is being marketed as
office space, most on the upper floors. Lang characterizes the redeveloped
office space as “a high-end Class B.” In office space marketed as Class A, the
type RGRTA is planning, “the amenities and finishes tend to be of higher
quality, and there are more of them,” Lang says.
                 Of
course, the cost of Class A space is commensurately higher, too: as much as $23
per square foot, compared to $9 to $13 per square foot for B-grade digs,
according to Lang.
                 “Currently,
the downtown market’s flooded with A and B space,” Lang says. Tenants aren’t
asking for Class A space in particular, so much as they’re “looking for a good
value,” he says. “That’s the overriding issue.”
                 “There’s
a limit on how much you’d be able to charge in rent to businesses that go into
that facility,” City Councilmember Brian Curran says of Central Station.
“There’s a lot of vacant space downtown to compete with them. There’s a market,
but it’s not an unlimited market.”
                 “When
you take a look at Class A in the region, everything is softer now,” says Heidi
Zimmer-Meyer, executive vice president of Rochester Downtown Development Corp.,
an economic development organization and not-for-profit business association.
Zimmer-Meyer hasn’t seen RGRTA’s plans for the project. (“I don’t know what’s
holding it up at this point,” she says. “They’ve been very close to the vest on
this.”) But she is aware that RGRTA is hoping revenue from its commercial space
will pay the project’s bills.
                 “That’s
their goal,” she says, “but if you’ve got rising vacancy downtown, that’s a
tricky business.”
                 “You
don’t want it to be a spec project,” Zimmer-Meyer says, referring to office
construction undertaken based on speculation it will be bought or rented. “At
the same time, there’s evidence that if you plan a project appropriately, if
you pre-lease it, you may be able to pull it off.”
                 Furthermore,
she says, “if a confluence of things in the marketplace hits at the right time,
it could be a very good thing.” For example, the economy could be on the
upswing when the space goes on the market. She also cites the proposed downtown
performing arts center and fast ferry as projects that could help Grand Central
Station be a success.
                 But
even if those projects don’t come to fruition, Rochester Central Station “can
be a stand-alone project,” she says. “It may be easier to make this thing work
than it sounds.”
                 Zimmer-Meyer
believes the terminal and its attendant businesses can have a profound effect
on the public’s perception of downtown Rochester. “Thinking globally, in some
ways these mega-projects have a huge impact on space and how we think about
what we do on our off time,” she says, tossing out ideas like lunch spots and
jazz clubs in the area.
                 “In
the case of a bus terminal, there are different people coming through at
different times,” she says. “You have suburban park-and-ride combined with the
people who use city buses. Some times of year, there are students. It’s a whole
mixed bag of different kinds of players.”
                 But
from Mastrosimone’s marketing perspective, there may be too many players for
the comfort of the corporate types RGRTA hopes to lure there. When you’re
trying to attract office tenants, “you have to make sure that the retail responds
to whatever demographic it is you’re looking to have in that environment,” she
says. “If it is upscale business types, you need to have retail to support
that.”
                 The
terminal proponents’ talk of revitalizing downtown sounds familiar to
Mastrosimone. “I think we were searching for anything we could [use]” to market
the Sibley space, she says.
                 “The
least expensive thing to do is generate excitement,” says Mastrosimone. But,
she says, “you can only spin something so much.”
This article appears in Jul 31 – Aug 6, 2002.
