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LI’s new, pricey downtown apartments boost bars, restaurants

Diners enjoy some fresh air at That Meetball

Diners enjoy some fresh air at That Meetball Place in Patchogue during a festival on Sept. 24, 2016. High-end apartment buildings rising near Long Island's train stations have boosted business at restaurants and retailers in Long Island's downtowns. Photo Credit: Veronique Louis

The new, high-end apartment buildings rising near Long Island’s train stations have given a boost to downtowns in communities such as Patchogue, Farmingdale and Rockville Centre, with storefronts filling up as new businesses open and long-established ones expand.

The impact is especially dramatic for restaurants and bars, creating a more active night-life scene in those communities. But the gains aren’t across the board: Some local retailers, who face stiff competition from malls and the internet, say they have not yet gotten a big bump in business.

In the past decade, roughly 7,000 new housing units have been approved near train stations in Nassau County and 5,000 in Suffolk County, said Eric Alexander, executive director of Vision Long Island, which advocates for downtown development.

The Island’s business owners and political leaders hope the new apartments and condominiums will help reinvigorate the local economy, which is grappling with a shortage of multifamily housing, an aging workforce, and the need to create and draw in more businesses.

The new construction “should be beneficial in attracting and retaining young workers, which we need,” said John Rizzo, chief economist for the Long Island Association, the Island’s largest business group. “It will not only provide them with housing and make it easier for them to access the amenities they want, but it will have economic benefits.”

The newly built apartments — which offer amenities such as pools, gyms and social events — have been filling up with affluent young professionals and retirees, developers say. But the premium for living in new buildings is substantial. The average rent for apartments built since 2009 is $3,029, compared with about $1,700 to $1,966 for those built before 2000, the Long Island Association reported, citing data from national real estate data company Reis Inc., based in Manhattan.

Not all the rentals charge high prices; about 10 to 15 percent are set aside for people with low and moderate incomes, said Alexander of Vision Long Island.

In certain downtowns, the effect of the new apartments has been transformative.

In Farmingdale, roughly 200 apartments have opened near the train station since 2014, and another 70 are under construction nearby. Five years ago, “we had 23 empty stores on Main Street,” said Mayor Ralph Ekstrand, who owns Moby Drugs on Main Street. “Now we have two . . . If you come to downtown Farmingdale, it’s just totally alive.”

In Rockville Centre, where a 349-unit apartment complex opened near the downtown in 2011, 98 percent of stores and offices are occupied this year, up from 85 percent in 2010, according to the village.

In Patchogue, 700 downtown rentals and condominiums have opened in the past decade. In 2004, only 79 percent of downtown storefronts were occupied, Mayor Paul Pontieri said. Today that number has risen to 95 percent, not including the space at the New Village at Patchogue complex, which opened in 2014 with 291 apartments, 18,000 square feet of office space and 46,000 square feet of retail space.

By contrast, retail occupancy rates have dipped slightly across Long Island. Overall, 93.8 percent of the Island’s retail spaces were occupied in the second quarter of this year, down 0.3 percentage points from six years before, Reis reported.

Many of the new residents flock to local eateries. “What is driving downtowns right now are restaurants and bars, anything related to food,” Alexander said.

Since Farmingdale’s new rental buildings opened, “there’s a lot more foot traffic,” said Michael DiTroia, general manager of the 16-year-old Library Cafe. “It seems like it’s a younger generation, people commuting into Manhattan.”

The pub-style restaurant has seen annual sales growth of 17 percent to 20 percent since about 2010, DiTroia said.

But the gains are not evenly spread. A few doors down at Main Street Antiques, co-owner Pauline Cohen said she has not seen much of a boost from the new renters, though she remains optimistic. “We sort of hoped that we would get an influx of customers from [the new apartments], but we didn’t get as much as we expected,” Cohen said.

In Rockville Centre, too, eateries and pubs said they were getting a big bump in sales, while brick-and-mortar retailers described a more modest effect.

At Cabo, a Mexican-themed bar and restaurant, co-owner Angelo Ramunni said he has enjoyed 5 percent to 10 percent annual growth in customers for several years, plus a roughly 30 percent increase so far this year.

“We see a lot of new faces, and a lot of them are young executives and young professionals,” Ramunni said.

Even so, retailers can face an uphill climb. “On Long Island, everyone gets in their car just to go down the block,” said Van Pape, owner of the shoe store Rhea Nichols, which specializes in sparkly, comfortable shoes for special events.

Pape said he hopes that as more rentals get built, he’ll see more of an impact on sales. A 165-unit apartment complex opening next year, he noted, “is right in the village, and that’s even more walkable, so you never know.”

In Patchogue, the village’s support for new rentals, town houses and affordable housing, its $1 million renovation of the Patchogue Theatre for the Performing Arts — which brought in 150,000 visitors last year, up from 65,000 in 2004 — and events such as outdoor festivals have been a boon to local businesses, Mayor Pontieri said.

“We’ve had 20 new restaurants come into town,” he said. “They get the overflow from the theater, and the retail that we have has benefited. I think everybody gets their fair share of what we have.”

Lorice Fiala, co-owner of the 70-year-old Colony Shop, which sells children’s clothing, said the local chamber of commerce urges shops to stay open late to serve customers who come downtown for special events.

“We want them to all stay [open] on Friday nights a little later and capture all these people that are walking around,” Fiala said. “Now we’re here Fridays and we stay until 7, and it’s been good.”

Downtown housing “gives you feet on the street,” said Jim Morgo, a member of the Long Island Regional Economic Development Council, a state-appointed council made up of business, labor and education leaders. “Patchogue’s program is the poster child for how it works.”

But constructing new rentals does not by itself guarantee a quick revitalization of stagnant downtowns. Some communities find that drawing renters out at night and on weekends can be a gradual process.

In Valley Stream, about 400 new downtown housing units have been approved in the past decade, according to Vision Long Island. Among them is the 90-unit Hawthorne Apartments, which opened in 2014, and the new 72-unit Sun Valley Towers. “Since it’s only two apartment buildings, I wouldn’t say it’s been a huge impact,” said David Sabatino, co-owner of the five-year-old coffee shop Sip This and an advocate for downtown business owners. “But in terms of people through the door, I definitely have seen that go up.”

In Mineola, about 300 apartments opened in 2014 and 2015, and more than 300 new rentals just started leasing. “We’re already starting to see the beginnings of new activity, new businesses,” said Tony Lubrano, president of the Mineola Chamber of Commerce.

But it’s a gradual change, he said.

Local eateries do brisk business at lunch, but at night and on weekends, “Mineola’s downtown has really been a ghost town for decades,” Lubrano said.

The chamber and the village have hosted events such as car shows, street fairs and outdoor concerts, and they have distributed about 1,000 packets stuffed with promotions for local businesses.

“It requires a focused effort,” Lubrano said. “The road is still a long road ahead of us, but at least it’s moving slowly in the right direction.”

In Westbury, 350 to 400 rental apartments and condominiums have opened downtown in the past decade, making for a total of about 800 units of multifamily housing, Mayor Peter Cavallaro said. The village has opened a plaza for outdoor concerts. A performing arts center, The Space at Westbury, opened in 2013. Federal, state and local funds have helped downtown business owners upgrade their facades, and the village recently won a $10 million state grant for additional improvements.

In the 1990s, one in five downtown stores stood vacant. Now, all but five or six of the village’s roughly 125 stores are occupied, Cavallaro said.

Even so, retailers face intense competition from the nearby Roosevelt Field mall and other major shopping centers, Cavallaro said. The village is discussing plans to make the area around the train station more vibrant; options include more parking, LED streetlights, benches and trees, and potentially an art gallery, he said.

“You can always try to improve the walkability, and that’s something we want to tackle with the grant money,” Cavallaro said.

Indeed, business owners and communities need to get creative to support local retailers, said Marshal Cohen, chief retail analyst at Port Washington-based NPD Group.

The push to shop locally “has a greater impact on restaurants and services than small, independent retail,” in part due to competition from the internet, Cohen said. Local shop owners can increase their visibility through community service, sponsorships, student discounts and events such as scavenger hunts and Halloween parties, Cohen said.

It’s an old-fashioned approach to a modern problem, he said: “Think small-town USA, 1950s-style.”

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