The Wall Street Journal
October 15, 2012
Like dozens of small cities and villages throughout the New York region, Spring Valley lost its vibrant downtown because of competition from suburban shopping malls.
"There were fabulous stores, clothing stores, a fish store, a movie cinema and great restaurants that people are still talking about today," says Rita Grayson, Spring Valley's director of housing and community development who has lived in the town for the past 40 years.
When the first mall opened in the region, "that was the death knell for downtown Spring Valley," she says. "Nobody came here anymore."
Now a developer is trying to put Spring Valley back on the shopping map. CPC Resources has spent more than $32 million to develop two mixed-use buildings in the center of the village with 108 units of housing and 18,000 square feet of retail space.
Thomas McGrath, a CPC senior vice president, says the goal is to have people living on Main Street again and shopping locally at stores they use every day like pharmacies and drycleaners. "We think Main Street can still be a part of communities, to make them livable again," says Mr. McGrath.
The retail space is beginning to do deals that reflect the ethnic diversity of the area. Loune's Kitchen, a Caribbean restaurant with old-fashioned tablecloths and plastic roses on its tables, opened in February 2011. A Papa John's pizza franchise is set to open this month and a Chinese restaurant is being opened by Tony Chau, whose family business has been on Main Street for two decades before its building was razed to make way for the new developments.
"We will have to advertise. It might take a while before people know we are back open," Mr. Chau says. "After we open up, I hope we can help this whole area get much better."
But, despite this activity, leasing the retail space has been an uphill climb. Two-and-a-half years after the buildings were finished, the retail space is only now only 25% leased. "Retail is always more difficult," says Mr. McGrath.
Spring Valley is a village in the town of Ramapo in Rockland County. The village's mayor, Noramie Jasmin, is one of the first Haitian-American mayors in the state and says the village has 42 ethnic groups, including large Haitian, Hasidic and Hispanic population. "We support each other and we shop where we live," she says.
But there aren't many options for downtown shopping. Consisting of about six blocks, Main Street is clogged with abandoned stores and shop front churches in an array of denominations. The few stores that are open are mostly dilapidated and sell things like used furniture, men's work boots and phone credit.
In the 1960s and 1970s, Main Street was thriving. But it started to decline in 1969 after the Nanuet Mall opened nearby, according to Ms. Grayson. Visible to people driving into Spring Valley from state Route 59, that mall is now being bulldozed to make way for a luxury mall set to open in 2013.
Just a little further along Route 59, which on weekday mornings is often lined with itinerant workers looking day jobs, is another cluster of big-box stores like Target, TJ Maxx, Bed, Bath and Beyond and IHOP at the New Clarkson Road Mall.
CPC Resources is the for-profit subsidiary of the Community Preservation Corp., a big not-for-profit affordable housing developer and lender that is active in the New York region. During the downturn, some of CPC's for-profit ventures have run into financial problems, most notably a planned waterfront development in Brooklyn at a former Domino sugar refinery. CPC is preparing to close a deal to sell the property.
In Spring Valley, the residential portion of CPC's project has met its goals. One of the buildings, with 53 below-market-rate rentals for seniors, is 100% leased. The other building, completed in May, with 55 units with rents that are affordable for low and moderate-income families, will be 100% leased at the end of the month.
The total development cost for the senior building was $15.6 million and $16 million for the family side. The construction and permanent financing came from J.P. Morgan Chase & Co., Provident Bank, New York State Housing and Community Renewal, Empire State Development Corp., the Village of Spring Valley and the Federal Home Loan Bank.
Mr. McGrath says leasing the retail space was delayed partly because CPC assumed that retail tenants would want to customize interior spaces for their own stores and restaurants. As it turned out, many prospective tenants didn't have the capital to do that.
In response, CPC customized upgrades with potential tenants to make the retail more viable. "This shift in strategy has substantially increased the potential tenant pool that is interested in the site and has been helpful in securing our existing tenants," Mr. McGrath says. For example, it is costing $160,000 to build out the Papa John's space, with CPC assisting the franchisee.
Work is under way and passersby are showing a lot of interest in it, says Edwin Suarez, a contractor who was at the retail site recently during a visit by a Wall Street Journal reporter.
"Everybody walks by and asks about it," Mr. Suarez says. "I've been getting a lot of interest from people wanting jobs."