Grocery store to come to downtown area

After a yearlong search and a snub from Whole Foods, downtown New Haven’s first grocery store will open shop at 360 State St.

Developers of the mixed-use residential and commercial development at 360 State St. — the largest private construction project in the history of New Haven — are negotiating a contract with a large-scale grocery store to open on the ground level of the project. City officials confirmed that the much-anticipated approximately 30-story development, currently scheduled for completion by fall 2010, will house a full-service grocery store occupying 30,000 square feet, as well as a bike store, 500 apartments and six stories of parking,

Although city officials declined to release the name of the new grocery store because it could derail ongoing negotiations, Director for Economic Development Kelly Murphy said the original contract for the 360 State St. development stipulated that the developer must recruit a ground-level grocery store “of comparable quality and service to that of Whole Foods or Trader Joe’s.” (A Whole Foods is set to open in Milford at the end of this year.)

Bruce Becker ARC ’85 SOM ’85, president of the project’s developing company Becker and Becker Associates, confirmed Tuesday that his firm is currently negotiating a letter of intent with a “major grocery store” based on an offer received in recent weeks. He added that he hopes to announce a deal later this fall.

For much of this year, the developer has been searching for potential tenants that would meet contract requirements. Though the downtown area offers a location more convenient to many residents and students than the Shaw’s Supermarket on Whalley Ave., logistics such as availability of parking lots led to some tension with potential tenants. The contractual agreements stipulated a $250,000 fine for Becker and Becker Associates if they failed to secure a supermarket for the space.

“Whole Foods and Trader Joe’s both looked into the site,” said Ward 7 Alderwoman Bitsie Clark, whose ward includes the bulk of downtown. “But the chains showed either little interest or insisted there be more parking.”

For example, Murphy said Trader Joe’s specifically demanded that a ground-level parking lot, as opposed to the multi-storied garage planned for 360 State St., be available on site. Clark echoed the point, saying the 360 State St. site did not fit the often-rigid business models of some large grocery stores, who often only consider an area that can guarantee an immediate clientele and a steady source of profits.

“With 360 State St., it is more a question of bringing in an additional 500 households than having an existing clientele,” she explained.

While Clark said she became concerned over the prolonged search for a tenant, she added that the challenge of bringing a new retailer to the city is not new, since Gourmet Heaven only came to New Haven after Bruce Alexander ’65, vice president of New Haven and State Affairs and Campus Development, sent students to scour New York City for a grocery store model that would cater to the needs of both Yale students and downtown residents.

Indeed, it is the potential economic rewards that the State Street development may bring that excites the developers and local administrators.

Anthony Bialecki, the city’s deputy director of economic development, said the new development will help bring as many as an additional 1,000 residents to downtown New Haven, adding to the empty-nesters, graduate students, professionals and retirees who already occupy the area. His office estimates that the influx of new residents will help generate an additional $30 million in retail revenue annually.

While Clark said she envisions the new apartments attracting residents hoping to find affordable housing close to New York City, the new development will also set aside 50 affordable housing units for lower-income residents.

Of these 50 apartments, 20 will be subsidized by the city under a Section 8 housing voucher scheme while the rest will be funded by various state programs. Becker said the cost for renting a unit in the building will range from $2.75 to $3.00 per square foot per month. Given downtown New Haven’s current vacancy rate of 1 percent —one of the lowest in the country — Becker said there will be no shortage of demand for the units.

The 360 State St. project began construction in September 2008 and is projected to cost $180 million, $60 million of which has already been invested.

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