October 11, 2004
Retail explosion | A new $11.7 million shopping center is the latest development in Bangor's booming mall area
By Sara Donnelly
Brad Ryder, owner of Epic Sports in downtown Bangor, remembers when the blocks around his store made up the area's most popular place to shop. Not so today, when the bulk of the region's retail revenue comes not from the center of town but from an 800-acre network of malls and shopping centers on the eastern outskirts of the city. This area, which includes the Bangor Mall and more than 100 other chain retail stores and restaurants, produces the second largest municipal retail revenue in the state, second only to greater Portland and its Maine Mall corridor.
And in August, construction began on the Bangor Parkade, the newest addition to the city's ever-sprawling mall area. Plans for the $11.7 million shopping center include an 88,904-square-foot anchor store widely rumored to be the state's third Kohl's, a chain department store based in Wisconsin ˆ and that's just the latest project. In late September, Massachusetts-based W/S Development Associates announced plans to acquire a 50-acre parcel on Stillwater Avenue, where it plans to create a multi-million-dollar retail shopping center. Dick's Sporting Goods opened in the former Porteous building in the mall this past summer, Target swung open its doors on Longview Drive in March and a new Chili's restaurant is under construction on Stillwater Avenue with a projected opening in December. Bangor officials, including City Manager Ed Barrett, say the new development is just more evidence that the city is one of the strongest consumer magnets in the state, attracting shoppers from north of Waterville and into Canada.
"What we've always seen in this area is retail stores tend to do well," says Barrett of the land near Stillwater Avenue and I-95. "We bring people in from all over central and northern Maine. You've probably got a quarter of a million people who journey to Bangor for shopping and other personal [activity] reasons."
But Ryder, who has worked in Bangor-area retail for close to a decade, says he's noticed fewer Canadian shoppers since provinces including New Brunswick and Nova Scotia in the late 1990s began charging a 15% sales tax on items purchased in the United States. He wonders if the migrating shopper population is still strong enough to support the large chain retailers coming to town. "From the customers who shop here, their concern is there's an awful lot of expansion but the population hasn't grown in Bangor," says Ryder. "Where are they all going to come from? Because they're not coming from Bangor."
A retail powerhouse
Mike Lungo is the son-in-law of Judson Grant, the Bangor businessman who owns the 28-acre parcel of land on which the Bangor Parkade will be located. He says Grant suspected the mall area would continue to be a hot spot for development despite the waning economy, and so applied three years ago to have the parcel rezoned for commercial use. After all, adjacent land had already been used for such retail giants as Toys R Us, Staples, Home Depot and Wal-Mart. If the 234,000-square-foot foundation currently sitting on the land is any indication, Grant's hunch was right.
"There is a lot of activity up here," said Lungo. "We probably have three or four [retail] projects up here, of which ours is just one."
John Toic, vice president of Bangor Parkade Inc., which leased the land from Grant, says retail clients of his parent company, First Hartford Realty Corp. in Manchester, Conn., were particularly interested in the Bangor area because it is seen as a shopping hub for central and northern Maine and Canada. According to Toic, First Hartford spent several months scouting the Bangor area for property before leasing from Grant and optioning another site at Longview Drive and Stillwater Avenue; financial terms of the deals were not disclosed. The new turnpike exit near Grant's property "weighed heavily" on First Hartford's decision to lease the parcel, he says.
Toic claims to have leased eight of the 12 commercial spaces projected for the property already, even though the grand opening of the site is not planned until next fall. All of the early leases, says Toic, have gone to large chain retailers. Bangor Parkade's construction plans detail four commercial buildings at a cost of $7.4 million.
"We saw that there was a need on the part of tenants to service this market, which we see as a natural extension of southern development" in Portland, says Toic, who declined to name the stores signed on to lease space or the lease rate his firm is charging. "We see this as a regional shopping center that will draw [consumers] from other places."
Hard data about where shoppers in Bangor come from, however, is elusive. This year, the Greater Bangor Convention and Visitors Bureau plans to conduct the first study of Canadian tourism in Bangor in the city's history. Anecdotally, Donna Fichtner, the bureau's executive director, says Canadian interest in Bangor is up marginally from previous months, although Wade Merritt at the Canada desk of the Maine International Trade Center's Bangor office agrees with Ryder that lately the Canadian presence seems to have weakened a bit.
But state data about the retail power of Bangor is undeniable. Bangor, the state's third largest city, boasts a population of just over 30,000. Median yearly household income in the city hovers around $29,000, almost $10,000 less than the state average. And yet, according to data compiled by the Maine State Planning Office, 2003 retail sales in Bangor totaled $1.4 billion, second only to retail revenue in Portland (which includes the Maine Mall) at $2.4 billion. Augusta, the state's third largest retail center, lagged far behind Bangor in retail revenue for 2003 at $888 million.
Since the Bangor Mall first swung open its doors in 1977, developed commercial property on the land along the eastern outskirts of the city has expanded from 8,300 sq. ft. to 2,344,388. According to Katherine Weber of the Bangor Planning Office, roughly 65% of commercially zoned land in that area has been developed. The Bangor Parkade stands to become the second largest retail complex in the city after the Bangor Mall when it is completed next year. Officials hope the project, which city manager Barrett refers to as "a significant development," will continue to bring millions of people to the city.
The local effect
Chain stores like Target, Wal-Mart and Home Depot have always been attracted to consumer hubs such as Portland and Bangor, according to Jim McGregor, executive vice president of the Maine Merchants Association. "My sense is that the chains continue to feel that central and southern Maine are good shopping areas," he says. "[Retailers] do extensive studies before they move into a place."
Ellen Tolley, a spokesperson for the National Retail Federation, says chain retailers evaluate a potential site by studying the success of stores in the area. "Large retailers look at retailers already in the market," says Tolley. "The types of consumers in certain areas, where they work, what they do, what their interests are. Depending on the type of retailer, there are different factors to consider."
Tolley says new shopping centers like the Bangor Parkade can improve a city's overall retail economy by encouraging more consumer traffic in the area. Sally Bates, an officer in Bangor's Business and Economic Development Office who specializes in downtown revitalization, says local store owners do compete with the mall for business, but bank on the strength of their niche market offerings and the small-town atmosphere of downtown shopping to distinguish their business from the large chain stores. (See "The downtown rivalry," this page.)
Rod McKay, Bangor's economic development director, says the city has prioritized mall expansion in the same way South Portland does in the Maine Mall area. "What the expansion at the mall means is a more stable tax base and an increase in the number of jobs," says McKay, who points out that stores at the Bangor Parkade are projected to provide more than 250 new jobs. "Since the Bangor Mall started in 1978, we've had an increase of about 5,700 more jobs [in the mall area] ˆ that's more than 200 new jobs for each 100,000 sq. ft. of store space. The mall provides the city more than $5 million in tax revenue just on the real estate alone."
Back at Epic Sports in downtown Bangor, Brad Ryder says he and other local retailers don't feel threatened by the popularity of the mall. If the downtown can maintain the feeling of community that Ryder remembers from 30 years ago, when stores like now-defunct Dakin's Sporting Goods thrived on Central Street, local shop owners think that will be enough to generate their own loyal customers.
"My buying power is not as great as chains of 100 [stores] ˆ that's just basic economics," says Ryder. "If it's simply a matter of dollars and cents, well, you might as well go out [to the mall]. But if you're looking for service from a staff that has critical knowledge of the products we sell, that's what we have to offer. That's how we compete."
And in August, construction began on the Bangor Parkade, the newest addition to the city's ever-sprawling mall area. Plans for the $11.7 million shopping center include an 88,904-square-foot anchor store widely rumored to be the state's third Kohl's, a chain department store based in Wisconsin ˆ and that's just the latest project. In late September, Massachusetts-based W/S Development Associates announced plans to acquire a 50-acre parcel on Stillwater Avenue, where it plans to create a multi-million-dollar retail shopping center. Dick's Sporting Goods opened in the former Porteous building in the mall this past summer, Target swung open its doors on Longview Drive in March and a new Chili's restaurant is under construction on Stillwater Avenue with a projected opening in December. Bangor officials, including City Manager Ed Barrett, say the new development is just more evidence that the city is one of the strongest consumer magnets in the state, attracting shoppers from north of Waterville and into Canada.
"What we've always seen in this area is retail stores tend to do well," says Barrett of the land near Stillwater Avenue and I-95. "We bring people in from all over central and northern Maine. You've probably got a quarter of a million people who journey to Bangor for shopping and other personal [activity] reasons."
But Ryder, who has worked in Bangor-area retail for close to a decade, says he's noticed fewer Canadian shoppers since provinces including New Brunswick and Nova Scotia in the late 1990s began charging a 15% sales tax on items purchased in the United States. He wonders if the migrating shopper population is still strong enough to support the large chain retailers coming to town. "From the customers who shop here, their concern is there's an awful lot of expansion but the population hasn't grown in Bangor," says Ryder. "Where are they all going to come from? Because they're not coming from Bangor."
A retail powerhouse
Mike Lungo is the son-in-law of Judson Grant, the Bangor businessman who owns the 28-acre parcel of land on which the Bangor Parkade will be located. He says Grant suspected the mall area would continue to be a hot spot for development despite the waning economy, and so applied three years ago to have the parcel rezoned for commercial use. After all, adjacent land had already been used for such retail giants as Toys R Us, Staples, Home Depot and Wal-Mart. If the 234,000-square-foot foundation currently sitting on the land is any indication, Grant's hunch was right.
"There is a lot of activity up here," said Lungo. "We probably have three or four [retail] projects up here, of which ours is just one."
John Toic, vice president of Bangor Parkade Inc., which leased the land from Grant, says retail clients of his parent company, First Hartford Realty Corp. in Manchester, Conn., were particularly interested in the Bangor area because it is seen as a shopping hub for central and northern Maine and Canada. According to Toic, First Hartford spent several months scouting the Bangor area for property before leasing from Grant and optioning another site at Longview Drive and Stillwater Avenue; financial terms of the deals were not disclosed. The new turnpike exit near Grant's property "weighed heavily" on First Hartford's decision to lease the parcel, he says.
Toic claims to have leased eight of the 12 commercial spaces projected for the property already, even though the grand opening of the site is not planned until next fall. All of the early leases, says Toic, have gone to large chain retailers. Bangor Parkade's construction plans detail four commercial buildings at a cost of $7.4 million.
"We saw that there was a need on the part of tenants to service this market, which we see as a natural extension of southern development" in Portland, says Toic, who declined to name the stores signed on to lease space or the lease rate his firm is charging. "We see this as a regional shopping center that will draw [consumers] from other places."
Hard data about where shoppers in Bangor come from, however, is elusive. This year, the Greater Bangor Convention and Visitors Bureau plans to conduct the first study of Canadian tourism in Bangor in the city's history. Anecdotally, Donna Fichtner, the bureau's executive director, says Canadian interest in Bangor is up marginally from previous months, although Wade Merritt at the Canada desk of the Maine International Trade Center's Bangor office agrees with Ryder that lately the Canadian presence seems to have weakened a bit.
But state data about the retail power of Bangor is undeniable. Bangor, the state's third largest city, boasts a population of just over 30,000. Median yearly household income in the city hovers around $29,000, almost $10,000 less than the state average. And yet, according to data compiled by the Maine State Planning Office, 2003 retail sales in Bangor totaled $1.4 billion, second only to retail revenue in Portland (which includes the Maine Mall) at $2.4 billion. Augusta, the state's third largest retail center, lagged far behind Bangor in retail revenue for 2003 at $888 million.
Since the Bangor Mall first swung open its doors in 1977, developed commercial property on the land along the eastern outskirts of the city has expanded from 8,300 sq. ft. to 2,344,388. According to Katherine Weber of the Bangor Planning Office, roughly 65% of commercially zoned land in that area has been developed. The Bangor Parkade stands to become the second largest retail complex in the city after the Bangor Mall when it is completed next year. Officials hope the project, which city manager Barrett refers to as "a significant development," will continue to bring millions of people to the city.
The local effect
Chain stores like Target, Wal-Mart and Home Depot have always been attracted to consumer hubs such as Portland and Bangor, according to Jim McGregor, executive vice president of the Maine Merchants Association. "My sense is that the chains continue to feel that central and southern Maine are good shopping areas," he says. "[Retailers] do extensive studies before they move into a place."
Ellen Tolley, a spokesperson for the National Retail Federation, says chain retailers evaluate a potential site by studying the success of stores in the area. "Large retailers look at retailers already in the market," says Tolley. "The types of consumers in certain areas, where they work, what they do, what their interests are. Depending on the type of retailer, there are different factors to consider."
Tolley says new shopping centers like the Bangor Parkade can improve a city's overall retail economy by encouraging more consumer traffic in the area. Sally Bates, an officer in Bangor's Business and Economic Development Office who specializes in downtown revitalization, says local store owners do compete with the mall for business, but bank on the strength of their niche market offerings and the small-town atmosphere of downtown shopping to distinguish their business from the large chain stores. (See "The downtown rivalry," this page.)
Rod McKay, Bangor's economic development director, says the city has prioritized mall expansion in the same way South Portland does in the Maine Mall area. "What the expansion at the mall means is a more stable tax base and an increase in the number of jobs," says McKay, who points out that stores at the Bangor Parkade are projected to provide more than 250 new jobs. "Since the Bangor Mall started in 1978, we've had an increase of about 5,700 more jobs [in the mall area] ˆ that's more than 200 new jobs for each 100,000 sq. ft. of store space. The mall provides the city more than $5 million in tax revenue just on the real estate alone."
Back at Epic Sports in downtown Bangor, Brad Ryder says he and other local retailers don't feel threatened by the popularity of the mall. If the downtown can maintain the feeling of community that Ryder remembers from 30 years ago, when stores like now-defunct Dakin's Sporting Goods thrived on Central Street, local shop owners think that will be enough to generate their own loyal customers.
"My buying power is not as great as chains of 100 [stores] ˆ that's just basic economics," says Ryder. "If it's simply a matter of dollars and cents, well, you might as well go out [to the mall]. But if you're looking for service from a staff that has critical knowledge of the products we sell, that's what we have to offer. That's how we compete."
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