Over the past year, many businesses in the downtown Newark area have shut down or moved to other places in the surrounding area. Restaurants such as Hamilton’s on Main, Stone Balloon Ale House and 2SPizza are just a few of the many businesses to make that list.
In addition to the restaurants, retail stores and pharmacies have been shutting down, or never even making it off the ground. As a result of the company-wide initiative to shut down “underperforming locations,” Walgreens at 124 E Main St has also shut down.
This leads to questions of why many businesses have been leaving Newark’s Main Street, and if anything can be done to prevent this trend from continuing.
Lingering effects from the Main Street reconstruction and the pandemic
Some cite the pandemic as being the main driver of many places being run out of business.
“Before the start of the pandemic, Main Street was being reconstructed, so there was a big drop in traffic for businesses at that point because basically all of Main Street was torn up,” Renee Bensley, Newark’s director of planning and development, said.
With Main Street tore up and construction ongoing, customers were not eager to drive downtown to shop, eat or participate in any of the events happening in Newark at the time.
“Then, of course, as that project was moving forward and moving towards completion, COVID hit,” Bensley said. “And COVID was another point where we lost quite a few businesses on Main Street and kind of had some long-term vacancies that came with that.”
Perceived lack of on-street parking available for patrons
Before COVID, during Main Street’s reconstruction, there was minimal on-street parking, so customers had nowhere to park even if they wanted to patronize the businesses that were still running.
Now that COVID-19 has started to leave the scene, there is still a continued issue of perceived lack of parking in downtown Newark.
“In working with downtown, there’s been at least a perception that parking has been an issue, and that there’s not as much availability for local people to come downtown,” Bensley said.
To combat the notion that there is not enough parking on Main Street, the city is piloting a new parking program.
The city council recently approved a pilot for free weekends during certain periods of the year. Previously, the city offered discounted parking from mid-December to mid-January, and then again from mid-June to mid-August.
With this new program, they are looking at changing that to free weekend parking instead of discounted parking during weekdays from mid-December to mid-January. City officials believe this would entice more people to travel to Newark and patronize downtown businesses.
“We’re going to run that as a pilot from December 16 to mid-January,” Bensley said. “We’re likely going to extend that through Restaurant Week for Newark this year, and see if we can get some more foot traffic coming downtown with that.”
If the pilot program is successful, Bensley said that they would hope to make this a more permanent parking model going forward and that the program will extend into the summer months.
Increasing rent prices
Another large issue with staying in business on Main Street is increasing rent prices.
“The overhead on Main Street is crippling,” co-owner of the now-closed Hamilton’s on Main, Anthony Brooks, told Delaware Live. “Between rent, taxes and utilities, it’s killing us. It’s a great product in the wrong place.”
Although the city cannot control who buys property on Main Street, the city is setting standards for anyone who owns property there. This includes local development companies like LANG Development and Tsionias, out-of-state and international investors that stake a claim in Newark’s downtown.
“There’s kind of a balance of the more local guys versus some of the larger real estate investors that are starting to find new arcs in the city,” Bensley said. “We do set an expectation for all developments, that they have a local contact that can be reached in the event of problems and things like that at their properties.”
With many of these redevelopment projects, the lot ownership has not changed. For example, the owners of the former Super One Motel at 268 E. Main Street, Danneman Properties, did their own redevelopment. The building is now set to be replaced with a new mixed-use apartment building.
According to Bensley, rent prices for businesses and residents have continued to rise, and when lots are sold and ownership is transferred to a new landlord or development company, prices seem to rise most significantly.
“Folks who have owned property for a long period of time are seeing where they can make an investment in redeveloping it, […] and if they make the investment in redeveloping it, they can get much more out of the [property] that they already have,” Bensley said. “But when you see property transferring, you see it going at high prices, and then rental prices can rise.”
The city is also continuing their work to improve affordable housing prices as well. According to Bensley, there are multiple affordable housing developments in the works for Main Street.
The Newark Housing Authority recently had a redevelopment project approved for Main Street, and they are planning to work with New Ark United Church of Christ on Main Street, who is interested in doing a mixed-use building to address workforce housing in the downtown area.
“While we’re conscious that prices can be high on Main Street, we’re working with groups that are also interested in having more of a balance,” Bensley said.
As businesses are cycling out of Newark’s downtown skyline, there are many more that are beginning to open their doors as students return for the fall semester.
Baba’s Hot Chicken and Brews is moving into the space that was previously Freddy’s Wings and Wraps, 332 BBQ and Hill Donuts & Pancake House will replace The Stone Balloon and Ugly Dumpling will be moving into long-vacant Panera Bread location at 40 E. Main S.
“I am encouraged by the fact that a lot of our vacancies, especially a lot of our longer-term vacancies, such as the old Panera and California Tortilla locations seem to be finally being filled,” Bensley said.