on Broad St. building
Department store will not be renewing lease
on Broad St. building
By GLORIA STRAVELLI
Staff Writer
This holiday shopping season will be the last one in Red Bank for The Bon-Ton. The department store’s parent company announced earlier this week it will close the store in January, just three years after it opened on Broad Street.
The Bon-Ton will continue to offer a full merchandise assortment through the holiday season, store officials said.
James H. Baireuther, vice chairman and administrative officer of The Bon-Ton Stores Inc., York, Pa., said the decision to close the store was made following negotiations on renewing the store’s lease, which expires Jan. 31. The Bon-Ton opened on Broad Street Sept. 1, 1999.
He said new lease terms "would have substantially escalated occupancy costs resulting in an unprofitable store."
But a spokesman for the property’s management company said The Bon-Ton was seeking a no-increase lease renewal at rates well below fair market value for the property.
The property is being marketed at $22 per square foot for street level and $12 for the second floor.
Some 80 store personnel will be affected and will be offered other opportunities with the chain as well as severance benefits.
The two-story property with its own parking lot at 113-121 Broad St. is owned by a general partnership. Cronheim Manage-ment Services manages the property, which is being marketed by David Cronheim Co., Chatham, a commercial and residential property management company.
According to a spokesman for David Cronheim Co., the 36,505-square-foot property has been on the commercial rental market for a couple of weeks.
Peter Wisniewski, executive vice president of Cronheim, said it doesn’t look like another department store will become the new tenant.
"More than likely it will be one or two national retailers who will share the space," he said. "We are looking for a single or multiple tenants, but more than likely, we won’t get a single tenant. We will probably get one or two on the first floor and another on the second floor."
Wisniewski said attracting the most likely single tenant for the building — another department store — was proving elusive, even though the property includes a private parking lot.
Upscale retailers that might be attracted to the Red Bank’s demographics require a somewhat larger space, he said, adding that his firm had reached out to Saks Fifth Avenue, which did not express an interest in the location.
In addition, he said, national retailers are somewhat put off by a Jersey Shore demographic area, which is one-third under water.
"They have to be very creative to understand," he noted. "A lot of retailers when they study a location do a demographic study using concentric circles. In Red Bank, three-quarters of the demographics are great, but the other one-quarter sits in the ocean."
Wisniewski mentioned bookseller Barnes & Noble as another prospect and said Cronheim is still reaching out to prospects.
Mary Kerr, vice president of communications for The Bon-Ton Stores, said the Red Bank store was "marginally profitable," noting that the company was in negotiation to renew the lease, which it assumed when former tenant Steinbach went bankrupt. Kerr said there are no immediate plans to close any of the chain’s 72 other locations in the Northeast, three in New Jersey.
Founded in 1898, The Bon-Ton Stores reported losses of $1.6 million for the second quarter, or 10 cents per share, an improvement over the minus 21 cents per share, or $3.1 million, earnings loss reported for the second quarter of 2001.
Second-quarter sales for the company, which operates 72 stores in the Northeast, three in New Jersey, were $153.9 million, compared with $150.9 million for the comparable period last year.
Baireuther acknowledged sales were lower than expected for the back-to-school season.
"We view it as a fantastic opportunity for the downtown to have some fresh retailers who are really interested in being community partners, participating in events and marketing, and helping to bring that end of Broad Street alive," Mary Mann, Red Bank RiverCenter executive director, said.
RiverCenter, she said, has provided Cronheim with demographics that show the average Monmouth County per capita household income is around $104,000 and by passing along marketing materials for potential tenants.
She also said the downtown alliance will promote the property at the upcoming International Council of Shopping Centers "Idea Exchange" held in New York in December.
According to Mann, RiverCenter is not lobbying for another department-store tenant because that sector has been hurt by competition with big-box stores, which are definitely not welcome in town since they siphon business away from small retailers.