Can Main Streets survive in today's market.

The tug of war between downtown central business districts and isolated mails and corporate parks is nowhere more apparent than in Westchester. Here, vacancy rates in the corporate office parks hover in the over 30 percent range at the same time several new malls are under construction and renovation in central business districts is underway.

Offices over stores on main streets can't be given away and yet businesses in the 5,000 to 25,000 square-foot range are expanding. Many of these businesses were begun when the corporate giants of America laid off thousands of Westchester workers who then began businesses of their own.

Other expansion is taking place because the space next door becomes available and small businesses which are a little bit crowded are afraid not to take it, believing they will grow out of their own spaces in the next year or two.

More and pop retailers usually remain where they are along the shopping streets, where rents are lower, and hope a giant mid-west competitor doesn't come to town. Local pharmacies quake when CVS eyes a store nearby, but even CVS shivers as Price Clubs, K-Marts and PayLess drugstores target its market.

Most often, little local guys watch the big out-of-towners move into the malls, taking profit margins with them. Recently several local Arkansas drugstores won a law suit against Walmart which, they charged, priced items under their cost.

Noreen Preston, Economic Development Specialist with the Westchester County Office of Commerce and Economic Development said, "If we can keep the businesses here and the people here during the day, we can keep those small businesses. There is no doubt about it, there is very severe competition from these cut-rate places, but there is a niche for a small neighborhood store that offers services rather than large packages."

While the big players will knock out a certain percentage, agreed Ronald B. Bruder, president of the Brookhill Group, which= manages and invests in shopping centers, he says there is always the customer who wants to be recognized. "You're not going to get that from a Walmart. So you can shrink the retailers but a few will survive."

Michael H. Siegel, executive director Edward S. Gordon Westchester Connecticut office said, "If we look back years ago, the neighborhood stores were there to service the neighborhood. People would know them by name. Contrast that with the situation at the mall - employees turn over, there is no personalized service. At smaller stores, customers get to know you.

Retail rents in most malls are on the high end of the mid 20's and low 30's, says Siegel, but significantly less outside the malls.

Siegel believes the character of the shopper in a mall is different than that of the street shopper. A store has to be set up a certain way to be in a mall, he noted, and many stores just can't walk in from a main street location.

"I think the main streets are going to attract a new wave," Siegel believes. "There are always entrepreneurs and businesses starting. Rents will decline and will attract new upstart stores."

In Stamford, Connecticut, the Town Center mall actually had a strong effect on the shopping area around Atlantic and Bedford Street. "But if you look at Broad Street, further away, a lot of the retail has gone out," Siegel observed.

There has been some negotiation to make the former Bloomingdales in Stamford into a multi-retail location, but in the meantime, everything around there is very depressed.

"If you look at the contrast between retail and office at Greenwich Avenue or Downtown White Plains," observed Siegel, "the vibrancy has swung to retail. The high end retail is clearly Greenwich and White Plains. Unfortunately, New Rochelle hasn't gotten the benefit. The new revitalized mall is not going to be high-end. It's not what the demographics call for."

New Rochelle Turnaround

New Rochelle just lost a bidding war for UNICEF, but will get a former Macy's mall renovated out of bankruptcy with a Bradlee's and 14-screen movie theater and more. A Price Club Warehouse is going to a former 7-UP site and Home Depot, which has made a deposit on urban renewal land on the other side of town, will soon follow. Taco Bell just broke ground, right across from a Pizza Hut.

Its Main Street boasts a renovated Lillian Vernon headquarters, but lost the outlet shop to Central Avenue - a North/South road that runs from White Plains through Yonkers and is a shoppers paradise, with Caldors, Bradlees, Service Merchandise, Staples, Burlington Coat, Filene's Basement, Barnes and Noble and much, much more.

Towns like New Rochelle have lost business to Central Avenue for years and are hoping to cash in with these new large power centers. But there are still plenty of empty shops along Main Street, where eight people were shot outside a dance club this summer. Two movie theaters are out for good and "for rent" signs adorn many stores, as well as the upper story office space.

Gerald T. Rhine, who handles commercial space in Westchester and Fairfield counties for Abrams Benisch Riker, represents 145 Huguenot. "New Rochelle is trying very hard to make a comeback," he said. His building is on a major intersection with North Avenue and only two blocks from the train station.

"While people think of the suburbs as being in a sleepy area, being in a downtown environment is stimulating," Rhine observed.

Huguenot is a one-way street running parallel to Main Street, which goes in the opposite direction, but it is not a shopping street and is not in what Rhine deems the congestion of New Rochelle.

Fred Knapp, a real estate attorney who has space in a Huguenot building across the street, said there are vacancies in every structure. "A lot of users have too much space and if there was one chance in a hundred to consolidate and move out, they did," he complained.

Like others in New Rochelle, Knapp is disappointed UNICEF passed them by. "They busted their chops to get their bid together," he said of the local government. "[UNICEF] got a better deal out of New York at New Rochelle's expense. I don't think they ever intended to come here."

Mayor Timothy C. Idoni is still upbeat about the city and feels the push to bring in a UNICEF campus energized the town fathers. "We're ready to redo our downtown area and ready to market it to the private sector," he said. "Our development possibilities were non-existent two years ago and a lot of other developers have come to us because of what they have read about UNICEF."

A $100,000 study is going on to revitalize Main Street, while another plan was created for Huguenot Street. "Eventually we will put together a master plan," said Idoni. Additionally, although a residential plan ten years in the making for David's Island was turned down earlier this year, the island is undergoing a coastal management plan in preparation for another shot at development.

White Plains Malls Gain

John D. Goodkind, senior vice president and manager of Newmark Real Estate's Westchester/Connecticut office, said IBM is having a large impact on the market because they put close to 1 million square-feet on the market and may put on more.

"It puts a huge drag on everything else both commercially and residentially and retail," he explained. "A lot of IBM employees used to flood those buildings and are not there to go shopping every day. This affects the retailers."

With nearly a 35 vacancy in White Plains office space, it makes a dramatic effect in the numbers of people walking the street, agrees Donald B. Rosen, an associate broker with the White Plains based Kempnet Corporation. Retail is running at 7 to 8 percent vacancy, he said, not bad for the county seat.

Rosen explained a 2,000 square-foot store pays about $20 a foot or $40,000 a year on Mamaroneck Avenue, with stores on the perpendicular Main Street fetching closer to $10.

If the rule of thumb for the rent factor is 10 percent of rent, the Mamaroneck Avenue store has to do $400,000 a year or $200 a foot to survive. "That is a tall order for a normal retailer in White Plains," he said. "Food you can do it with, but I don't know if you can do it running regular merchandise."

Rosen believes certain food shops and specialty retailers such as the Jewish Quarter and Sam Ash will be survivors in the Downtown core. "The others will get squeezed out," he said.

The Mamaroneck Avenue shopping strip, agrees Siegel, is not going to draw shoppers from outside the town. "You have food stores and low-end clothing," he said. "The other difficulty is that it's more impulse shopping because of the parking. They wouldn't say "I'm going to spend the day' and walk Mamaroneok Avenue."

These experts agree White Plains is making a comeback because at least two mega shopping centers are coming into the core. But how these malls will affect the foot traffic on Mamaroneck Avenue's small retailers is yet to be seen.

The high end Nordstroms is heading to a renovated space on the site of the old B. Altmans and connected to Neiman Marcus. This Westchester Mall formerly called the Fashion Mall and still referred to that by area brokers-has rents in the $70 to $100 a foot range. It is targeting high end retailers and will be competing with nearby Bloomingdales and Saks.

The Saks store has had a few rocky years of preparing for a mall renovation by the Conroy Company, which acquired NYNEX property nearby in June.

Bloomie's may be lured across the street by ion Halperin to a former Nestles corporate headquarters and have its own boxey store turned into a multi-plex cinema and grocery - a better use for its underutilized parking lot and multi-level land tucked into the side of a hill.

Closer to the center of town, the former Alexanders is being turned into a power center known as Westchester Pavilion, a big box bag 'em up spot with Toys 'R Us, Border Books, Office Max, Educational Warehouse and others.

In the office sector, William V. Cuddy, Jr., senior vice president of Rostenberg-Doern Company INC., said there has been a strong pace of leasing from small to midsize companies in Downtown White Plains. "Downtown White Plains is still a great place to do business. It is the county seat. Law firms are expanding. It is the transportation hub of the county."

Goodkind, who just signed Dannon Yogurt coming out of the NYNEX headquarters to 37,000 square-feet at his Christiania Building in Tarrytown, says he has no doubt that these buildings might be refilled in the next few years.

'There is enough business coming out of Manhattan. Not every tenant is used to going to 287 and out of the Central Business District," he said.