News
Wall Street's Woes Come To Broad Street
By John Burton
As the shakeup on Wall Street this week involving Merrill Lynch and other significant financial players continues to shake out, the question locally remains. What will this mean for Broad Street... and Monmouth Street... and all of the Red Bank's commercial business district, and the borough's economy?
Nearly two decades ago, as the borough's downtown commercial business district labored under a high vacancy rate and a stagnant local economy, local officials and business and property owners worked to establish a Special Improvement District, or SID, and its accompanying management organization, RiverCenter, to bring about the redevelopment of the area.
An early decision was to court and attract the financial services to spearhead the borough's redevelopment efforts.
"I think they were a very substantial contributing factor toward the redevelopment of the town," said Edward J. McKenna Jr., who was Red Bank's mayor then, and a driving force for the downtown redevelopment.
The financial services sector, represented by such firms as Merrill Lynch, Smith Barney and others, "Brought a number of things to the table," McKenna recalled. That included company employees and customers who frequented downtown businesses.
Along with the bodies actually working and visiting the downtown, "I think it stepped up the image of the town, substantially," McKenna said. "It brought a sort of panache to the town, putting us in the position that all the major brokerage houses felt Red Bank was important enough that they needed to have a presence here."
As that industry began establishing a foothold in town, it laid the groundwork for other service industries to begin considering the location.
When the area started seeing some additional foot traffic of employees and customers, taking to the street for a break, "It didn't take very long for Broadway Grill [a Broad Street eatery] to say, 'My God, there is now a vitality in the daytime, there is now a luncheon business and a breakfast business in addition to the evening," observed Jay Herman, a principal with Downtown Investors, a local real estate development firm which has buildings used by these types of businesses.
And that led to other restaurants opening and other businesses in settling here creating what is now seen as a sort of textbook example of successful urban downtown redevelopment.
"The financial industry provided the office workers, the restaurants provided the 'sex appeal' to cause the retailers to start rejuvenating," Herman said, creating what he called a "symbiotic relationship" among the different types of businesses that began attracting visitors.
One of the earliest of the firms to commit to the borough is one of those capturing a lot of headlines in the national news this week: Merrill Lynch.
Merrill Lynch, acquired by Bank of America this week, has had a long history in the borough. The firm's current location, 77 Broad Street, has been home for the last 17 years. Before that, the firm used offices on Harding Road, according to Herman, whose firm owns the Broad Street building.
The firm's Broad Street location has been under reconstruction for about a year with most of its employees working in other locations. The office manager did not return calls as of Wednesday's press time to talk about the future of the site.
But Herman noted Merrill Lynch is currently spending millions on the interior renovations and has recently signed a long-term lease to occupy not only the street level, but the building's second floor offices, marking the first time the firm will be using the entirety of the what is now the Merrill Lynch Building, Herman said.
The financial services sector takes up a fair amount of the total space for the district. Nancy Adams, RiverCenter's executive director, could not provide the exact percentage the sector holds, but did acknowledge in appears to be more than it other comparable urban downtowns elsewhere in the state.
And for some, they may be occupying too much of it. In the past the Borough Council adopted an ordinance, urged by RiverCenter, that would restrict any additional businesses of that type from using street-level space on Broad Street, the borough's main business thoroughfare.
Now as that industry attempts to sort out the turmoil that has engulfed it in the last two weeks, any ripple effects for Red Bank will have to remain to be seen.
Adams declined to comment but Mayor Pasquale Menna offered his worries. "It's of concern to us because we are a regional center, not just for commerce but for the financial services."
And for the future, Menna offered an ominous prediction following this week's economic tribulations: "Frankly, as far as I'm concerned," he said, "it's the beginning, not the end." He said, while a number of the firms located here have offered their assurances, "I think it's going to be a difficult change for some of these brokerage houses."
But there is hope, all insisted, for the borough's future. "I think, from the borough's perspective, we're going to be fine," McKenna said.
Menna added to that, but stressed the business district should emphasize other attractions, to try and carry the load, and to remain competitive with other communities seeking to draw expendable income.
Menna said RiverCenter and the borough should play up what he called "cultural tourism" - the theaters, art galleries and other venues. "We need people in town and we need people in to spend money," he said. Menna and McKenna had said on numerous, previous occasions that a thriving business community is essential to the economic health for the entire municipality.
"I think even if we are a thriving center we have to look to diversification in terms of what we have to offer," Menna said.
That has always been the key, according to Herman. The downtown has maintained a five-component mix, with each playing a significant and interrelated role and attracting different people: along with the financial sector, there have been the restaurants; traditional retail; more recently with the emphasis on the state initiative for "smart growth," a growing residential component; and the recreational, with the night spots, theaters and the other cultural attractions alluded to by Menna.
"All of them together help one another," Herman said.
In the end the players may change, maybe with the financial sector playing a lesser role than in the past. But, "I think the image of the borough is still so strong and the vitality of the business community so strong," McKenna assessed, "regardless of which cottage industry, or whatever business may leave - although it may take some time - they will be replaced."
