Hatboro - Vacant Downtown Repopulated with New Businesses
Hatboro Borough, Montgomery County, PA
Downtown Hatboro was dying. Nearly 25% of its town center district was vacant. Entire blocks were nearly empty.
There were eight large anchor stores along Main Street that had been empty for more than five years. Two weeks prior to our starting work for the Borough, five more retail stores closed.
We were initially hired to produce and collect a survey from all the businesses for Main Street Hatboro. The scope of work was to determine what people wanted in the Borough, what they needed, and what they thought we should do. It was immediately apparent that what they needed, more than the survey, was help filling the vacant stores and finding out why all these buildings were empty.
Hatboro had some very complicated obstacles to overcome.
One vacant store, a former Wendy's had been vacant for six years. The property owner had a long-term lease still in effect from Wendy's that paid a monthly income and all taxes even though the building was empty and boarded up.
Another building, The Old Mill Inn, a former upscale restaurant, had gone to foreclosure with Commerce Bank on a $1 million note. To complicate matters even further, Commerce Bank was then acquired by TD Bank, and its foreclosure transferred to their Asset Recovery Group in New England. The property was overgrown and severely damaged from back-to-back floods.
A third anchor property, an 8.5 acre Colonial-era manor house, next to one of the Borough parks and across from YMCA, sat empty and dilapidated. It had been empty for years, its elderly owner living in Philadelphia. The property had been subject to a failed state grant application to be acquired by the community to expand its adjoining park. Overgrown and crumbling, this once stately manor was now the Southern gateway to Hatboro.
Another property, a third generation, former flagship car dealership, had lost its Dodge dealership status during the recession and was now converted to a used car dealership and service center. This 14,000 sq/ft building, car lots and ancillary buildings sat on 4.5 acres on Main Street.
A former 10,000 sq/ft carpet showroom, Big Marty's, also sat empty on Main Street, its owner deceased. A key property with 35 parking spaces, this was a prime development location, its sale being handled by the heir. The list price was triple the true value for a dilapidated building, whose ceiling was collapsing and ridden with asbestos and mold.
Perhaps the greatest economic obstacle for Hatboro was its largest tax parcel, a 29-acre, 400,000 sq/ft corporate complex, the former Vicks Vapor Rub Plant. It was less than 50% occupied, in poor condition, and had just gone into foreclosure with a local bank.
There were three other contributing factors to Hatboro's decline over the decades beginning in the 70s. The first was the development of the Willow Grove Mall only a few miles away that provided high-end shopping. The second was the development of the Warminster train station shifting Hatboro as the end of the rail line and removing a large number of daily commuters from the downtown. And thirdly, significant development in neighboring communities that had been primarily rural farmland had been replaced with strip centers. Up until this point Hatboro had been the only downtown within a wide area.
Focus on Vacant Anchor Stores
Within Hatboro there were nine major anchor buildings ranging in size from 5,000 sq/ft to 10,000 sq/ft. most had been vacant for more than five years.
Station Park: 29 acre, 400,000 sq/ft industrial building complex- in foreclosure, less than 50% occupied
Wachovia Bank Building: 10,000 sq/ft - vacant six years.
Abington Bank: 5,000 sq/ft - vacant three years.
White Billet: 8,000 sq/ft former respiratory care unit - vacant 9 years
Crestbrook Farm: 8.5 acre site colonial home and outbuildings and barn along Main Street - vacant 10 years
CVS: 12,000 sq/ft retail store in Town Center District - vacant 5 years
Big Marty's Carpet Store: 10,000 sq/ft - empty five years.
Old Mill Inn/Miller's Home: 5,000 sq/ft - empty eight years.
Wendy's: 5,000 sq/ft - empty six years.
Focusing on Main Street (York Road)
We immediately began meeting with all the property owners and found that a majority of the buildings were owned by out-of-state or out-of-area owners. This condition marked a shift from Hatboro's early years where most of the commercial property owners resided in the community and had their shops on Main Street.
In meeting with one of the owners, an elderly man in his 80s and someone who owned multiple commercial properties, we found the problem was one of pride in ownership. Many of Hatboro's commercial property owners were essentially slum lords and had purchased their buildings decades ago. Since the owner did not live in the Borough the effects of his deteriorated buildings didn't have an impact on this personal life. There was much difficulty in leasing his buildings as the conditions were so severe that they only attracted the most marginal of tenants, if any at all. The community had begged him to fix up his properties to no avail.
At this time, the owner due to his age was bringing on his daughter to help manage the properties. We recommended the owner fix up the properties, not on his own behalf, but for his daughter and his grandchildren, as a legacy for their future. He was very angry at this suggestion. However, the next day he called and said he would do whatever was necessary to take care of his family. And, he did.
Slum Lord - The former slum lord has fixed up all his buildings. He painted them, repaved parking lots, renovated the interiors and even helped finance new tenants. Today, all of his properties are fully leased.
99% Commercial Occupancy Rate - Hatboro now has a 99% Commercial Occupancy Rate, a growth of 22%. Lease rates have doubled from $7 per sq/ft to $15 per sq/ft. Hundreds of new retail businesses have been opened on Main Street creating jobs and revitalizing the community. Hatboro's downtown is evolving and growing, property owners are fixing up their buildings and property values have gone up.
Hatboro now boasts over 24 eateries, a micro brewery (Crooked Eye Brewing), several new antique shops, a Vegan Wholesale Food manufacturer (LUHV Foods), a gourmet sausage store (Old World Sausage Factory), an upscale Italian bakery (Nonno's Bakery), two national retail chains (John Deere & Aaron"s Furniture) and scores of other new businesses.
8 of 9 Anchors Filled -
Big Marty's Carpet - $1.5 million project. Aaron's Furniture - We found a commercial investor for the building, then a national tenant, Aaron's Furniture, who was looking for a store location in the Hatboro.
Wachovia Bank - $3 million - Hatboro Federal Savings Corporate Offices
Jarrett Dodge - $2.2 million - John Deere Dealership
Crest Brook Farm - $1.5 million donation and endowment to Hatboro YMCA Summer Youth Camp
Wendy's - $100,000 Renovation - TNT Diner - five year lease - We were able to get the property owner to hire a commercial realtor. Then we found a restaurant owner looking to open a restaurant in Hatboro. We worked with the tenant, property owner, realtor and Borough to fit out the space.
Old Mill Inn/Miller's Home: 5,000 sq/ft - empty eight years - We had TD Bank's Asset Recovery Unit maintain the building and had it listed for sale. After showing the property to nearly 30 prospects and we were able to get a local investor to purchase the property and restore the building. It is re-opening in April 2106 as Louie's Old Mill, an upscale Italian Restaurant.