By LYNETTE HAALAND
Rochester Business Journal

The city of Rochester is trying to create viable inner-city markets by helping attract new businesses and expand existing ones.

One key strategy is to crunch demographic numbers to show the opportunities city markets offer.

"Everything boils down to the numbers. You show potential developers numbers (and) that is certain to get their attention," says Fashun Ku, commissioner of economic development.

Ku's numbers show Rochester's inner-city neighborhoods have more concentrated purchasing power than suburbs such as Pittsford.

"There are a lot of inner-city areas that are not being serviced and they have greater density than the suburbs," Ku says. They have a lower average income, but the density makes up for that.

Sector 3 is one example. It is the largest of 10 city sectors and is bordered by Driving Park and West avenues, the Genesee River and the city limits.

Sector 3 and Pittsford have nearly the same population. Sector 3 has 28,169 residents in its five square miles and Pittsford has 27,272 in its 24 square miles.

Annual consumer spending per square mile, however, is considerably higher in Sector 3, $76 million to $21 million in Pittsford.

Ku uses these types of numbers to help attract food, retail and service-related businesses.

Hollywood Video Store is one example. The national video chain opened its first store in the Rochester market in Sector 3. It generally develops in the suburbs first, then moves into the cities-but not this time, says David Dworkin, partner in LLD Enterprises.

"The city was not on (Hollywood's) radar screen," Dworkin says.

He used the demographic information to help persuade Hollywood Video to locate in the city. The chain's second store also is located in the city on Monroe Avenue.

LLD built the store for Hollywood Video in the late 1990s in its Maplewood Plaza shopping center at the intersection of Driving Park and Lake avenues.

The 10-year-old Maplewood Plaza, with 26,000 square feet, also is home to RentWay Inc., Pinnacle Insurance Agency Inc. and a vacant Eckerd's Drug Store that is in the final stages of being subleased to a retailer.

"When we build or redevelop property, we look at the demographics and the buying ability of area residents. It also talks about the specific goods and services they tend to buy," Dworkin says.

He also serves as president of the Falls Business District, stretching from Lake and Driving Park to the edge of the High Falls District.

Though there is more buying power in the inner-city area, there are fewer businesses located there. Sector 3 has 1,048 businesses compared with 1,315 in Pittsford.

There are more retail stores but fewer service, financial and real estate businesses in Sector 3 compared with Pittsford.

Breaking down the populations of the two areas shows more about the buying power. There are nearly five times as many people per square mile in Sector 3 than there are in Pittsford.

There are roughly 2,000 more households in Sector 3-11,459 compared with 9,481 in Pittsford.

Sector 3 is more racially diverse with roughly one-third of the population African-American and Hispanic, compared to less than 5 percent in Pittsford.

The numbers also show a concentration of eligible workers.

Inner-city businesses help create viable neighborhoods because they give residents access to potential job opportunities. That is important because the city has more poverty, Ku says.

Over the last two years private and public economic-development efforts in Sector 3 have helped retain nearly 1,000 jobs and helped create several hundred. Leaders of some 35 companies have announced plans to spend roughly $12 million on expansion and capital improvement projects in Sector 3: $10 million of private investment, $1 million in city investment and $1 million in non-city public investment. The city's cash comes mainly from its low-cost loan program.

Genesee Valley Metal Finishing Co. started making $300,000 in capital improvements last year. Plans have slowed somewhat due to the economy, but the metal-coating firm, with 15 employees, has started purchasing new equipment, says Peter Dresser, second-generation owner of the 50-year-old company.

Facade enhancements are part of the upgrade, Dresser says.

"(The facade improvements) are just to generate a good neighborhood appearance. It does not affect business. We're just being good citizens," he says.

Dresser wants to make the facade improvements to go along with the restoration of the rest of the High Falls area in the last five years. His site is located a couple of blocks north of Frontier Field at 244 Verona St.

The business owner believes crime is down partly because the neighborhood has improved. In addition, a mounted police patrol station is located next to the manufacturer.

"Employees probably have fewer broken windows to replace in their cars (compared with) 10 years ago when I first got here. Now (break-ins) only happen occasionally," Dresser says.

Most of Genesee Valley's employees live in the neighborhood and in general are not fearful of crime.

Hiring people within walking distance is important for some company leaders, Ku says.

"First, companies feel good about the available quality work force right there and second, (those workers) will benefit the neighborhood they live in," he says.

Empire Precision Plastics Inc. makes it a point to hire neighborhood employees. Roughly half of its 50-person staff are city residents.

"We feel it is good for the community in general if (employees) work where they live," said Kathy Elli, controller of Empire Precision.

Like Genesee Valley Metal, Empire Precision is located a couple of blocks north of Frontier Field at 460 Oak St.

"We feel if we're located here we might as well give back to the community that is here," Elli says.

Shadel Co. Inc. is another company that employs residents of Sector 3.

"We hire 100 percent from the neighborhood and all are Hispanic," says Shaw Hakim, president.

Shadel and its 37 employees refurbish, test and assemble electrical and mechanical parts. If the company lands an upcoming job from Kodak, it expects to increase the staff by 30.

Shadel moved 18 months ago from Lyell Avenue. It invested $1.5 million to purchase a building close to Sector 3's border at Driving Park and La Grange avenues.

Hakim plans to apply for facade-improvement aid soon.

"Appearance is an important issue; when (a neighborhood) looks good, people feel comfortable," Ku says.

lhaaland@rbj.net / 716-546-8303

11/09/01

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