Paramus: a store for every 10 residents

Malls, stores in N.J. suburb make about $5 billion a year

December 25, 2006|By New York Times News Service

PARAMUS, N.J. -- It is fitting that the first store drivers see as they head south on Route 17 and enter town is a Stop & Shop. After all, Paramus is one of the nation's strongest shopping magnets, generating roughly $5 billion a year in retail sales, an amount about equal to the gross domestic product of Cambodia, Nicaragua or the sultanate of Brunei.

There are larger malls and there are fancier malls elsewhere, but few places rival the sheer concentration of stores in this otherwise unremarkable suburb 18 miles northwest of Times Square.

In this densely populated state, Paramus has more parking spots than people. Four major malls and dozens of smaller shopping centers are packed into 10 square miles. Paramus is home to Garden State Plaza, New Jersey's largest mall, whose 2 million square feet of stores attract 20 million shoppers a year. The town has 27,000 residents, and about 2,700 stores. There is a Saks Fifth Avenue and a Sears; and, at least two dozen chains, including Borders, Old Navy and Macy's, have more than one outlet within Paramus' boundaries.

It is a Faustian bargain that brings 200,000 cars a day into town during December, turning the roads into virtual parking lots but also keeping property tax rates in Paramus relatively low - $1.55 per $100 of assessed value, compared with $3.88 in Maywood, the next town over.

And there is no sign of a letup: Two of the four malls are spending $100 million each to spruce themselves up, big-box stores are sprouting where smaller strip malls and bygone department stores once sat, and traffic seems to get worse each year.

Residents have groaned about the traffic for years but largely put up with it because of how much money visitors spent in the town's stores. They also won reprieves on Sundays, when the town prohibits sales of practically everything, making Paramus a virtual ghost town.

Overall, analysts expect retail sales this season to be up about 4 percent over last year; owners of the Paramus malls would not provide specific figures about how they are doing. Yet, while nearly all the available construction space in Paramus has been exhausted, developers keep adding movie theaters and restaurants in hopes of getting consumers to spend more during each visit.

Among the attractions is that New Jersey has a lower sales tax than New York City (7 percent compared with 8.375 percent) and none on clothing and shoes. And Paramus sits in wealthy Bergen County, where the average household income is $71,000 a year, 41st in the nation for counties with more than 65,000 residents.

"Other than New York and Beverly Hills, where else do people go to shop as their profession? Paramus," said Marshal Cohen, a retail industry analyst at NPD Group, a market research firm. "You can go there on a Wednesday afternoon and still see people shopping.

"For the last 20 years, the industry has felt that the area was saturated," Cohen added, `'but to everyone's amazement, it still grows and attracts people from all over."

Though a headache for residents, traffic has a silver lining for retailers: If cars crawl along at half the 50 mile-an-hour speed limit, potential customers have more time to size up the stores and are more likely to stop someplace they would have otherwise passed.

The mayor, James J. Tedesco III, considers the malls "a double-edged sword."

"For the benefit of almost 50 percent of the taxes being paid for by the business community, we have to put up with congestion," Tedesco said. `'You can say during the holiday season, the traffic is exasperating. It's a constant battle."

The battle began in the 1950s, when the Bergen Mall, which was recently renamed Bergen Town Center, Town Center and Garden State Plaza were built. The suburbs throughout northern New Jersey were growing, and the main roads that crisscross Paramus and head in every direction were a retailer's dream.

But the extra traffic the malls generated quickly swamped the roads. They have been widened repeatedly to accommodate the cars, with recent improvements to off-ramps and intersections, but it never seems to be enough to please those who live nearby.

And the building continues. The Westfield Group, which manages Garden State Plaza, is expected to finish a $100 million renovation, adding shops and entertainment options, early next year; Vornado, which bought Bergen Town Center last year for $146 million, is just starting a $100 million overhaul of its own.

Already, Paramus has 320 stores with more than $1 million in annual sales each, second in the country only to the 10021 ZIP code on Manhattan's East Side. The vacancy rate for stores is 3 percent, several percentage points below the rate for similar real estate elsewhere. Some properties are filled even before the previous tenants move out.

Chuck Lanyard, a commercial real estate broker at the Goldstein Group in Glen Rock, put it this way: `'Paramus is a town with a waiting list."

One sign of the malls' success is the booming valet services in their parking lots. Pro Valet Event Parking, which has 50 spots near the Papa Razzi restaurant in the Garden State Plaza, doubled its prices to $10 this holiday season.

While the traffic is overwhelming for some in Paramus, the commercial frenzy has its rewards - chiefly, businesses that pick up much of the tax burden. That has created a measure of jealousy across the border in Maywood.

A half-century ago, developers wanted to put a mall in Maywood and the parking lots in Paramus. Eager to preserve their town's character, Maywood residents rejected the proposal and instead got the parking lots, which generate little tax revenue. The town also has to grapple with the occasional stolen car, and for a fee, sewage from Bergen Town Center.

"We have gotten the short end of the stick for 50 years," said Thomas H. Richards, mayor of Maywood

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