Yale Leads New Haven's Renaissance

Grocer Chung Cho rearranges a display of fresh fruit outside his store on Broadway in New Haven, Conn., Wednesday, June 7, 2006. Cho's shop, "Gourmet Heaven," was one of the first stores to open in what was a formerly run down area of New Haven adjacent to the Yale University campus.
AP Photo
Once decrepit and even dangerous, the shops outside Yale's historic Old Campus now bustle with energy, offering the latest in summer fashion, music and gourmet food — everything a student or young professional might want downtown.

In fact, Yale has designed the district to be precisely that. Armed with focus groups, student surveys and a growing list of retail properties, Yale is building the downtown of its dreams: A gourmet market here. J. Crew there. Barnes & Noble up the street and a Manhattan-style boutique around corner.

After years of buying and remodeling, Yale now owns dozens of storefronts and is New Haven's largest retail landlord. Tenants are hand-picked and the details are closely managed, from requiring that shops stay open until at least 9 p.m. to insisting fresh flowers be displayed on the sidewalk.

"New Haven is undergoing a renaissance, and the university is an important part of it," Yale's Vice President and Director of New Haven and State Affairs Bruce Alexander told CBSNews.com's Lloyd de Vries.

The strategy is rare in academia, where real estate is typically used to expand campuses or build endowments.

"We wanted to run our real estate without regard to financial returns. It's strictly social returns," said Alexander, a developer who helped rebuild Baltimore's harbor and Boston's Faneuil Hall before being lured out of retirement by Yale.

University scouts recruit across the Northeast for the names students demand. When selecting its newest clothing retailer, Yale had a list of brand-name musts: Lacoste, Juicy Couture, Citizens of Humanity, Joe's Jeans.

Prospective tenants who don't make the grade, such as a restaurant with so-so Italian food, are turned away.

Nancy Buchanan, president of the Association of University Real Estate Officials, said members have studied Yale's strategy but it remains uncommon.

"More and more educational institutions and hospitals are the major employers and need to take a role which is perhaps new to them, which is a civic leadership role," Alexander said.

Most schools don't have Yale's $15 billion endowment and can't invest millions without immediate financial return.

Retail is still mostly used to supplement housing or add campus flavor, she said, not to remake downtowns.

"Their economic interest is larger than any one property because they own all the properties," said Mayor John DeStefano, who encouraged Yale's downtown investment. "If you owned it, you'd care about one thing — leasing the space — and less about having a concept."

The concept began in the early 1990s, when New Haven renovated sidewalks in front of Yale property on a once-busy retail strip north of campus. Lighting, parking and remodeling followed and the university began buying more lots along the block.