1) Apartment/Condos are fully rented Downtown. There is a solid population of young working adults. The vacancy rate (as of Dec 2012 couldn't find any updated data) is less that 5%.
http://articles.courant.com/2012-12...ent-vacancy-studios-and-one-bedrooms-downtown
2) The BOA Bulding is being repurposed for exactly what you suggested. They are expecting their first tenants by February of 2014.
http://courantblogs.com/ct-real-est...ants-expected-at-main-street-tower-in-a-year/
3) The lack of a grocery store is easiestly my, and my neighbors, biggest complaint living downtown. The market at 21 was a massive failure due to being boutique-like and overpriced, in addition to lacking a demand for expensive groceries. With the expected addition of 1,000 more apartment units I'd expect a grocery store to have plans to move in by the end of 2014, but that is completely a gut feeling and not based on anything I have heard.
4) Yes! Plop it at the proposed site on Main St and call it a day. I was all for the placement at the old paper building on Front St, but it looks like Hooker Brewery is exploring moving there, which I would much prefer.