Commercial sector shows signs of life

A new grocery in Crozet. A proposed department store and hotel at Hollymead Town Center. Activity on a pair of long-planned developments in northern Albemarle County.

Boosted by improving consumer confidence and strengthening corporate results, Central Virginia’s stalled commercial and retail sectors are showing signs of life, especially along the U.S. 29 corridor, said commercial real estate expert Ivo Romenesko of the Appraisal Group Inc.

“[U.S. 29] is really our Main Street,” Romenesko said. “Eighty percent of our retail is on Route 29.”

But challenges remain. Vacant storefronts and empty commercial space persist across the area, and shopping center owners are offering incentives to attract businesses.

“Spots that are traditionally hard to fill are vacant now,” Romenesko said. “We have not had much turnover in [large] retail tenants, so that is a good thing.”

Another key for continued improvement is for developers to find a variety of tenants, Romenesko said.

“The number of purposes goes up when you have a variety of shops,” Romenesko said. He said a good example of this is Barracks Road Shopping Center, which offers everything from a grocery to coffee shops to clothing boutiques.

Bill Kehoe, commerce professor at the University of Virginia’s McIntire School of Commerce, said consumer spending is key to economic development and getting commercial and retail development back on track.

“Consumers must feel positive in how the economy is going to unfold,” Kehoe said. “People also have to be able to acquire money, and banks need to open up and have the ability to loan money.”

While the economy shows signs of improvement, several commercial projects are on track to begin.

The first phase of the $28 million Northtown Center, on U.S. 29 across from Lowe’s, is set to begin construction in the next eight weeks, developer Wendell Wood said.

Confirmed tenants include a 120-room Country Inns & Suites and a StellarOne bank, Wood said. A national chain restaurant, which Wood said he could not name, is awaiting final approval from the county on its signage before announcing its arrival.

He hopes to have the first building in the development, the bank, open early next year.

An office building in the development is almost 30 percent filled, Wood said. The problem has been the two-year timeframe of getting approvals from the county.

“We’re very lucky indeed to be building in this economy,” Wood said. “We’ve had confirmed tenants in the office space and lost them because we couldn’t get them in the building.”

Wood’s company, United Land Corp., also began construction last month on the second building in the Boulders Office Complex. It is the second phase that will lead to five privately owned office buildings in the Rivanna Station military complex by 2014, Wood said.

The first building, which opened in April, already has tenants and is expected to get more in the coming months.

Still, economic officials say it will be a while before the area is out of the economic hole caused by the nation’s recession.

Carolyn Betts, a commercial real estate agent with Downer and Associates, is working to sell tenant space at the $9 million Rivanna Plaza project, a commercial development on U.S. 29 between Kegler’s Lanes Bowling and Schewels Furniture.

The site’s already signed on Dunkin’ Donuts and The Learning Experience, a day-care facility with space for 200 children, Betts said. Backers are hoping to attract tenants such as a walk-in clinic or a pediatrician’s office so parents could enjoy one-stop shopping, Betts said.

“There is a big need for day care in our area,” Betts said. “This is a prime location for a day-care facility.”

Rivanna Plaza is unique because it is offering either to sell or lease space in the development, Betts said. This relatively new concept gives business owners more long-term options

“We found there has been a big need and request for this type of opportunity,” Betts said. “They want to own their space instead of renting. This will allow someone to be a part of a successful development but own their space.”

Construction on two of the three buildings in the project is slated to begin in July and open by January, Betts said. But the developers still need clients to fill the third building before construction can begin, Betts said.

“Deals are out there to be made,” Betts said. “Part of the problem in this market is [business people] don’t know about them.”

Farther north at Hollymead Town Center, final approval has been given to Kohl’s Corp. to start construction on a department store.

The store will be located on 15.3 acres across from the Starbucks at Hollymead Town Center.

Although officials at Octagon Partnership, the local group working on the project, said construction was “imminent,” Kohl’s officials have not returned phone calls for comment.

Albemarle officials are still working on plans submitted to build a 77-bed Comfort Inn & Suites hotel at Hollymead Town Center. It’s slated to be built behind Target and across from CVS Pharmacy.

Not all commercial development projects in the northern end of the county are up and running.

Chuck Rotgin, one of the developers at North Pointe, said finding tenants for the commercial aspect of the project has been difficult. Work has started on the residential end of the project, located on U.S. 29 across from the UVa Research Park.

North Pointe is a 900-unit residential community that will also have commercial space.

“My hope is we are scraping at the bottom,” Rotgin said. “Commercial has always lagged behind residential in economic turndown by about 18 months, so we’re in the middle of that now. It’s not just something you can build for one or two tenants.”

Rotgin is not giving up anytime soon, though, as he waited for more than 20 years to bring a grocery store to the Crozet area. Earlier this month, Harris Teeter opened in the Blue Ridge Commons shopping center on U.S. 250 near Crozet.