Next Big Things for 2007
Will the slew of rising condos lure retail back into center city?
DOUG SMITH
Development in Charlotte's center city has never been hotter.
Condo high-rises and office towers are sprouting. The NASCAR Hall of
Fame is scheduled to arrive in 2009. And minor-league baseball looks like
a real possibility.
And finally, uptown's estimated 11,000 dwellers can envision the return
of shopping, which migrated to the suburbs during the 1960s and 1970s.
"Retail is the last piece we aspire to fill in the center
city," said Michael Smith, president of Charlotte Center City
Partners. "There are really good signs that we are at the retail
tipping point."
Real estate experts say a half dozen or more residential and mixed-use
developments might be announced in 2007. That could lead to specialty
stores, national retailers and street-level shopping.
Smith points out that two national restaurant chains -- McCormick &
Schmick's Seafood Restaurant and Ruth's Chris Steak House -- chose
locations in both uptown and SouthPark.
But where are Gap, Banana Republic, Ann Taylor Loft, Borders Books
& Music, Belk, Macy's and Dillard's?
The chains typically look for density, the potential to gain market
share, street-level visibility and convenient parking.
Uptown is a challenge for several reasons, said real estate analyst
Frank Warren of Warren & Associates. There's the high cost and limited
availability of appropriate real estate. Customers used to mall parking
lots sometimes have trouble finding and navigating uptown parking decks.
And stores have to appeal to a diverse group of consumers, including
residents, workers and visitors.
"Virtually no downtown in America except for New York or Chicago
has the residential density to support a significant retail base of stores
selling shoppers such goods as apparel and home furnishings," he
said.
As a result, Warren said, analysts "must fully understand the
employment and visitor markets" in developing a strategy.
Center City Partners says the 15 residential towers announced, started
or finished could help double the number of uptown dwellers to more than
20,000 by the end of the decade.
And that is a plus. Borders Books & Music, for example, evaluates
the potential for daytime, evening and weekend business in considering a
market.
Shopkeepers operating uptown today cater mainly to an estimated daytime
work force of 55,000, then close on weekends. Most of the stores are
buried inside the Overstreet Mall.
Smith said the uptown promotional organization has created a retail
task force to make recommendations and create a marketing program for the
center city.
Warren's firm is helping with the study, to be completed in the first
quarter.
Smith agrees that parking is an issue that must be addressed.
"We've created parking that is 95 percent privately owned and very
well masked -- it's not seen by the occasional users of the center
city," he said.
Alleviating the situation might require amending city ordinances, Smith
said.
Also, he said, he hopes the task force will help create a marketing
packet that could be supplied to retailers to shorten the review and
decision-making cycle.
Even so, Smith said, uptown dwellers shouldn't anticipate mall-size
anchor stores for two or three years at the soonest.
"Maybe they would come with a smaller store -- 30,000 square feet
or so -- to prove the market and grow with it," Smith said.
Some specialty shopping is on the immediate horizon.
The Ghazi Co. is including shop space in its 320,000- square-foot
EpiCentre retail-office-entertainment complex to open in the summer at
Trade and College streets.
Afshin Ghazi, president, said the developer is negotiating with
galleries, shoe stores and a variety of soft goods retailers, such as
clothing stores.
"We still have time before we lease some of our best space,"
he said. "We think this will be a big step in the right direction to
fill that need."
Novare Group's projects at Fifth and Church and in Third Ward, and
other condo and office towers under way, would have some street-level
retail.
Near uptown, Pappas Properties and Colonial Properties Trust are
developing 200 residential condos, an office tower, stores and restaurants
on the old Midtown Square site.
That project includes a Target and a Home Depot decor-oriented store to
open in the fall across Independence from the condos.
DEVELOPMENT
Beyond Trade and Tryon
Charlotte's development boom reaches far beyond Trade and Tryon
streets.
Throughout the Charlotte region, commercial and residential development
is surging: business parks, subdivisions, retail-residential villages,
warehouses.
In Davidson, perhaps the most growth resistant of Mecklenburg's small
towns, a 125-acre urban village is rising at Interstate 77 Exit 30.
Home builders are flocking to eastern Gaston County, an area developers
often call the final frontier as Charlotte's momentum engulfs ring
counties.
In Lancaster County, S.C., development along U.S. 521 near Sun City
Carolina Lakes' 4,400-home active adult community is expected to escalate.
The region's office supply is tightening as distributors and importers
drive demand for more warehouse space.
Townhome and condo builders are finding a market for upscale projects
selling from $350,000 to more than $1 million. And apartment developers
are scurrying to meet demand.
In Kannapolis, David Murdock's Castle & Cook is pushing forward
with development of the $1.4 billion, 350-acre North Carolina Research
Campus.
Scientists from universities across the state are expected to bring
their expertise to the public-private biotech hub and focus on products
and processes that could lead to better health.
One economist estimates the 11-county Charlotte area is gaining about
1,200 people a week.
A weakening national housing market and anticipated increases in
building costs don't appear to be serious threats.
"Real estate's time in the sun looks sure to continue for at least
another 12 months," said Colliers International in its 2007 forecast.
Novare Group is particularly high on Charlotte. The Atlanta developer
announced plans about three weeks ago to build three residential towers
and an office building in Third Ward. Doug Smith
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