The latest from The Ticker blog
- Tech’s College of Science Magazine features STEM field initiatives
- Appalachian Power donates to Ferrum College water quality research
- Wells Fargo Parade in Roanoke features stagecoach, mayor
- More from The Ticker business blog
Explore the City Market Building
- Meet the market: Get a first look at the dazzling renovations with 360-degree photos of each floor, and hear vendors’ tell their stories of how they made it to the market building.
- Fridge Magnet blog:
Glenna Johannessen’s downtown Roanoke store is just barely hanging on.
Seeds of Light, a fixture in the market area for more than 15 years, lost its prime storefront at the Roanoke City Market Building when it was closed for extensive renovations a year ago. The store moved to Market Street, tucked away near Salem Avenue and on the fringe of the market building’s construction zone.
“I just couldn’t believe what happened when the building closed,” Johannessen said. Her sales dropped more than 50 percent. Customers thought that the store, which sells beads, candles and clothing, had closed with the building.
Downtown retailers feed off business at the market building, a destination for tourists and for office workers looking for a quick lunch. Many downtown retailers said the combination of the recession, the closure of the building and near-constant construction from various projects in the market area have hurt sales the past year.
They are eagerly awaiting the building’s reopening with expectations that it will bring more people downtown and into their stores. But they also have raised concerns that none of the retail space in the building has been leased yet, and that the leasing rates are too high.
“We want it to open so badly,” Johannessen said.
A tough year
The closing of the market building last September displaced several retailers, Seeds of Light among them.
Former market building stores Gone CoCo, a women’s clothing shop, and Azar Jewelry now share a space together on Market Street, but it’s been a tough year, both said.
Easter Moses, who with his wife, Susan, owns Gone CoCo, said they’ve seen a “significant difference in sales.” He attributes it to the recession, the market building closure and the relocation of the store.
But the closure affected businesses outside the market building as well.
Pauline Wood has owned Shades of Color, a women’s clothing and accessory store, on the market for 26 years, and she said the past year has been one of the worst. Her sales are down as much as 80 percent some days, she said.
“There’s nothing in terms of business,” she said. “This year we’re just totally dead.”
Sean Luther, president of Downtown Roanoke Inc., said he was surprised by how much of an impact the market building’s closing had on downtown businesses. He’d been in Roanoke for only a year when the building closed.
“It absolutely blew me away, the decrease in foot traffic,” he said.
The organization used Facebook, Twitter and newspaper and television advertisements to promote lunch specials and downtown businesses in general.
But office workers looking for quick lunches didn’t have time to sit down and eat at a restaurant, and, to save money during the recession, packed lunches, Luther said.
Teal Batson, owner of On the Rise bakery on Market Street, said she pumped up her employees to make a good impression on the new customers she expected after the market building closed.
She was surprised that those people never came.
“We didn’t have the increase that we thought that we would,” she said.
Her sales didn’t suffer, she said, because her loyal customers kept coming.
She and several other downtown business owners said the closure of the market building was only part of the problem.
The fencing and construction around the building were a deterrent, as was recent work by Roanoke Gas Co. to replace gas lines downtown. Just as those projects were finishing up, Center in the Square began its $27 million renovation, fencing off a section of parking and the farmers market.
“There were still people who envisioned downtown as a giant pit of construction,” Luther said.
That’s what kept shopper Mary Ostrander out of downtown, she said recently as she browsed Seeds of Light.
“I just saw that the building and the roads were all blocked off, and it looked kind of hazardous to walk around,” the Roanoke woman said.
Todd Lancaster, owner of the downtown Awful Arthur’s, said the restaurant and bar saw an influx of diners in the month after the market building closed. But the additional business quickly evaporated, he said, and sales didn’t pick up again until the construction outside the market building was gone.
The restaurant withstood the building of the Taubman Museum of Art and the construction outside the market building, and now Lancaster is bracing for the Center in the Square renovations.
“I just look forward to when it’s all done,” he said. “None of us are making money like we used to.”
A lease rate debate
Of concern to some downtown business owners is that none of the eight available retail spaces have been leased.
The building has 14 retail storefronts, but the restaurants have leased five for dining areas, and another will house an office for the on-site manager. There are also four kiosks in the center of the building, one of which has been leased month-to-month to a vendor selling smoked meats, jellies, honey and more.
Some downtown retailers, such as Johannessen and Moses, also worry that the lease rates at the building are too high.
Leases for retail space in the building range from $36 to $42 per square foot, depending on location. The rates include costs for heating, electricity, janitorial work, snow removal and security.
Jim Deyerle, who handles market building leasing as an agent for Hall Associates, said the new rates aren’t much higher than what retailers paid before the closure.
“We tried to keep it as close as we could to what the former tenants were paying,” he said.
An April 2010 lease between the city and Gone CoCo, for instance, showed that the retailer paid $30.62 per square foot, including maintenance fees.
Roger Elkin, managing partner with Hall Associates, said that when figuring the new rates with the Market Building Foundation, they took into account that operating expenses will be higher because the building will be open later in the evening and on Sundays. And, Elkin added, the building has to make money to pay back its debts.
Still, the rate doesn’t compare to other downtown leases, said Bryan Musselwhite of Poe and Cronk Real Estate Group, a firm that represents properties and does leasing in downtown Roanoke.
Other downtown storefronts lease for $13 to $15 per square foot, he said. Those rates may or may not include maintenance fees depending on the building, Musselwhite said.
But he pointed out that market building retailers will be paying for location.
“It’s a brand-new space in downtown,” he said. “You’ll see folks that think it’s expensive, and you’ll see folks who say, ‘Wow! My business needs to be in there.’”
In comparison, Towers Shopping Center charges from $12 to $40 a square foot, depending on location and size, said John Nielsen, the leasing agent for the center. Those rates do not include maintenance fees. Leasing rates for Valley View Mall were not available.
Nielsen said higher rates are indicative of a vibrant, desirable area for both retailers and consumers.
“The most unhealthy thing you could have in any downtown area or any retail area is low rates,” Nielsen said. “Then you’ve got problems.”
Deyerle wouldn’t be specific about what type of retailers Hall Associates would like to bring to the building but did say they want local retailers — no franchises — that will promote the Roanoke Valley and the region.
He’s not worried that retail leases haven’t been signed.
It’s hard to lease retail right now, he said, and many retailers have a wait-and-see mentality.
“They’re all looking to see how successful the building will be. They want to see traffic flow, how busy the building will be,” he said.
He expects the finished building to be an economic driver.
Extended evening hours will keep people in the area later, and concerts, weddings and conferences in the top floor ballroom will also generate business downtown. Deyerle said the market building might stay open later during other downtown events, such as Dickens of a Christmas.
Retailers see the good in the renovations, too, despite slow sales the past year.
“Everybody is going to want a little piece of downtown,” said Wood, at Shades of Color. “I think our sales will come right back up.”
Similar Posts:
- Christmas festival set at old Macy’s building to drive visitation
- Publix to open Chelsea store on April 6
- Food Lion is making changes
- North Las Vegas packs up, moves into new digs
- South Carolina developer sees opportunity in old Mall of Memphis site
