“People come in here and ask, ‘Why are there so many vacancies?’ It gives them the impression that the Mall is going under,” says George Benford, owner of Siips Wine Bar and board member of the Downtown Business Association of Charlottesville (DBAC). Benford explains that increasing vacancies on the Downtown Mall are fueling a vicious cycle: Empty storefronts weaken the Mall’s image and hurt sales, which in turn causes more stores to go out of business, leaving more vacancies.
Recognizing the growing number of empty spaces on the Downtown Mall, the city’s Office of Economic Development began conducting a semi-annual “vacancy report” in July 2008, when the Mall faced a 3 percent storefront vacancy rate. By July 2009, the rate had jumped, and 9 percent of the Mall’s 193 storefronts were vacant.
According to Chris Engel, the city’s Assistant Director of the Office of Economic Development, January 2010’s numbers are right around that 9 percent mark, which represents 18 empty storefronts of the 193 total. While that percentage might not sound like much, the sight of bare windows and consecutive “For Lease” banners along the Mall makes the increase in Downtown Mall vacancies since 2008 far more apparent. Throw in the Charlottesville Ice Park, which recently went on the market for $4.1 million, and the threat of empty space looms a bit larger.
Though the economic downturn is a key factor, it is not solely to blame for slower business, says Benford. This winter’s record snowfall and the structure of the 2009 calendar year also played a part. The December snowstorm, which occurred the week before Christmas, kept many consumers from trekking to the Downtown Mall. Also, with Christmas, New Year’s Eve and Valentine’s Day falling on weekends, mid-week sales did not enjoy the boost that holiday shopping typically provides.
A recent study by Charlottesville’s Office of Economic Development identifies 18 vacant storefronts among the Downtown Mall’s 193 total, roughly consistent with a July 2009 count.
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“We’re struggling to get to April. I’m hearing it from so many businesses,” says Benford.
Local realtors, on the other hand, largely see the vacancies as a product of the nationwide economic slump. “Those spaces will fill up when demand returns, and the tenants and landlords find the level of pricing that works for both parties,” says Bob Kahn, of Bob Kahn Realty and Investment. In fact, city spokesman Rick Barrick says a few businesses have already seized some empty spaces.
“We are aware of three new businesses coming to the Mall area in the next two months,” wrote Barrick in an e-mail. “In the old Order from Horder space, a popcorn retailer and an iron works art gallery, and in the 500 block of East Main a toy store will arrive next to the Hallmark store.”
Also, many realtors are advertising reduced rents on their online listings as a way to adjust pricing to meet demand. For example, commercial realtors Kabbash, Fox & Gentry recently reduced their 422 East Main Street property to $10 per square foot from $14 per square foot.
However, price reduction is an option dependent upon the specific space, says Kahn, referencing his agency’s listing at 104 East Main Street, which has received “quite a number of inquiries” without reducing the price from $17 per square foot.
Benford still sees the general increase in vacancies as a concern that deserves attention from the city. He cites tax credits, low-interest loans, and hiring a full-time business developer (the DBAC is run on a volunteer basis) as ways other cities have actively worked to improve business.
Currently, the Office of Economic Development serves more as a liaison between property owners and potential tenants; its mission is “to serve as a catalyst for public and private initiatives.” According to Engel, budget constraints limit the city in providing more direct assistance to local businesses. “I’m sure we could do more with additional resources,” he says. “With this level of sustained vacancies, it might become more of a priority.”
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