Retail Therapy 

Ballpark or no ballpark, rebuilding Richmond’s retail base won’t be easy.

click to enlarge cover19_retail_no_headline.jpg

During the glory years of Richmond retailing, from the 1880s to the 1980s, the epicenters of fancy shopping were two downtown department stores at Broad and Grace, between Fifth and Seventh streets. Shoppers thronged to Miller & Rhoads and Thalhimers on streetcars, in automobiles and off of purple or citrus-colored railroad trains from as far away as North Carolina.

The stores crafted their personas. Miller & Rhoads held an author's night in its Tea Room and played host to forums where women could hold serious discussions about politics and current events. Thalhimers celebrated the seasons with events topped by Christmas extravaganzas.

"The streets were packed with people," says Bill Martin, director of the Valentine Richmond History Center. "They had what you don't see with national stores today — locally based, family-owned stores that reached out to the community."

click to enlarge As late as May 1970, shoppers were lining up for service at Thalhimers, located downtown at Broad and Grace streets. - RICHMOND TIMES-DISPATCH COLLECTION/VALENTINE RICHMOND HISTORY CENTER
  • Richmond Times-Dispatch Collection/Valentine Richmond History Center
  • As late as May 1970, shoppers were lining up for service at Thalhimers, located downtown at Broad and Grace streets.

Richmond's gray ladies of retailing faded away after new superhighways, racial integration and white flight sent shoppers to the suburbs. As in cities across the country, Richmond was left with plenty of poverty and a downtown devoid of stores.

The cash registers never rang quite the same way again. While the regional retail landscape continues to diversify, Richmond has yet to settle upon where its retail future is headed.

There are pockets of success: the always bustling Carytown with its boutiques and restaurants and overall "isn't it cool to live in Richmond" vibe, the resurgence of parts of Broad Street, Shockoe's claim to a few high-end retailers such as La Diff and Ledbury, and a restaurant and brewery scene that's drawing national attention.

But when it comes to accessing everyday goods, the city falls short. The actual inventory of retail in downtown area is tiny. Northwestern Metro Richmond, which includes Henrico County, has 23 times the retail inventory as measured by square footage. Southwestern Metro Richmond, which includes Chesterfield County, has 16 times downtown's level. Each county has a population about one-third larger than Richmond's.

The battle over Mayor Dwight Jones' proposal to relocate the Flying Squirrels baseball stadium from the Boulevard to Shockoe Bottom and how much taxpayer money should be used to redevelop both areas is, in part, about how big a share of the retail pie the city can recapture from the counties.

The success of Jones' plan depends heavily on the success of retail at both sites, yet much uncertainty remains — not the least of which is that the administration has offered little information on its plans for the Boulevard.

Further stirring the pot is last week's news that a local development company is pushing a competing proposal to build — and pay for — a stadium on Boulevard. The developers also seek to develop the surrounding land.

Striving to build its tax base, the city must compete with a seemingly endless expansion of retail into the surrounding wealthier counties. A 2012 study by Robert Charles Lesser & Co. for Virginia Commonwealth University concluded that people come to Richmond to eat "but leave to buy everything else."

The city must find its place in a spectrum of retail that stretches from shiny West Broad Village to the slowly resurrecting malls of the suburban neighborhoods just outside the city limits, known as the inner ring, and the emerging ethnic markets of the region's immigrant population. The city must contend with not only with the legacy of its past, which has left it unable to annex more land for retail, but also the trajectory of the future that sees the continued growth of Internet sales. And though Richmond finally is seeing its population grow again and is welcoming wealthier people into downtown and surrounding neighborhoods, "the downtown retail market is not overwhelming," says Brian Glass, a senior vice president at Colliers International, a commercial real estate brokerage.

All of which raises the stakes for development in Shockoe Bottom and on the Boulevard, where the administration seeks to lay its claim upon some of the market it has lost to the suburbs and return Richmond to its former shopping glory — or, at the very least, to a more economically well-rounded city.

click to enlarge Short Pump Town Center, an open-air mall, opened in Henrico County in 2003. It boasts of some of the county's higher-end shopping, including a Nordstrom. - SCOTT ELMQUIST
  • Scott Elmquist
  • Short Pump Town Center, an open-air mall, opened in Henrico County in 2003. It boasts of some of the county's higher-end shopping, including a Nordstrom.

The reality is that the action in retailing remains where it's been since the 1950s — in a leapfrog contest stretching increasingly farther from the city center. Shiny new malls continue to hop over one another to keep up with new subdivisions pushing west and south.

On the north side of the James River, Willow Lawn on West Broad Street was one of the first suburban shopping centers. In due course, it was passed by with Regency Mall on Parham Road. The same pattern emerged in Chesterfield County on the South Side.

All malls were leapfrogged in a big way in 2003, when the high-end Short Pump Town Center and Stony Point Fashion Park opened. Both represented a major rung up on Richmond's climb to classy shopping. Short Pump offers a Nordstrom, and Stony Point boasts of Saks Fifth Avenue, Tiffany & Co., and Brooks Brothers.

Of those two new malls, Short Pump on congested West Broad Street is booming while Stony Point sputters, off the more remote Chippenham Parkway within the city limits. Recently, Champps Americana sports bar closed (the chain filed for Chapter 11 bankruptcy) and, incredibly, so did the mall's Starbucks. Stony Point general manager Steve Bonniville says replacements are in the works, and "we're pleased with how the center has been doing."

Even so, "there's a shakiness there," Glass says. One recent weekday morning the shopping center seemed nearly empty while a mother and her child looked over the Lexus luxury cars on display next to a fountain.

click to enlarge The high-end Stony Point Fashion Park has taken hits recently with the loss of Starbucks, which said it closed Feb. 24 “for the sake of long-term growth.” The mall’s manager says replacements are coming. - SCOTT ELMQUIST
  • Scott Elmquist
  • The high-end Stony Point Fashion Park has taken hits recently with the loss of Starbucks, which said it closed Feb. 24 “for the sake of long-term growth.” The mall’s manager says replacements are coming.

Stony Point's predicament underlines the uncertainties about regional retailing. These are especially important questions because retailing is a key component of a plan that could redefine shopping and living in the downtown area.

Jones and members of the Richmond elite, such as Venture Richmond head Jack Berry, have resuscitated — for the third time — the idea of moving the city's AA minor-league baseball stadium from the Boulevard near the intersections of interstates 64 and 95 to historic but congested Shockoe Bottom.

The $80 million plan for a Bottom location would feature an updated ballpark, a museum to commemorate slave trading that was the area's antebellum economic mainstay, plus retail, restaurants, bars and office space to serve growing numbers of young professionals and aging baby boomers who are moving into downtown, Church Hill and nearby areas. The 23-story Central National Bank building at 219 E. Broad St. is being renovated into apartments while condos and lofts dot Tobacco Row and formerly industrial sections of Manchester.

A chronic complaint is that hardly any grocery or other stores exist in this area that used to be a hallmark of downtown. The Shockoe project would be anchored by a large Kroger grocery store that may open even without a stadium.

Critics of the plan say the Boulevard is a better site for baseball because it doesn't disturb venerable slave sites and is more appealing to the core fan base — children and their families who aren't interested in downing a Cuba libre at a swank bar after a game.

The Boulevard is the prize here. Moving the stadium to Shockoe Bottom opens 62 acres on Boulevard to development. The administration's ideas for all that prime real estate include building more than a thousand apartments, a 288-room hotel and 442,100 square feet of retail and entertainment space. The new counterproposal by private developers hasn't been publicly released, and little is known about the extent of retail development envisioned.

"I know that there's a very high level of serious interest generally in the Boulevard site due to its size and location," says Bill Pantele, a Richmond lawyer and former city councilman. "But it's really premature because the property is not ready for development."

A list of what stores might actually locate on the Boulevard withers under scrutiny. For example, an ideal anchor would be a grocery store. The location allows it to serve Scott's Addition and the North Side, a mix ranging from wealthier newcomers to enclaves of low-income residents who have no grocery stores in their neighborhoods.

click to enlarge The popular grocery store Wegmans recently announced that it’s bringing two stores to Richmond’s affluent suburbs. - WEGMANS
  • Wegmans
  • The popular grocery store Wegmans recently announced that it’s bringing two stores to Richmond’s affluent suburbs.

But which grocery? Not Kroger, says the Cincinnati-based chain's mid-Atlantic spokesman, Carl York. Its other stores are too close. Another possibility is a Wal-Mart Neighborhood Market, Glass says — a smaller version of the familiar big box. High-end grocer Wegmans, a Rochester, N.Y.-based chain, is coming to the Richmond area but plans to locate in the wealthier areas of western Henrico and Chesterfield counties.

When it comes to other options, the ideas can become dreamy. Some years ago, the Boulevard was mentioned as a possibility for a hotly sought-after Ikea store. It whipped up lots of enthusiasm for the popular Swedish chain that sells modern-style furniture. "That caught a lot of people's eyes," Pantele says, because the closest Ikea store is in Potomac Mills of Woodbridge.

But that isn't likely to happen. Joseph Roth, an Ikea spokesman near Philadelphia, says the company has no plans to open a Richmond store. "We need a population base of two million to support a store," he says, "and Richmond's not there yet."

 

Roth's comment is telling. The Richmond region is caught in a conundrum of being in the middle — too large and rich to be a lesser-tier market, but not big or rich enough to play in the big leagues. The cutoff to the major leagues is two million, and Greater Richmond is about 800,000 people shy of that magic number.

The region has strong contrasts, being both soundly blue- and white-collar. Inside city limits, 26 percent of Richmonders live in poverty, among the highest levels in the state. Yet the city and its suburbs also have plenty of high-salary jobs with ample disposable income. The largest private employer is Capital One Financial, with nearly 11,000 employees working in finance or high technology. Other big employers include such well-paying outfits as hospitals, state government, power utility Dominion Resources, SunTrust Bank, cigarette maker Altria, DuPont and MeadWestvaco.

Richmond stacks up well according to similar markets in the South, including Charlotte, N.C., Nashville, Tenn., Greenville, S.C., Savannah, Ga., Charleston, W.Va., and Columbia, S.C., according to a Colliers study. The Richmond regional market is the third largest of the group, but has the highest ratio of retail square footage to metropolitan population — which, Glass says, "might make it overretailed."

As a comparison, the larger Richmond region averages 60.9 square feet of retail per person, while Charlotte has 27.2 square feet and Nashville has 32 square feet. Richmond has an enviable lower store-vacancy rate — 6.6 percent — than the larger Nashville and Charlotte markets. Indeed, Glass says, the regional retail industry is so robust, it may, in fact, have too many stores instead of not enough.

While precise disposable income figures are difficult to come by, gauging the higher-end level of shopping shows Richmond's limits.
Founded in Richmond in 1897, Schwarzschild Jewelers has been a leader in the market for years. Its Omega watches start at about $2,000. Its Short Pump store manager, Sam Spaulding, a 30-year veteran of the jewelry industry, says there's a limit to the top end of the market. "There are lots of chain jewelry stores that do a good business but they are more in the middle range," he says. "We're the only official Omega dealer in town."

For luxury goods, the Richmond region "is a market but it's obviously not a huge market," Glass says. "There's a lot of disposable income and those people are in a position to buy locally or go up to Tysons [Corner] or New York."

For overall retail, as of the last quarter of 2013 Henrico led the list of stores with about 6 million square feet of inventory, closely followed by Chesterfield with about 4 million square feet of inventory. By comparison, downtown Richmond has 270,483 square feet of inventory according to Colliers International.

While downtown Richmond hungers for more retail, western Henrico is getting a coveted Cabela's sporting goods store at the rising West Broad Marketplace, which also landed one of the two new Wegmans. The other Wegmans will be built on the south side of the James River at Stonehenge, a new shopping center on Midlothian Turnpike between Chesterfield Towne Center and Route 288.

Indeed, the Route 288 superhighway has been solidifying retailing and commuting between the region's two highest-income markets in a way that takes downtown Richmond completely out of the equation, to its possible detriment.

Finished in 2004, the highway connects Interstate 95 south of Richmond with Interstate 64 in Goochland County, just west of Short Pump. It links high-tech jobs in Henrico with high-priced bedroom communities in Chesterfield that have the highest-income ZIP codes, including Foxfire, Woodlake and Brandermill. Henrico also has its share of tony subdivisions, including Twin Hickory and Wyndham, so it's no surprise that Wegmans decided to split the difference and locate two stores close to lucrative markets on either side of the river.

Left out, naturally, was the city of Richmond. But the center city is hardly alone in finding its retail outlets squashed while customers move away. The inner suburbs have been caught in the same spiral of decline brought on by changing demographics. They also face the same prospects of renewal.

click to enlarge Demolition on the obsolete but venerable Cloverleaf Mall, right, began in 2011 to make way for a new shopping center anchored by Kroger Marketplace in Midlothian (below). - SCOTT ELMQUIST
  • Scott Elmquist
  • Demolition on the obsolete but venerable Cloverleaf Mall, right, began in 2011 to make way for a new shopping center anchored by Kroger Marketplace in Midlothian (below).

click to enlarge feat19_retail_kroger.jpg

One example is Cloverleaf Mall, which opened in 1972 at Chippenham Parkway and Midlothian Turnpike. It was the classic mall of the era, with a brutalist design and huge, air-conditioned, inside walkways that could have been a smash-up prop for Jake and Elwood in the 1980 movie "The Blues Brothers." Cloverleaf drifted into trouble in the 1980s as subdivisions kept moving west.

But after being demolished in 2011, Cloverleaf is coming back. In December 2012, a Kroger Marketplace opened to anchor a successor shopping center called Stonebridge and another across Midlothian Turnpike named Spring Rock Green. There's a Panera Bread across the street, and a Chipotle is going up to fill the void of a pushed-out BK Music, one of the region's last sellers of compact discs, which recently moved to Stratford Hills Shopping Center on Forest Hill Avenue. The county charged a special tax assessment on the area, now called Gateway, to improve streets and plant trees. Apartments are next.

 

Other wild cards in the region's retailing hand are smaller strip malls and how growing Internet sales might affect the future of brick-and-mortar stores.

As more monied residents move farther from the center of Richmond, they leave pockets of strip malls, some of which are little more than a few shops anchored by a smaller food stores. Some go vacant or fall into disrepair, but their plummeting rents make them attractive buys.

"Like anything, it's location, location, location," says John J. Schwartz, managing director of Richmond-based Have Site Will Travel, a commercial real estate firm. He notes that when Wegmans goes up at a now-sleeping section on western Midlothian Turnpike, the rents around it will rise.

Cheaper rents can be found on eastern Midlothian Turnpike, Jefferson Davis Highway, inner parts of West Broad Street and along Parham Road. Some are snatched up by recent immigrants to the area, notably Chinese, Indian, Pakistanis or Hispanics, for retail outlets catering to their cultures.

During the last 20 years, the Hispanic population in Richmond has shot up by 300 percent to more than 46,000. Many members of that community operate tiendas, clothing or other retail outlets along inner suburban corridors, such as Jefferson Davis Highway, says Rita Willis, who tracks business for the Virginia Hispanic Chamber of Commerce.

A rule of thumb is that newcomers from Mexico and Central America will run stores and restaurants, she says: "We have a handful of people from South America who tend to operate restaurants."

Another challenge is that smaller strip malls may be more vulnerable to web-based sales. The Wall Street Journal reported that during the Christmas holidays, digital sales were cutting significantly into traditional brick- and-mortar stores. The Web was one reason Radio Shack recently announced that it as closing 1,100 stores. Consumers can just as easily buy small electronics items online.

But Bill Kennedy, of relocated BK Music, says online retailing isn't the threat it's made out to be.

"As one who has had to compete with the Internet far longer than most, I have to say, it can be done," he says. "Service, selection and price are important. However, good, solid management of the core principles is paramount. I work in my store almost every day. That is not the case for chain stores, and that's about all you're going to find in those centers with the rent they are asking."

Adds Schwartz: "You can't get your hair done, have your car fixed or get your ears and eyes checked on the Internet. You can't have coffee with a friend on the Internet."

Issues of personal service aside, online retailing remains a huge and growing presence. Look no further than the $85 million, 1.2 million-square-foot distribution center that Amazon opened in 2011 in the Meadowville Technology Park in eastern Chesterfield County. With 3,500 full- and part-time workers, it's one of the region's largest new employers and has created traffic jams in a rural spot where none existed.

Amazon is not only the hands-down leader in Web-based retailing, but also forcing change on everything from book sales to delivery systems. Amazon's digital book and home-delivered sales helped kill off Borders and is a major threat to Barnes & Noble, the remaining bookstore chain. Amazon leader Jeff Bezos created a stir last year when he suggested on CBS's "60 Minutes" that Amazon might someday use unmanned aerial drones to deliver goods. (At the moment, that would be a problem at the Chesterfield distribution center, because drones could reach Chester but not downtown Richmond.)

For the last half century, the regional retail market has marched farther and farther from the core of the city. Interest is keen to reverse the trend as more people with more money move into the city. At some point, the thinking goes, a critical mass will return, enough to sustain a powerful retail engine. For now, the counties still have the power. As Glass says: "Look where Wegmans is going." S

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