Top: For lease signs line are placed along West Mercury Boulevard, a busy stretch that serves as Hampton's primary business corridor. Below: The lot at Newmarket South shopping center is mostly empty on a weekday morning. (Daily Press photos by Sangjib Min (top) and Dennis Tennant (bottom) / October 3, 2009)
dailypress.com
By Veronica Chufo
247-4741
11:12 PM EDT, October 3, 2009
HAMPTON — The Peninsula Town Center is rising from the rubble of the Coliseum Mall.
The development of big-name retailers, anchored by Target, J.C. Penney, Macy’s and Barnes & Noble, is taking shape off West Mercury Boulevard.
Two new restaurants have recently opened, and a third is on the way.
At the nearby Power Plant, a NASCAR Sports Grille restaurant is expected soon.
But the Mercury makeover largely stops around Aberdeen Road.
West of there, the number of new buildings and national retailers dwindle.
Payday lending businesses, beauty supply shops, dollar stores and thrift stores are common in the strip lined with mostly older plazas, many of them with space for lease.
It’s a tale of two Mercurys — one new and master-planned, the other a hodgepodge of aging strip malls and commercial buildings.
The landscape of Mercury east of Aberdeen, in the Coliseum Central Business Improvement District, has changed in recent years, but redevelopment has been slow in coming to the rest of West Mercury Boulevard — a busy corridor traveled by more than 53,000 vehicles a day.
In 2004, the city of Hampton adopted a master plan mapping out future development of the Coliseum area. The plan ends at Aberdeen Road.
Hampton’s top development official said the city is working with business owners but acknowledged that more can be done.
“We all acknowledge that that probably is worth some sort of planning effort to that stretch,” said Economic Development Director James Eason. “But we’ve been so busy with the Coliseum Central master plan that we haven’t had a whole lot of time to focus on that area between Aberdeen and Jefferson. There are definitely some areas in there that need it.”
Mercury’s history
Mercury Boulevard was built in 1942 as Military Highway to connect military bases. Since then, it has become a vital east-west artery on the lower Peninsula and an entree to Interstate 64.
The corridor was once dotted with malls. There was the now-demolished Mercury Mall, built in 1967. It was followed by the Coliseum Mall, which was torn down to make way for the highly promoted Peninsula Town Center; and Newmarket North, which is now used for office space.
With malls at both ends, Mercury Boulevard grew up as a retail corridor, said Chris Rouzie, a senior vice president in the Newport News office of Thalhimer, a commercial real estate firm. That made it the place to shop on the lower Peninsula until 1993, when taxable sales in Newport News first topped taxable sales in Hampton, Eason said.
But over time, as the Peninsula’s population shifted north, Jefferson Avenue became the preferred spot for retail. It’s home to the Patrick Henry Mall, built in 1987, the City Center at Oyster Point, Port Warwick and national retailers such as Best Buy, Sam’s Club and Kohl’s. Some businesses, including Haynes Furniture and the former Circuit City, vacated Mercury stores in favor of Jefferson.
“Retail tends to follow money and growth,” said H. Blount Hunter, of H. Blount Hunter Retail and Real Estate Research Co. of Norfolk. “That’s been sort of a northern movement on the Peninsula. You don’t find all those for-rent signs on Jefferson Avenue.”
Jefferson is also a more centrally located corridor on the Peninsula, easy to get to for residents from Williamsburg to Hampton.
“If you’re a retailer that looks at the Peninsula and only needs one location, then Jefferson is an ideal location,” Rouzie said. “Jefferson is in the middle.”
Hampton is fighting back. As business-associated revenue flowing into Hampton’s coffers dwindled, the city launched projects such as the Power Plant and the Peninsula Town Center to woo retailers and shoppers back, Eason said.
Those two projects are filling up, with a grand opening scheduled for the Peninsula Town Center next spring. That’s expected to be followed by redevelopment of the Riverdale Shopping Center to complement the Town Center, Eason said.
Chronic vacancies
But along Mercury west of Aberdeen, vacancies seem to be chronic, Hunter said. That makes him think it’s overbuilt.
“That’s the 800-pound gorilla in the room that everybody is afraid to admit,” said Hunter, who conducts consumer research and retail real estate studies. “We have excess capacity.”
And it’s not easy to find lasting tenants for older buildings, he said.
“Poor-quality shopping centers attract marginal-quality tenants. So if a shopping center is in bad repair or needs to be updated, they’re not going to get a quality tenant,” Hunter said.
The current economic picture isn’t helping. Of the commercial real estate sectors, retail may have taken the hardest hit, as thousands of businesses across the country close their doors, said Peter Eckert, president of the Hampton Roads Association for Commercial Real Estate. Retail is what makes up a lot of Mercury’s development.
Vacancies are bad for business.
Rodney Alexander is manager of Best Way, a rent-to-own business in a plaza that includes a vacant storefront and a dialysis center.
Having a vacancy next door cuts down on walk-through traffic, he said.
Best Way has been in business for going on 25 years, 10 of those in its current location.
“Everybody’s trying to move into the new developments,” Alexander said. “That new curb appeal attracts a lot of people, that new storefront.”
People think new developments are safer and better illuminated than an aging, half-vacant plaza, Alexander said.
Aging plazas, future potential
Hampton offers incentives to spur aging commercial properties, including shopping centers, to rehabilitate. So far, only one property on Mercury Boulevard between I-64 and the James River Bridge has participated, city officials said.
Some of the shopping centers have been there since the 1950s. Declining retail strips like Mercury Boulevard can be found throughout the United States. Because they’re aging and expansive, they’re costly to rehabilitate or redevelop, especially for budget-strapped cities and counties struggling to meet basic needs like education and public safety.
“It’s very hard for those kind of buildings to succeed now, particularly with the newer stuff going up,” Eason said.
But there’s hope.
Peninsula Town Center could add more traffic to Mercury, which could lead to more eyes on, and more opportunities for, businesses along that stretch. Coliseum Central retailers already trace many of their customers from south of the James River Bridge, Eason said, and he expects that customer base to follow at the Peninsula Town Center.
So business and plaza owners along Mercury Boulevard will see the benefit to investing in upgrades to attract those shoppers, he said. That’s already happening, with a new Peninsula Honda building and CVS pharmacy.
“It’s no question it’s going to have an impact,” Eason said.
Copyright © 2009, Newport News, Va., Daily Press
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