University Marketplace: Reading tea leaves into a survey...

Last week came the news that, in light of the City Council's approval of the re-zoning request for the old Kroger shopping center across the street from the one-time South Square Mall, the mixed-use development plans for the project are now moving along at a brisk clip.

Besides Charlotte-based Hawthorne, who's been a part of this from day one, it's been revealed that financial backing comes from a joint venture of Morgan Stanley's Real Estate Fund (which has been a major player in property investing since the S&L crisis of the late 1980s) and Duke Energy. The latter, of course, doubtlessly seeing a good opportunity to leverage mixed-use investment a stone's through from their founding family's namesake university. (Who ever said you couldn't do well by doing good?)

According to the Herald-Sun, the project is now slated to encompass 115,000 sq. ft. of retail and 300 luxury apartments. Mid-2009 is the estimated completion date.

Now, we've known for some time that Sitar India Palace would be the only remaining business after the redevelopment's completion. But the H-S and N&O articles note, oh-so-casually, the development team's interest in bringing a 'specialty grocery store' to the area.

And who might they mean by that? Let's take a look at a web survey that was sent to the Inter-Neighborhood Council list last week by the development team. The survey asks some interesting questions:

• What kind of retail do you want to see -- giving as examples 'specialty grocer' and bookstore -- and asks for any specific retailer names you might want in the plaza.
• How often would you shop these retailers, and the kicker:
• "Some retailers believe Chapel Hill and Durham comprise one market that can be served by a single store in Chapel Hill. How often would you visit these same retailers if they were only located in Chapel Hill?"

Let's see... retailers whom shoppers might demand in central Durham that happen to already have a store in Chapel Hill. Well, on the specialty grocer side, that describes an extremely small subset of stores -- most notably Trader Joe's, whose northern Chapel Hill location was clearly hoped to draw from affluent South Durham as well as the Tar Heel Town. Earth Fare and Fresh Market could also fit that category, though the former has shuttered its CH location, which is actually undergoing a transformation into a TJ's.

On the bookstore side, while Durham's got popular specialty and locally-owned bookstores like The Book Exchange, The Regulator, and BookDabbler, one could also imagine Borders fitting that category, given that there's no national big-box bookseller any further than one mile north of I-40. (Northgate's owners reportedly tried hard to land a Borders for the mall at the early phase of their renovations -- a retail play made before, one assumes, they partnered with The Regulator in urging Duke to keep Central Campus from harming local businesses by bringing in a national-chain bookstore....)

Anyway, this does highlight one of the challenges for the good folks working on the University Marketplace project: how to take advantage of the South Square-area demographics, which from a major retailer perspective are considered "desirable," in a world where retailers are already trying to bridge the Durham and CH retail markets at strategic sites like Southpoint, Patterson Place, and New Hope Commons.

The rub, of course, is that there are plenty of shoppers in the central and northern reaches of the Bull City who'd like to see these sort of retail options in closer proximity. South Square isn't too bad a place to reach, but many folks aren't interested in fighting the 15-501 traffic all the way to South Durham or especially Chapel Hill on a regular basis.

In any case, make your feelings known by filling out the survey and voting with your mouse-clicks.

Comments

[seth vidal]

I know it won't matter but how about reverting the permanent-strip-mall feel of that area of durham by raising the current shopping center, demo'ing the asphalt parking lot and turning it into a very good sized park. I don't see what net advantage we get from yet another chain-store amusement park filled with more examples of generica and creepy children.

I couldn't find it but is there a field in the survey for "Please build a park?"

-sv

[Matt]

FWIW, I understand that the Chapel Hill Fresh Market is moving into the space formerly held by Harris Teeter on NC 54 just east of 15/501 - across from Glen Lennox.

[Myers Sugg]

Thanks for your entry Kevin.

I completed Hawthorne's survey sometime last week. I always love the idea of a park, but I don't think it is a realistic one in this instance. This large commercial space is already commercial. Much of the infrastructure is already in place. Residential property is not going to have to come down to accomodate this development, etc. I think in Durham there has been too many times when residential property, or ones with other non-commercial allowed uses, gets rezoned to GC, while perfectly serviceable commerically zoned parcels already exist.

The Hawthorne/Morgan Stanley, et al investment amount appears to be significant. Although I'm not a fan of the entire South Square area (I personally think it is ugly), this type of development looks appropriate.

Does Food Lion still have their Bloom subsidiary? From what I've seen, you would have no idea the place was operated by the Lion....Fresh Market is not a big draw, trust me. Go to the one in Cameron Village and you won't have to fight with anyone for a shopping cart. What about a second location of Whole Foods?

Myers

[Michael Bacon]

Just completed it -- I asked them to put significant openings and frontage onto University Blvd. It's ridiculous to sit up that close to a road like that and completely ignore it.

For what it's worth, Seth, the plans they've got do tear up the strip mall design and replace it with a multi-story, genuinely mixed use (i.e., not "we have a bank AND a restaurant!") design. I also remain convinced that South Square's lifespan is about what we can expect for the big box replacement that went in next to it: 20 years. So in 15 years, we can expect to be able to redevelop that mess properly. I think the model these folks have is a good one to start with.

[JDC]

No doubt Michael. Strip malls and big box centers will gradually be overtaken by mixed-use "villages." Single-use zoning will eventually become a thing of the past, if not because of desire than because of necessity.

[Valerie]

It's all very exciting! I asked for all the things that I drive to Chapel Hill, Raleigh, and the other side of Durham for. Would love to drive less! But "Some retailers believe Chapel Hill and Durham comprise one market that can be served by a single store in Chapel Hill. How often would you visit these same retailers if they were only located in Chapel Hill?"... huh? (Darn, I just realized I forgot to list Locopops. University M'place folks... add Locopops to that list!)

[Celeste]

I just thought of what I would really like to see in that area - a Baja Fresh. I know this is terribly chainy of me, but I miss having one in the area like we did in Annapolis, MD. And it would give the nearby Toxic Hell a run for its money.

[ASE]

Could have sworn that Kevin wrote about the Shannon Plaza purchase by this same Charlotte group, Hawthorne Retail Partners, but I can't find a post about it.

We Love Durham blogged a photo of the artistic rendering sign in the parking lot in front of the post office.
http://we-love-durham.com/news/2008/01/09/new-shannon-plaza/

And here's a story about the purchase of the property in the TBJ:
http://triangle.bizjournals.com/triangle/stories/2007/11/12/daily35.html