Chapel Hill News

February 25, 2014

Chapel Hill businesses wary of Ephesus-Fordham changes

Many store owners in the Ephesus-Fordham commercial district are taking a wait-and-see attitude, but a few are more concerned that large-scale changes could put them out of business.

Many store owners in the Ephesus-Fordham commercial district are taking a wait-and-see attitude, but a few worry big changes could put them out of business.

Chapel Hill is looking at a new type of zoning for 190 acres from Elliott Road to Chapel Hill Memorial Cemetery on Legion Road. If the Town Council approves the draft “form-based code,” town leaders say it could establish consistent building, street and landscaping standards, plus help solve longstanding traffic and flooding issues there.

It also could launch decades of redevelopment projects.

Shopping centers in the Ephesus-Fordham district might charge higher rents if they are redeveloped, officials said, and some small businesses might not survive. The Chapel Hill-Carrboro Chamber of Commerce was expected to meet with business owners this week.

An informal survey of Ephesus-Fordham business owners found the most worries among Village Plaza’s longtime, family-owned businesses. Property manager Paul Munana said the center won’t be redeveloped for a long time.

Dwight Bassett, the town’s economic development director, said last week he expects the next decade to bring changes to several properties, although many tenants said they know very little about what’s planned.

Mary Anne Steinis, owner of Framer’s Market & Gallery, said she’s aware of the proposed new zoning for the area but is waiting to see how it plays out. Her priority is improving Rams Plaza’s driveways.

Argus Development Group completed a $1.5 million renovation at Rams Plaza last year. They offered Steinis a five-year lease, with an option to renew, but a three-year lease gave her more flexibility, she said.

“They’ve worked with me on a number of things, and they’ve been attentive. When I’ve had an issue, they were right there, and that’s what I want,” Steinis said. “Now, what happens in the future, we’ll have to deal with in the future.”

Munana said Village Plaza is a healthy shopping center but also a place where neighbors gather to relax and socialize. The center’s owner, Regency Centers, is trying to stay flexible while working with neighbors and the town to build connections to nearby parcels, he said. They have to balance the shopping center’s needs with those of its tenants and the community, he said.

Merchants just south of Whole Foods are on different leasing schedules and said they know very little about what might happen in the next decade. They are worried about limited terms and possible rent hikes.

Mike Cash, owner of VIP Printing and Signs Express, said his lease was renewed through August 2015. He’s not sure what’s going to happen then to the store his father opened in 1981. Hair For You owner Kelly Cole and Yarns Etc. owner Mary Stowe plan to stay for now but said they would not be able to afford a hefty rent increase.

At Plaza Dry Cleaners, Sherry Duke said her mother, owner Brenda Honeycutt, expects to know by April what’s happening with their lease. About 15 people work at the store, Duke said.

Munana said Whole Foods and other merchants have long leases; he is working with five small retailers to extend ther leases through 2016, he said. Cash’s lease will be re-evaluated in 2015, and Lacock’s Shoe Store and Shoe Repair is renting by the month, he said.

“The heart and soul of our shopping center are our small retailers,” Munana said.

Rents kept low

Village Plaza leases have been artificially low for years, said former owner Steve Ginn. His firm, Ginn & Co. Partners, sold Village Plaza to Florida-based Regency Centers in 2012.

Ginn said he also extended a few leases to protect tenants as best he could before leaving, but change is inevitable. Regency Centers is entitled to get the maximum value from its property, he said.

Chris Shaw was Village Plaza’s property manager for 29 years to cover his lease for Shaw Business Machines. The new owners didn’t need his services, so Shaw said he moved the business to his home in January. He still manages Gateway Commons, behind Village Plaza on East Franklin Street.

“We were so doggone lucky to have a landlord like (Steve Ginn),” he said.

Bassett said short-term leases give an owner flexibility to move stores around during times of change. The town is happy to help if business owners would share their needs, he said.

Stormwater costs

Property and business owner Johnny Mariakakis said he asked the town for information. It took a while, but Bassett did stop by Mariakakis Plaza along Fordham Boulevard, he said.

The small strip mall home to Mariakakis Fine Food and Wine and other tenants will somehow survive, Mariakakis said. However, he fears other small businesses will be pushed out of the area by the cost of redevelopment and a new stormwater district tax on developers and property owners.

The town could use a bond and proceeds from the district tax to do more than $1 million in stormwater improvements. Another $8.8 million in street improvements, using Town Hall as collateral, could be repaid from increased property and sales tax revenues.

The plan’s critics said it siphons off money meant to pay for services to the new development and raises the tax burden on other property owners. The town needs more commercial tax revenues, but an ill-conceived plan could cause irreversible harm to the community, they said.

“We need to look at affordable businesses. I’m talking about people who repair shoes, the triple A place at the BP that we’re going to lose. ... barber shops, a place to get a trophy made for your kids’ soccer team,” Mariakakis said. “Please don’t change Chapel Hill.”


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