Mary Stowe will pack up boxes of needles, notions and toy sheep at Yarns Etc. this weekend after working for seven years in the Village Plaza store on South Elliott Road.
She will open in a new space at Mariakakis Plaza, along Fordham Boulevard, on Wednesday, Sept. 23. Stowe wasn’t planning to move, but her lease expires in February, she said, and her landlord, Regency Centers, is letting her out a few months early.
“It’ll take a while for people to find out where we went,” she said, “but once we get over there, it’ll be good.”
While nothing has changed for some Village Plaza stores, including Whole Foods and PTA Thrift Shop, Stowe and other business owners say they have faced uncertainty, rising rent and short-term lease renewals since the town created the surrounding Ephesus-Fordham district. Oriental Tailors left when its lease ran out this year for nearby Mark Properties-owned South Village Plaza. South Village Plaza is located just east of Village Plaza apartments – from the ABC store to O2 Fitness.
Many residents agree with the merchants, but town government and business officials say there could be more to the story.
The Town Council created the 190-acre district – between Elliott and Legion roads, and from East Franklin Street to Ephesus Church Road – to encourage owners of the mostly one-story strip malls and businesses to redevelop. It expects the new construction to generate more tax dollars, create more commercial and residential uses and provide new ways to get around the area.
The result can be dense, sometimes taller buildings that only need the town manager and Community Design Commission (CDC) to agree they meet the town’s checklist of requirements. The council no longer votes or holds public hearings about district projects.
Village Plaza apartments on Elliott Road is the first form-based code project to be approved and is now being built. Three other projects have been submitted, including a new CVS and a separate retail building at Ram’s Plaza.
The third would replace the Eastgate BP service station at Shops at Eastgate with one-story retail and restaurants. The plan, which would raze the service station, has raised questions again about the town’s role when policy decisions create problems for established, local businesses.
CDC members, in their initial review of the Eastgate project, noted the district can create redevelopment pressures that threaten small, local businesses that may not provide a high return for landlords. They plan to ask the council to help affected businesses, the third such request since this spring.
The council has not responded to those requests, which came as Plaza Dry Cleaners was closing at Village Plaza. Owner Brenda Honeycutt, 65, decided to retire rather than pay nearly $200,000 to move her equipment and start over when the lease expired, daughter Sherry Duke said.
But Burlington businessman Gary McPherson bought the business just as its doors closed, saving five of 17 jobs. Regency Centers leased them a storefront for pickups and dropoffs until 2016, said McPherson, owner of McPherson Cleaners in Burlington. The future is being negotiated.
Other longtime businesses left Eastgate in the last year, including Eastgate Barber and Style Shop, open since 1973. Owner Max Clark closed shop instead of signing a more expensive lease in March. He and his employees got new jobs at Jim Clark’s Hairstyling at Village Plaza.
Evos, Eastgate Hair Styling and a Best Buy mobile location also left, although the reasons aren’t clear.
Federal Realty charged an average of $24.15 per square foot as of December, according to a company report. An informal online survey of available retail space shows the town’s average annual rent is $23.50 per square foot, or $979 a month for a 500-square-foot store.
The company is courting retailers and restaurateurs, said Deirdre Johnson, Federal Realty vice president of asset management.
“When we have the opportunity to bring new stores to the shopping center, we take great care to select concepts and merchants who will enhance the already great experience and store line-up,” she said.
Most business owners said they are in the dark about possible changes.
“I’m just hoping that whatever (the property owner’s) ideas are, that they benefit us – either remodel the outside or just create some more buzz for this row,” said Becky Broun, co-owner of The Children’s Store on Elliott Road.
David Schwartz, a Town Council candidate who petitioned the council this spring, helped Stowe find space at Mariakakis Plaza after hearing she could move to Durham. The town doesn’t seem to value local shops anymore, he and others said, even though retaining and supporting existing jobs is part of its economic development strategy.
“These aren’t businesses that had to close because they weren’t profitable,” Schwartz said about Yarns Etc. and Eastgate BP.
“It is possible, if there’s the creativity and the political will, to do redevelopment in a way that doesn’t happen at the expense of the existing businesses,” he said.
Ephesus-Fordham gives property owners more options, town officials said, but there may be more to a business decision than the town’s policies.
Successful landowners also make changes to increase their property’s value, Mayor Mark Kleinschmidt said. The town doesn’t always have a role in that, he said, but the council will look this month at how to inspire and support diverse retail development.
The town already helps in several ways, he said, including better sign rules and parking, planned Ephesus-Fordham road improvements, and an overhaul of the permit and inspections department.
The town’s Economic Development Office is limited, economic development officer Dwight Bassett said, because he works alone. The focus is largely on recruiting and developing new businesses, he said, but the town has tools on its Open To Business website, including a property search and links.
Loans, grants and other resources are available through the town’s Small Art Business Loan Program and, for downtown businesses, the Chapel Hill Downtown Partnership. A council goal for next year is to expand the small business loan program, Bassett said.
The biggest local problem is having space for retail, he said. Approved projects, including Ephesus-Fordham, Glen Lennox and Obey Creek, could add thousands of square feet.
The county probably plays the largest role in business retention, said Aaron Nelson, president of the Chapel Hill-Carrboro Chamber of Commerce. Its Economic Development Office (bit.ly/1J79Umj) has a business retention specialist and small business loan and grant programs. The chamber offers resources, information and connections to its 1,200 members, he said.
Local officials could do a better job sharing information about resources with businesses, Nelson said, but businesses also need to say something when there’s a problem. Residents also have a part to play, he said.
“It’s not been my experience that nationally owned properties care as much about the local businesses as we do,” he said. “Our job has to be, as a community, to help them survive by shopping them, by supporting them, by going there.”
Chapel Hill’s experience seems pretty typical, said Jonathan Morgan, an associate professor in UNC’s School of Government who specializes in economic development.
Larger, more sophisticated cities may run their own business retention and expansion programs, he said, while smaller towns lacking resources and expertise traditionally focus on recruitment, leaving retention strategies to the county, chamber of commerce or a nonprofit corporation.
Small businesses can feel unplugged, Morgan said, because most programs are aimed at larger employers generating more taxes. Communities are employing “economic gardening” as a way to make a big difference for smaller companies with growth potential, Morgan said.
“The idea is that you serve as a clearinghouse for them in terms of connecting them to information about new products and services, connect them to sources for financing and job training,” he said.
The ideal economic development strategy recognizes and incorporates a community’s strengths and assets, he said.
“I think as a part of that, you’ll find ways to shore up potential deficiencies and shortcomings that you have,” he said, “but really it’s about building on strengths; it’s about tying into the things locally that give you some advantage, some competitive edge.”
Learn more about Chapel Hill’s economic development loans and tools at opentobusiness.biz, or call Dwight Bassett, economic development officer, at 919-969-5010.
Orange County’s Economic Development Office also offers resources, grants, loans and tools at bit.ly/1J79Umj. Business retention developer Yvonne Scarlette can be reached at 919-245-2327 or YScarlett@orangecountync.gov.