Rolling in retail

WILMINGTON -- If you live in the region or have even just passed through the Port City in recent years, you know what’s coming -- massive amounts of development.

New apartment complexes are sprouting on almost every corner, additional restaurants crop up nearly every week, and businesses moving to town are fueling a need for more office space.

All of the above are being served by mixed-use projects etched out by developers with eye for making the most of what undeveloped land they can still find in Wilmington's dwindling open space market.

The lingering question of whether the region will reach critical mass in any of those sectors is not a new one -- simply listen to the public comments from residents when new development is on the Wilmington City Council’s agenda.

But for the local retail market, the projection injection of new stores and more shopping options than the region has ever seen means the next decade will likely define just how much Wilmington can shop before its drops.

Sheer volume

In the next few years, at least three major new developments are expected to break ground within half-mile of Mayfaire Town Center, the anchor shopping center of Military Cutoff Road.

The Avenue is a $200-million development on 44.5 acres just north of Old Maccumber Station Road with plans for a Westin Hotel, three parking decks, 525 apartments and 116,000 square feet of boutique retails. Centerpoint is a $250-million project on 23 acres at the intersection of Eastwood and Military Cutoff roads that will also include a seven-story hotel, a medical park and 50 to 60 retails shops.

They join the upcoming Arboretum West, just north of Station Road, which will include 3,000 square feet of retail; and the recently opened Renaissance Market directly across from Mayfaire.

As the projects moved through development, residents expressed fears the large-scale projects would cause further congestion along the Military Cutoff corridor, which was given a "F" grade for level of service and sees 41,254 vehicles a day just north of Mayfaire, according to 2017 Wilmington Metropolitan Planning Organization traffic counts.

Closer to the development site for CenterPoint, the roadway already sees 51,425 vehicles daily, according to 2018 figures.

Even beyond the busy Military Cutoff corridor, the Pointe at Barclay off 17th Street continues to unfurl its phased development on the south side of town (though no retail has claimed space yet) and the new owners of Independence Mall are still coordinating a massive renovation of the shopping center that calls for demolition of sections like the former Sears space and a total rebranding as The Collection at Independence. West of Centerpoint, Autumn Hall submitted plans for a new mixed-use development last week, which would also include retail space.

And in downtown Wilmington, both River Place and Pier 33 developments -- now under construction -- have set aside retail space on their ground floors, 32,000 and 20,000 square feet, respectively.

Move south down the Cape Fear River and the RiverLights development is also operating retail space.

'It will take time'

While all the projects seem to be gathering steam simultaneously, experts caution this won’t be a quick process.

“None of these will hit the market at the same time,” said Hansen Matthews, a commercial real estate broker with Maus, Warwick, Matthews and Company. “Even though we are all talking about it right now, you are talking about building out retail space in, arguably, the biggest retail corridor in the southeastern part of the state. It will take time.”

All of the projects will be built in multi-year phases, with some still figuring out the timeline.

CenterPoint announced last week it is aiming to start construction in the first quarter of 2020, while The Avenue has yet to announced its plans. Pre-Hurricane Florence reports from developers of The Collection at Independence eyed a fall 2018 demolition start, but that was delayed. Requests last week for an update from the latter’s developers, including both EMJ Construction and Brookfield Properties Retail Group, were not returned.

Matthews said one reason for the sudden rush of projects could be residual impacts of last decade's Great Recession, when development came to a grinding halt.

“We are well out of the recession now, but these types of developments involve many different things, from being able to acquire the land, to making sure the tenants are coming along, to getting council approval, to settling on a site plan,” he said.

Growth equals development

Still, the concern from some isn’t the prospect of a race to open, but whether the sheer volume of new retail can be sustained by the region.

David Swain is president of Swain & Associates, which is leading the charge on CenterPoint and also developed The Forum, another shopping center along Military Cutoff Road.

He said the significant investment in development projects is a reaction to the population growth Wilmington has seen in recent years and is forecast to see even more of through 2040, when New Hanover County is projected to be home to upward of 240,000.

“In my industry, commercial development follows residential growth -- something Wilmington has and will continue to have in spades,” Swain said.

He said he is not intimidated by the close quarters forming on Military Cutoff. He cited the whispers he heard as The Forum prepared to open, ones that claimed both it and Mayfaire couldn’t survive without one cannibalizing the other.

“But having Mayfaire across the street only increased our profile and made Military Cutoff Road a regional draw for shoppers,” Swain said.

But with more than a few investors and developers looking to cash on Wilmington’s prescribed potential, could it be too much?

“From the real estate perspective, there is always a concern the market will over react when it sees an area of growth,” said Wilmington Mayor Bill Saffo. “When you have a hot market, retailers and companies want to get in on the action as they say and they can bring on too much product at one time.”

Diversity in options

Ultimately, the deciding factor in the retail battles could be diversity in options.

Swain said CenterPoint will seek new tenants that do not already have a presence in the region.

“While offering a unique and exciting opportunity for local retailers that will want to join us as well,” he added.

The Avenue developer Roy Carroll has mentioned that he will seek high-end retailers like Gucci and Louis Vuitton -- premier retailers with whom locals now have to drive to metropolitan centers like Raleigh to shop.

Matthews said these major developments -- even the redesigned Independence Mall -- will struggle to survive unless they have anchor retailers

“Most of these projects will not come out of the ground without anchor tenants,” he said. “You have to have a generator that gets people in off the roads, and brings them in to not just shop, but stay there and shop a little longer.”

Swain is convinced it not simply about a variety of new and exciting retailers, but about identifying and executing a different vision your competitors don’t offer.

“While there are several high-profile projects going on, each one has its own unique feel, focus and timeline,” he said, later adding, “The unique character of each project will likely ensure a wide variety of uses and users throughout the area.”

Preliminary designs for CenterPoint indicate a spacious footprint with a man-made stream winding through the property and a connection to Wilmington’s Gary Shell Cross-City Trail. The Avenue, meanwhile, has in the past touted Mediterranean-style buildings to match its boutique vision.

Mayfaire also is working to retain its status as one of the city's top retail destinations as challengers loom on the horizon. In addition to it retail and restaurant spaces, it has also added different attractions like Flip N Fly Trampoline Park.

“Mayfaire strongly believes in being a good community partner,” said specialty leasing manager and marketing director Paige Coniglio. “We look forward to working with our neighboring developments. It pushes us all to stay ahead of the needs of our ever-changing consumers, by doing so we can effectively draw new in-demand and innovative uses that complement this growing market.”

Win-win for customers

Speaking of the customer, one local retail expert believes more options is a win.

Donald Barnes, a University of North Carolina Wilmington (UNCW) retail professor specializing in customer delight, said the burden of sustaining more rests on the developers and retail tenants.

“I would probably say it is the more difficult test for retailers,” he said. “They need to know who their target market is and how well they deliver to them will decide everything.”

Barnes said more options for similar products and services can actually be an asset to consumers who have a chance to feel out different options.

“For lack of a better phrase, a lot of options trims the fat in the market,” he said. “Some stores are not as efficient and not as focused on customer delight or training. Because they may have been the only game in town for awhile, it is doable. But not when there is more competition.”

But a larger pool of options will also act as a magnet for customers, especially those that live outside the immediate Wilmington area.

“If a critical mass builds, you will see people driving farther distances,” Matthews said. “We already have people from Jacksonville who will come in for a day trip of shopping. We could could see more come in from farther distances.”

Cracks in the facade

But has the region already seen evidence there is a breaking point in the retail sphere?

Last month, two of Mayfaire’s national tenants -- J.Crew and Eddie Bauer -- closed their stores within weeks of each other.

Coniglio said the latter’s space will be Ann Taylor Loft, which will move in later this year. But there are still vacancies in Mayfaire’s existing buildings. A few will be filled by recent announcements like Nest Realty, Lyssa Cakes and Breadsmith.

But is the region’s leading shopping center’s losses a sign for the region as it prepares for a massive expansion? If the coming wave of retail does have a breaking point, Saffo said it likely won't cripple the new developments eyeing long lifes in Wilmington.

"The market will find what the need is," he said. "It always corrects itself over time."

Reporter Hunter Ingram can be reached at 910-343-2327 or Hunter.Ingram@StarNewsOnline.com.

Retail galore

How much retail will new large Wilmington developments bring online?

• Centerpoint: 50-60 retail spaces
• The Avenue: 116,000 square feet of boutique retail
• Arboretum West: 3,000 square feet of retail
• Autumn Hall: 23,873 square feet of retail/residential
• River Place: 32,000 square feet
• Pier 33: 20,000 square feet
• The Collection at Independence: New wing with eight retail pads, 10 restaurant spaces and mercantile store

Sources: Developments; planning documents