Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

Tag: retail

Norfolk eyes $18M purchase of MacArthur Center mall

Read update: Norfolk City Council votes to buy mall

Norfolk City Council will discuss acquiring the struggling downtown MacArthur Center mall for $18 million during a special meeting Wednesday.

MacArthur Center is owned by Wells Fargo & Co., which holds the mall following a loan default by the mall’s previous owner, Connecticut-based Starwood Property Trust.

“We recognize the center is an important component of our downtown,” Norfolk Mayor Kenneth Cooper Alexander told Virginia Business. “The purchase will enable the city to take an active role — an active and strategic role.” In the short term, the mayor emphasized, MacArthur Center would continue operating as a mall, and the city would have discussions with the mall’s tenants. The transition would be “seamless,” Alexander said.

The mall was listed for sale in January by JLL, though no price was listed at the time and no buyers materialized.

The agenda for Wednesday’s meeting includes an ordinance ratifying an operating agreement between MacArthur Center Acquisition LLC and the city. It also seeks approval from the council to ratify a consulting agreement between the city and GEI Advisors Inc., a consulting engineering and environmental firm.

A sale price for the mall is not listed, but the agenda also includes an item seeking council’s approval to appropriate a total of $18 million for the purchase: $12 million from the city’s unassigned general fund balance reserve, up to $3 million from its capital improvement fund and up to $3 million from the land acquisition fund.

The most recent assessment of the mall was about $25 million — about $20.7 million in land value and $4.2 million in improvement value, according to city records. That’s down significantly from its July 2022 assessment, when it was valued at $51.8 million, including $24.8 million for the land, according to city records.

The mall is now 62% vacant, according to JLL. Starwood Property Trust bought the mall in 2014 for $265.5 million from Michigan-based Taubman Centers Inc., as part of the $1.4 billion purchase of seven shopping malls. However, Starwood defaulted on a $750 million loan in 2019, and MacArthur Center is now owned by Wells Fargo & Co. and managed by Syracuse, New York-based Spinoso Real Estate Group. The city owns the land the mall sits on at 300 Monticello Ave. and has a leasehold interest.

The 23-acre mall property includes 914,751 square feet of leasable area. Current mall anchors are Dillard’s Inc., with 253,616 square feet, and Regal Cinemas, with 80,210 square feet. Another 160,000-square-foot anchor spot is vacant. Those three anchor spaces account for 493,826 square feet, or about 54% of the total space at the mall, which also has a multistory parking garage with about 4,000 spaces.

Built in 1999, the mall has lost many of its tenants, including anchor Nordstrom in April 2019, after 20 years. An Apple Store left in 2021 and more recently, restaurants Texas de Brazil and California Pizza Kitchen departed.

Amazon begins HQ2 move-in

Amazon.com Inc. is moving more than 8,000 employees into the first phase of HQ2, its $2.5 billion East Coast headquarters in Arlington’s emerging National Landing area, this week. The e-tailer plans to officially open HQ2’s first phase, Metropolitan Park (Met Park), in June and to complete its move-in by the end of the summer. However, the No. 2-ranked Fortune Global 500 company said in March that it was delaying construction on HQ2’s second phase, PenPlace.

Amazon expects to create 25,000 jobs for the project by 2030 and is eligible for up to $550 million in state grants, should it meet the required annual hiring goals and average annual wages.

“This project is extraordinary in many respects,” Arlington County Board Chair Christian Dorsey said in a statement. “It will bring us significantly closer to fulfilling the community’s vision of Arlington and National Landing as an urban neighborhood with a better balance of office, residential and retail development, more and better public spaces and more and better access for pedestrians and cyclists.”

Met Park consists of 2.1 million square feet of office space and more than 50,000 square feet of retail space housing 14 businesses, as well as a 2.5-acre park. The campus is on park to receive a LEED Platinum certification, the highest LEED certification level.

Met Park’s two 22-story, 327-feet-tall office buildings can house 12,500 employees. One tower is named Jasper, the codename for an Alexa component that provides tools for customer settings. Amazon has named the other tower Merlin, after the codename for Amazon QuickSight, a cloud-based business intelligence service product that can create interactive dashboards. The buildings have a total of 62 elevators.

A street view of Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
A street view of Met Park. Photo courtesy Amazon.com
An aerial view of outdoor space within Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
An aerial view of outdoor space within Met Park. Photo courtesy Amazon.com Inc.
A terrace in Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
A terrace with grills in Met Park. Photo courtesy Amazon.com Inc.
An entrance to the first phase of Amazon's HQ2, Met Park. Photo courtesy Amazon.com Inc.
An entrance to Amazon’s HQ2 offices. Photo courtesy Amazon.com Inc.
A stairwell and escalator inside Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
A stairwell and escalator inside Met Park. Photo courtesy Amazon.com Inc.
A reception desk in Amazon.com Inc's HQ2. Photo courtesy Amazon
A reception desk in Amazon.com Inc’s HQ2. Photo courtesy Amazon
An employee gathering space in Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
An employee gathering space in Met Park. Photo courtesy Amazon.com Inc.
An outdoor terrace in Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
An outdoor terrace in Met Park. Photo courtesy Amazon.com Inc.
Snack and beverage options in Met Park
Snack and beverage options in Met Park. Photo courtesy Amazon.com Inc.
A presentation room inside Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
A presentation room inside Met Park. Photo courtesy Amazon.com Inc.
A seating area in Met Park, the first phase of Amazon's HQ2. Photo courtesy Amazon.com Inc.
A seating area in Met Park. Photo courtesy Amazon.com Inc.
A seating area in Met Park. Photo courtesy Amazon.com Inc.
A seating area in Met Park. Photo courtesy Amazon.com Inc.

The towers include “centers of energy,” Amazon’s term for spaces for employees to gather, including four coffee shops and three all-electric commercial kitchens. The areas are designed to handle 30% of the offices’ employee capacity, an intentional move by the company to encourage employees to “venture out into the neighborhood,” according to a news release.

The 14 ground-floor retailers include a bike shop, a dog day care, a fitness studio, an early childhood education center, a spa, restaurants and the Museum of Contemporary Art (MoCA) Arlington’s Innovation Studio.

The towers have outdoor spaces within their designs: about 2.7 acres of rooftop landscaping, about an acre of green roof with native plants, two event terraces, two café terraces, one garden terrace, an urban farm and outdoor kitchens.

The public park includes walking paths, a dog run and a children’s play area and garden.

For commuting employees, Met Park has 620 bike racks, four levels of below-grade parking with 290 electric vehicle charging stations and pedestrian pathways for employees taking the Metro. On May 19, the Washington Metropolitan Area Transit Authority opened the Potomac Yard-VT station, anchored by Virginia Tech’s $1 billion Innovation Campus and two stops away from HQ2.

Two retail, office buildings in Chesapeake sell for $3.1M

Two buildings with retail and coworking spaces on South Military Highway in Chesapeake have sold for $3.1 million, Cushman & Wakefield | Thalhimer announced Monday.

The 38,800-square-foot and 10,000-square-foot buildings sit on 4.7 acres at 2211 S. Military Highway. The property’s 31 tenants include Amazon.com Inc., FedEx Corp., U-Haul and Laundry Land.

Advisory Investments LLC purchased the property from Chesapeake Virtual Offices & Property Rentals Inc. and plans to allow tenants to lease monthly or annually and to maintain coworking space at the site. Janet Whitbeck with Cushman & Wakefield | Thalhimer represented the seller.

Charlottesville car dealerships acquired

Flow Automotive Cos. has completed its acquisition of five Umansky Automotive Group dealerships in Charlottesville, the company announced April 18.

Terms of the deal were not disclosed.

Flow’s acquisition includes locations selling Honda, Toyota, Subaru, Mercedes-Benz, Chrysler, Dodge, Jeep and Ram automotive brands, according to a news release. Flow currently has dealerships representing Audi, BMW, Mazda, Porsche and Volkswagen brands in Charlottesville.

“For the last 50 years, our family has had roots in Charlottesville and with the University of Virginia. We are grateful and excited for the opportunity to expand in Charlottesville and create a unique customer experience in a community that is so important to us,” Don Flow, chairman and CEO of Flow Automotive Cos., said in a statement.

Founded in 1957 in Winston-Salem, North Carolina, Flow has expanded to nine cities throughout Virginia and North Carolina, with 53 franchises representing 27 brands.

Rain and wind delay Something in the Water’s start

Rain and high winds delayed the start of Pharrell Williams’ Virginia Beach music festival Something in the Water by about four hours Friday, leaving fans and businesses waiting for the weather to clear.

Scheduled to start at 12:30 p.m. Friday, the festival was delayed until 5 p.m. Instead of being filled with throngs of music fans as expected, the Oceanfront area was quiet all day Friday, except for the presence of workers at the festival site between Second and 17th streets.

“You can tell there’s activity happening, but there’s no crowds of people yet,” Kate Pittman, executive director of the Vibe Creative District, said Friday afternoon.  “Everyone’s staying home.”

“The weather’s definitely dampened spirits,” Virginia Beach Restaurant Association Executive Director Martha Davenport said Friday afternoon during the delay. “You can’t predict Mother Nature.”

Nevertheless, there appeared to be a figurative rainbow at the end of the rainy day, with Virginia Beach Hotel Association President John Zirkle Jr. saying that “we’ve seen some last-minute pickup” in hotel business. Area hotels were at 85% occupancy on Friday and were expected to sell out on Saturday, said Zirkle, who is also corporate director of operations for Harmony Hospitality and general manager of the DoubleTree by Hilton Virginia Beach.

Norfolk International Airport Executive Director Mark Perryman said there was an uptick in activity at the airport this week ahead of the festival, with about 14,000 passengers coming and going on Thursday, up from regular travel patterns. He noticed a few more corporate jets than normal, as well. Perryman advised the businesses within the airport to be prepared with additional staff and stock, and he expects that Sunday and Monday will be busier than normal, too, as festival attendees head out of town.

For businesses on the ground, such as local restaurants, much of the three-day festival’s success will depend on “the weather and the enthusiasm of the people,” Davenport said Thursday. “If the weather’s good or decent enough, people are going to come.”

Andy McGinley, owner of Richmond-based Momma’s BBQ, which was set up in the festival grounds, said the rain delay didn’t bother him, and he still expected to make plenty of money. “People paid too much for these tickets to skip it for a little rain,” he said. “We’re here and ready to go. [The crowd] is gonna go from zero to 60.”

Next to Momma’s BBQ was Cups Up, a food truck based out of Virginia Beach’s Beach House 757 on 19th and Atlantic. “This is probably the biggest festival we’ve worked so far,” said Chef Breed Mathews, who predicted his truck’s revenue will “probably go through the roof.”

Andy McGinley, owner of Momma’s BBQ in Richmond, was ready for a crowd Friday at the Something in the Water festival.

A manager at Beach Bully BBQ, located a few blocks from the Oceanfront on 19th Street, was just happy the roads around the restaurant weren’t blocked for Something in the Water this year, as they were when the event debuted in Virginia Beach in 2019. Around lunchtime Friday, manager Cino Farrales wasn’t too worried about the inclement weather keeping away customers who might have come from the festival. “We are hoping for a big crowd, but [from] our past experience with Something in the Water, we had nothing,” Farrales said.

At Lost Planet, an interactive art museum on Atlantic Avenue between 19th and 20th streets, business was slow Friday because of the weather, but manager Shaniqua Lyons was hopeful that traffic would pick up over the weekend. “We think it’s pretty cool to see people come here,” she said, adding that SITW “brings a lot more people to Virginia Beach in a positive way.”

A few blocks down, at Lotus Fashion, manager Vicki Kowalczyk said the last time SITW was held in Virginia Beach, business was slow, but she hopes this year will go better. She noted however that festival attendees are more likely to spend their money on food and beverages than on retail shopping.

Pittman said that the festival was incorporating and collaborating with a lot more businesses this year, with events and presences all the way up to 31st Street.

The weather outlook for the rest of the festival appears better. Eswar Iyer, a National Weather Service meteorologist based in Wakefield said that while Friday’s weather had seen wind gusts of 15 to 20 miles per hour — below a threshold that would present a danger to performers or audience members — Saturday’s forecast is expected to be sunny, with highs in the 70s. However, there is a possibility of showers in the afternoon Sunday, the festival’s final day.

Old Town Business league to upgrade or dissolve

Carla Clarke credits Old Town Business (OTB) league with arranging events that bring new faces into Today’s Cargo, the jewelry and gift shop she co-owns on Alexandria’s King Street.

“It’s bringing new people through your door,” says Clarke.

The 40-year-old nonprofit business league champions Old Town’s business community through events like an annual cookie crawl. It has served as a liaison between local businesses — mostly small busineses — and the city. During the pandemic, it arranged vaccine clinics for local businesses.

Membership in OTB has grown from about 40 businesses in 2019 to about 160 today. Given its recent successes, OTB is seeking to become a business improvement service district (BISD).

The Old Town Business-Business Improvement Service District (OTB-BISD) would represent about 500 businesses along King Street, from the King Street Metro station to the Potomac River. Funded by a $0.10 service district tax levied per $100 of assessed valuation, the OTB-BISD would have a budget of nearly $1 million and be overseen by three employees and a board of directors. OTB currently has a board and CEO and a budget of about $150,000 but depends on volunteers, dues and donations.

“That’s not sustainable because we can’t count on those dollars,” says OTB board member Amy Rutherford, owner of two Old Town businesses, The Red Barn Mercantile and Penny Post.

In addition to taking over more than 20 annual events run by OTB, the district would create a unified brand, develop ambassador and business mentorship and networking opportunities, and advocate for district businesses.

To meet Alexandria City Council’s guidelines for establishing a BISD, which were enacted last year, OTB must get 60% of commercial property owners to approve a petition for the proposed designation, as well as City Council’s approval.

OTB has campaigned for support, holding listening tours and public hearings. By March 31, nearly two-thirds of the 60% of required property owners in the proposed district indicated approval of the petition, which is due to the City Council by May 31. If the OTB-BISD is not approved, OTB will be dissolved, Rutherford says, citing sustainability concerns.

Visit Alexandria, the city’s nonprofit tourism organization, supports OTB’s efforts. In a statement to Virginia Business, Visit Alexandria President and CEO Patricia Washington says the BISD “is critical for Alexandria to retain its current level of visitation that supports our local restaurants, shops and hotels.” 

Fed Fifth District economy shrinks slightly

The economy in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) has contracted slightly since March, according to the latest edition of the Federal Reserve’s Beige Book, released Wednesday.

Published eight times per year, the Beige Book is based on anecdotal information about economic conditions gathered from the 12 Federal Reserve Banks. It is compiled from reports by bank and branch directors, as well as information gathered from business contacts, economists, market experts and other sources.

Here’s what the April 19 Beige Book edition revealed about the direction the economy is taking:

Manufacturing activity softened as manufacturers had fewer new orders, and customers began pushing back on price increases as supply chain pressures eased. Employers continued to struggle to find skilled workers.

Travel and tourism spending increased moderately in the region. The sector saw strong revenue growth, with hotels reporting increases in the number of rooms sold and higher room rates compared with last year. In February, Virginia hotel revenues were 14.9% higher than those recorded in February 2019.

Ports and trucking companies in the Fifth District reported declining freight volumes, especially in imports of retail goods and household items. Exports of loaded containers were stronger, though, particularly in auto and machine parts. Empty containers remained at ports slightly longer.

Because shipping carriers had excess availability, their spot rates fell to pre-pandemic levels or below, significantly under contract rates. Airfreight rates stabilized as airlines pulled back on freight capacity, according to the Fed.

Trucking companies saw a moderate decline in freight volumes and received some customer pushback on continued rate increases. Firms continued to add drivers but scaled back recruiting because of the lowered freight volumes. The supply of new tractors and trailers improved.

The Fifth District’s employment increased slightly compared with its March report, although respondents reported a continued lack of qualified workers. Wages increased modestly, partly because Virginia, Maryland and Washington, D.C., increased minimum wages.

Prices in the region continued to grow at a strong rate, the Fed reported. Manufacturers reported average price increases of about 5.5%, down from the 2022 peak, and service sector firms reported prices increases of about 6.5%, a near-peak rate.

Retail activity remained strong, although firms reported slightly lower sales and demand. Some retailers said they expected business to pick up soon, as their busy seasons started in April.

The typical spring housing market did not appear. Sales and pending sales in the Fifth District residential real estate market declined, and sales prices remained flat, although respondents began seeing new contracts at less than list price. Housing inventory has decreased year-over-year, and new listings have dramatically decreased. Although construction costs were down, builders did not buy new lots because of economic uncertainty.

Commercial real estate activity declined overall last month, particularly in the office market. Retail and industrial/flex space leasing, however, remained strong, and the industrial sector had higher rental rates. Sales slowed due to rising interest rates, and some banks stopped lending for new commercial construction projects or tightened underwriting standards.

Demand for all types of loans slowed modestly, but the commercial loan portfolio was the weakest. The region saw mixed demand from consumers, but demand for home equity and used auto loans increased some.

Deposit levels declined slightly, although some banks had an inflow of deposits following Silicon Valley Bank’s collapse. Financial institutions expected loan and deposit levels to decline moderately for the rest of the year, according to the Fed.

Retail/office collection in Richmond sells for $6.3M

A combined 15,994 square feet of retail and office buildings in Richmond’s West End area sold for $6.3 million in late March, according to Cushman & Wakefield | Thalhimer.

The buildings are located at the corner of Grove and Granite avenues, at addresses 5701-5707 Grove Ave. and 124 Granite Ave. About half of the buildings are leased, and tenants include On U Jewelry, Scents of Serenity Organic Spa and Victoria Charles Jewelry, according to Reilly Marchant from Cushman & Wakefield | Thalhimer, who represented the seller.

KLCN LLC purchased the portfolio from Muhleman Properties LLC. The sale closed on March 31, according to property records.

Chesapeake Walmart to reopen after deadly shootings

Walmart Inc. announced Monday that the Chesapeake store where a night manager killed six workers in November 2022 will reopen April 19, following a 9 a.m. ceremony. The store has been remodeled over the past five months, and it will include an outdoor memorial space, according to Walmart.

On Nov. 22, 2022, 31-year-old Andre Bing, an overnight supervisor who worked at the 1521 Sam’s Circle store since 2010, shot and killed six employees, including a 16-year-old boy, before killing himself. There were about 50 shoppers in the store at the time of the attack.

The estate of one victim, Randy Blevins, has sued the Bentonville, Arkansas-based mega-retailer for $45 million in a wrongful death lawsuit, and three surviving employees filed three $50 million lawsuits against the company, claiming that Walmart was negligent in continuing to employ Bing after the three employees reported “bizarre and threatening behavior” by the manager.

The memorial space will include six seating structures in honor of the victims, and the indoor remodel will include more shopping options, displays and interactive features, according to Walmart’s announcement.

“We are deeply touched by the community’s compassion and support as we continue to heal from last year’s tragedy,” Alycia Mixon, manager of the Chesapeake store, said in a statement Monday. “As we move forward with our reopening, we do so in a way that honors the victims and provides continued support to our associates.”

Coffee biz buys Newport News building for $1.1M

A coffee company purchased a 2,400-square-foot retail building in Newport News for $1.1 million with plans to turn it into a coffee shop.

Seven Cities Coffee LLC, doing business as 7 Brew, purchased the building located at 398 Denbigh Blvd. from JMP Properties LLC, Cushman & Wakefield | Thalhimer announced.

The coffee company, 7 Brew, is a national chain and has dozens of locations. It’s known for its drive-thru business model. According to the company’s website, this would be the first location in Virginia.

Wick Smith, of Cushman & Wakefield | Thalhimer, handled sale negotiations on behalf of the seller.