Alexandria's Commercial Heart Pumping Strong

Alexandria's Commercial Heart Pumping Strong

King Street corridor changes but is still thriving.

EDITOR'S NOTE: This is the first of a three part series addressing the changing face of retail in Alexandria with particular emphasis on the King Street corridor.

Looks can be deceiving. That old adage could well apply to the King Street corridor's commercial development and survival.

It appears that there are more and more vacant spaces. The Imaginarium is gone. The Pineapple is gone. BOwhe & PEaRe is gone. And two of the infamous three corners at Union and King streets remain vacant, with the third beginning to stir, piece by piece.

"People saying that we are losing commercial development is just not true," said Eileen Fogarty, director, Alexandria Department of Planning and Zoning. "We've had a whole study done and the facts are just the opposite of appearances."

Fogarty did admit, however, the upper portion of King Street, from Washington Street to the King Street Metro station, is doing better than the lower portion, from Washington Street to the river. But overall, there has been no significant loss of commercial/retail enterprise.

That study, known as the "King Street Retail Study," was completed at the end of 2003, by Development Economics of Washington, D.C., and The Odermatt Group of Berkeley, Calif, in a joint endeavor. It's findings confirm Fogarty's assertions.

The King Street commercial/retail vacancy in 1996 was 152,320 square feet. In 2003, that had risen only 52 square feet to 152,382, according to Randall B. Gross, director, Development Economics. "It's important to realize there are four or five different markets for King Street and they are working in concert," Gross emphasized.

"Those markets are comprised of locals, from both Old Town and other parts of Alexandria, residents from other parts of the metro area, workers who come to Alexandria on a daily basis, and, of course, tourists," he explained.

"This variety of markets is actually one of the strengths of the King Street corridor. Single markets are much more vulnerable to economic variations," Gross said. "King Street and Old Town can be defined in three ways — as a destination, an employment node, and as a tourism draw."

One of the complaints voiced by local residents is that "too many chain operations are displacing long established Old Town stores. "There are two sides to that," Robert A. Odermatt, pointed out. "One is that between 1996 and 2003, there has only been a net gain of three chain retail operations."

This does not take into consideration chain food operations such as McDonald's and Starbucks. "The other side to the chain store observation is that the consumer is changing. They are younger and more accustomed to shopping in chain stores that are found in malls, such as The Gap and Banana Republic," Odermatt said.

IN DEFINING the King Street corridor, the consultants explained this takes in the length of King Street, from the river to the Metro station, and stretches out one block to each side of King Street except at the intersection with Washington Street. There, the study area was extended to two blocks north and south.

"Considering the study area is only a little over a mile from one end to the other, it is an extremely diverse area," according to Gross. "Portions of the street are in the process of repositioning."

Both businesses and consumers were interviewed in depth for the study. Of the 25 businesses questioned, many related their growth to the submarkets, according to the consultants. As for consumers, 50 percent are local residents. Of that number, 70 percent are from Old Town and the immediate surrounding area.

"What came out of the market research is that King Street has almost the optimal mix of retail and commercial," Gross said. "And the chain question is essential to preserving the marketability of King Street."

There has been an increase in office space in the corridor by two percent between 1996 and 2003, according to the study. However, the other major factor is that during that same timeframe, 60 million square feet of new commercial space came on line in the surrounding areas.

"Given that statistic, King Street is definitely holding its own," both Gross and Odermatt insisted. "There has been turnover. But no significant loss of retail/commercial enterprise."

IN CONDUCTING their analysis, Gross and Odermatt chose the following areas for comparative purposes:

*Pentagon Row: 300,000 SF retail, 504 apartments;

*Clarendon Market Common: 260,000 SF retail, 387 apartments, 87 townhouses;

*Shirlington: 143,700 SF retail; and

*Georgetown M Street: Because its physical configuration and mixed uses most mirrored King Street.

Alexandria's Main Street, from river to Metro, was also subdivided into six circular areas, each with a 1,000-foot walking diameter. This encompassed the one block north/south study area. Each of these was designated by its predominate characteristic and assigned specific primary uses. From the river to Metro, they, and some of their characteristics were:

*Historic Waterfront: Tourist destination/tourist retail;

*Government Center: Predominant office use/limited retail . Regional Crossroads: More national stores;

*Independent Retail: Emerging restaurants, household goods, antiques, local serving shops;

*Transitional Commercial: Non retail buildings, mix of small office/retail, service uses; and

*Metro Commercial: Office dominated, service oriented retail/restaurants/hotels.

OFTEN, ONE OF the biggest complaints is parking, although there are 4,289 spaces in three basic categories within the parameters of the King Street corridor. Based on the same 100-foot walking diameters, the parking evaluations of the consultants were:

*Historic Waterfront: Private 79; shared 432; public 16;

*Government Center: private 80; shared 533; public 545;

*Regional Crossroads: private 169; shared 145; public 0 ;

*Independent Retail: private 172; shared 799; public 20;

*Transitional Retail: Private 63; shared 302; public 0; and

*Metro Commercial: Private 173; shared 761; public 0.

Overall, within the corridor, there are 4.3 million-plus square feet of building inventory. Percentage wise this breaks down as: Retail 48; Office 40; Residential 2; Vacant 11.

In the Retail category, that 48 percent breaks down as: Shopper goods 55; Eating and drinking 33; Personal services 7; Convenience 6; and Entertainment none.

Overall, these categories have shown a one percent decline over the study period of 1996 to 2003.

During the period of 1996 to 2003, changes in commercial inventory along King street have amounted to one percent less retail use and two percent more office use, according to the study. There has been virtually no statistical change in the vacancy rate.

PERHAPS ONE OF the most telling statistical analysis in the entire study was that applicable to the Business Survey. It revealed:

*Average years in business: 11;

*Average size by floor area: 4,869 SF;

*Average employees: 12.6 This excluded restaurants with 7.2.

Typical hours of operation:

*Open 10/11 a.m. 95 percent;

*Close 6/7 p.m. 37 percent;

*Close 8/9 p.m. 32 percent;

*Close 10/11 p.m. 16 percent;

*Average rent: $29.87 per SF.

It was noted that the greatest competition comes from two locales, Georgetown and Pentagon City. It also noted there was a "general decrease in the Waterfront District and an increase in the Shopping District." The latter, as defined by the study, is upper King Street, west of Washington Street.

"One of the main problems which needs to be addressed is the disparity between the retail business hours and restaurant hours," Odermatt said. "The stores close early or sporadically while the restaurants remain open much later. This is different in Georgetown. They compliment each other."

AS FOR BUSINESS sources, the study subdivided them as: Alexandria/Old Town, 41 percent; Tourist, 24 percent with the highest share in the Waterfront area; Downtown employees, 19 percent, with the greatest concentration in the Government Center circle; and DC Metro-VA-MD, 16 percent with the highest share in the shopping district.

The key issues for business owners along the corridor by percentages were: Marketing on King Street, 16; Employee parking, 12; Customer parking, 12; City regulatory environment, 12; streetscape/environment, 9; Overall economy, 7; Metro/bus transit marketing, 7; West vs East King Street issues, 5; City services, 3; high rents/Landlord issues, 3; Internal management issues, 3; Other such as traffic enforcement, waterfront vacancies, competition and theft, 12.

Among some of the plus and minus observations made by the report include King Street is a very successful retail district; there is a healthy mix of uses; citywide sales are increasing by 1.2 percent per year while King Street sales growth remains flat; the three greatest attractions to bring people to the corridor are better stores, nightlife/entertainment, and events/markets.

As for tourism, one of Alexandria's largest industries, the report noted demographics and expenditures.

*Number of King Street tourists, 835,300;

*Average expenditures per trip: Eating and drinking, $42; retail, $59 and

*Total tourist expenditure potential: 2003, $48 million; 2008, $57 million, an increase of 20 percent

Finally, the report maintains there are six component integrated marketing themes necessary to maintaining the corridor's viability. They are: cafe and street life; arts and music; an active waterfront; walkable, historic small town; keeping it local, independent and diverse; and a place to live, work, shop and play.