ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, January 14, 1996 TAG: 9601120083
SECTION: BUSINESS PAGE: G1 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
Once the racks of clothing are picked bare, the basement lunch counters are scrubbed clean and the cash registers are emptied, Heironimus, after more than 100 years in business, will no longer be a fixture in downtown Roanoke.
As the Jan. 27 closing date approaches the big question remains: What will occupy the 80,000-square-foot space at Jefferson Street and Church Avenue.
The Edgar A. Thurman Foundation for Children, the trust that owns the building, plans to lease or sell it. Beyond that, the options remain open.
And Roanoke joins dozens of U.S. cities facing large structures, former retail anchors, that fall vacant without any obvious future use. Can Roanokers study ideas from other cities that have faced the same dilemma?
One thing is certain: What worked in downtowns of the past often doesn't work anymore.
"The roles of downtown are completely changing," said Michael Beyard, senior director of research at the Urban Land Institute in Washington, D.C., an organization serving the commercial real estate industry.
No longer do residents flock downtown to do the bulk of their shopping. These days, suburban shopping malls have taken the place of downtown department and general stores, he said.
The department stores that have done well in downtown settings are the newer ones that have been located in upscale downtown malls, Beyard said. Cities including Boston, Indianapolis and Los Angeles have experimented with such downtown shopping centers over the last decade, he said, and have enjoyed considerable success.
Matt Kennell, executive director of Downtown Roanoke Inc., said plenty of Roanokers would like to see another big store take the place of Heironimus. But he doesn't foresee that happening.
"I would love to see a big department store open up down there, but I don't think that's the future of downtowns," Kennell said.
Beyard agreed. He could count on one hand the free-standing department stores in the United States, he said, and converting a vacant building into a downtown mall including a department store is a costly process. And even if a mall were to open, a city the size of Roanoke may not be able to support it financially.
"Frankly, I think they're wasting their time if they try to get another downtown department store," Beyard said.
Other cities have turned their department store shells over to urban entertainment companies, that convert the structures into entertainment complexes. The resulting centers vary by location, but most feature some combination of retail superstores such as Niketown, theme restaurants such as Planet Hollywood and entertainment including virtual reality galleries or indoor miniature golf.
This is still a new industry, Beyard noted, and for the most part it has been confined to the largest cities. But as metropolitan areas have become saturated with entertainment complexes, they have begun to spread to medium-sized markets with heavy tourist traffic such as Nashville and Memphis, Tenn.
In cities the size of Roanoke, where the local population isn't large enough to sustain such an enterprise and tourism isn't the area's major moneymaker, abandoned department store buildings often are razed for parking lots or converted into office space.
A plan to convert a vacant portion of the Heironimus building into offices, the idea of a Charlotte, N.C., real estate developer, did surface in 1989. But this never materialized, and the empty space continued to be used for storage.
Downtown Roanoke has an overall office vacancy rate of 17 percent for all types of office space, said Ed Hall, president of Hall Associates, a commercial realty broker. But the vacancy rate for class B office space - which is the type that the Heironimus building would become - is near 29 percent. The rate should be around 6 percent to 10 percent, he said.
"The demand for office space downtown in the '90s has not been what it was in past years," Hall said. Bank mergers and other transfers have eliminated much of the need for offices, he said.
As far as parking is concerned, Beyard said many cities would be foolish to tear down buildings to make room for more garages.
"Almost every city has more than enough parking," he said. "They're confusing the lack of a central parking place with a lack of parking." The very nature of a downtown says that parking will be scattered. Quite often, however, that's used as an excuse to tear down beautiful old buildings, he said.
A better idea for Roanoke may be a mixed-use building - perhaps including retail on the first floor and office or residential space on the upper floors - Beyard said. That's because the market may not be able to support 80,000 square feet of a single enterprise.
Phil Sparks, chief of economic development in Roanoke, said this idea is something that the city already has been discussing.
"We'd have a strong interest in seeing some retail, at least on the lower floors," Sparks said.
Hall sees a problem with converting the upper floors into apartments: lack of centralized parking right around the building.
"People will walk to their office, but they're not so excited about walking with two armsful of groceries," he said.
Developers in Memphis, Tenn., went this route when they decided to renovate a vacant downtown department store. The building, which had been empty for several years, soon will be an integral part of the city's revitalized downtown, said Kevin Kane, president and CEO of the Memphis Convention and Visitors Bureau.
Peabody Place - formerly Goldsmith's, part of the Federated Department Stores chain - will combine 200 apartments with a ground-floor retail base that likely will be boutiques and specialty shops. Memphis residents appear to approve, Kane said. All 200 apartments are spoken for, and a waiting list has been started.
"If you've got a little vision and you've got a little money, you can almost make it more exciting than it was originally," he said.
In Roanoke, some of that money possibly could come from the city or from Downtown Roanoke Inc. Both are involved in developing a downtown plan - Outlook Downtown Roanoke - that will study ways to connect the area west of Jefferson Street, where retailers have been hard-pressed to gain a foothold, to the more vibrant City Market area.
Kennell said the Heironimus building will be one of the consultant's top priorities.
"This isn't to be just a dream," Kennell said. Any recommendations that result from the study will include specific figures on required financing and any possible incentives packages. "We would certainly look at incentives."
Sparks agreed.
"We would certainly take a look at anything that the Thurman Foundation might propose," he said. "That's really a key corner for us, at Church and Jefferson."
If the building were converted from retail to other use, the city would lose its portion of the sales taxes that such a business generates, Sparks said. Real estate and business license taxes would continue to be collected, however.
It could take five - or six or seven - years for the city to see a return on any investment it may make in the building, he said, but no money will be poured into a project that doesn't promise a return.
Alternate sources of funding also may be available for particular projects. If the building were converted into housing for the elderly - which has been done in other cities - then Roanoke could apply for federal money, said Michael O'Brien, chairman of the graduate studies program at Virginia Tech's College of Architecture and Urban Studies.
O'Brien also suggested the space be converted into a small business incubator, a place where budding entrepreneurs could set up shop and receive advice from an organization such as the Service Corps of Retired Executives. In other cities where such incubators have been set up, they have been well supported by the Small Business Administration, he said.
But Sparks, who has been involved with developing an incubator in Roanoke, said having two such projects in the same city likely wouldn't be feasible. Additionally, the downtown building wouldn't be suitable for light manufacturing or research incubation because it lacks loading docks and other facilities. A retail incubator is another idea, but few retail-only business incubators are successful, he said, because of problems with competition.
Scott Gartner, an assistant professor in the College of Architecture and Urban Studies at Tech, offered yet another suggestion: Convert the building into a small-scale meeting center, perhaps in conjunction with the Roanoke Valley Graduate Center, which has outgrown its space on Church Avenue.
Hall, too, suggested this.
"Feasibility is mostly a dollars-and-cents question," O'Brien said. "It's usually not looking for a silver bullet. It's pulling together a number of smaller sources."
LENGTH: Long : 155 lines ILLUSTRATION: PHOTO: After more than 100 years in business, the downtownby CNBHeironimus department store closes Jan. 27. color KEITH GRAHAM
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