Friday, July 20, 2007

Central North Carolina Real Estate

My friend Lane Yates is a developer and real estate coach who lives in Cornelius, NC... a suburb of Charlotte on Lake Norman. His wife Sunisay, or Sunny, as her friends call her, is a Charlotte real estate agent, and both are excellent in their fields. Lane has developed a downtown area of Salisbury, NC, called Salisbury Village, and was quoted in the Salisbury Post newspaper. Being rather proud of him (my little brother...teehee) I thought I'd post the article and spread his fame just a little further...

Me, Lane Yates, Sunny Yates

Despite positive signs, local economy pales in comparison to others
Salisbury Post
Date: July 15, 2007

By Mark Wineka and Paris Goodnight

On paper -- the blueprints of developments yet to come -- Rowan County's retail future looks promising.

In Salisbury alone, two Charlotte developers continue to look seriously at building major retail centers. Local officials and businessmen claim the city finally could be on the brink of a commercial explosion.

"It's our time," says Lane Yates, a Rowan County native and developer who has made the busy Cornelius-Huntersville area his home base in recent years.

"Salisbury is due."
Past due would be a better way to put it.

In the past 10 years, while neighboring Cabarrus and Iredell counties have exploded commercially, Rowan County's retail growth has been underwhelming in comparison. Rowan County's rank in retail sales in the state has dropped from 20th to 28th since 1996-97, according to the N.C. Department of Revenue.

Between the 1996-97 and 2005-2006 fiscal years, Rowan County had retail sales growth of 6.5 percent, far below the state's overall retail growth of 42.5 percent. But the most telling numbers lie behind the retail development that has occurred in nearby Concord and Mooresville.
Cabarrus County's retail sales over the same 10-year period grew by 114 percent; Iredell's, by 82.1 percent. It's clear that Salisbury and Rowan County residents have contributed to the growing numbers in those counties.

Preston Mitchell, a senior planner for the city of Salisbury, calls it "leakage."

Rowan County shoppers are spending money in Concord and Mooresville and, beyond that, in Greensboro, Charlotte and Winston-Salem. But it suggests, Mitchell says, that additional retail in Salisbury would be supported by shoppers who are looking for more.

"There is leakage to these other cities simply because they have more to offer," Mitchell says.
The planner is quick to add that city officials are excited about retail developments on the drawing board and feel confident that Salisbury has attractive locations for retail and restaurant growth.

It's not that Salisbury's retail landscape hasn't changed in the past 10 years. Nationally recognized additions have included names such as Outback, Starbucks, Staples, Circuit City, Office Depot, Old Navy, Marshalls, Goody's, IHOP, Comfort Suites and O'Charley's. Numerous drugstores also have been built, including several new Walgreens and Eckerd locations.
Salisbury's downtown remains strong, and the Salisbury Mall and Innes Street Market -- two main retail centers -- continue to have high occupancy.

Belk and J.C. Penney anchor the mall, while Lowe's generates considerable traffic for Innes Street Market. Salisbury has a strong presence of new car dealerships and discounters such as Wal-Mart, K mart, Magic Mart and Big Lots.

Construction projects under way in Salisbury include a new Cracker Barrel next to Interstate 85, a strip retail center next to the Cracker Barrel and a new Gerry Wood Honda dealership on Jake Alexander Boulevard.

But still missing are names such as Target, Home Depot, Dick's Sporting Goods, Hecht's, Kohl's, Sam's Club, Best Buy, Olive Garden, Omega Sports, Farm Fresh, Red Lobster and others.

"I think we might be on the cusp of developing a lot more retail," says John Sofley, management services director for the city of Salisbury. "And most of the people I talk to would rather shop here."

Collett & Associates, a Charlotte retail developer, recently laid out its plans to partner with the Wallace family of Salisbury in building a 358,535-square-foot retail center at Julian and Klumac roads along I-85.

Collett & Associates typically seeks commitments from companies such as Home Depot and Lowes, Target, Belk, Best Buy, TJ Maxx, Dick's Sporting Goods and others. Its plans for the 45-acre tract in Salisbury call for a 130,000-square-foot home improvement store, a 68,000 sq ft department store and six other "major" tenants, not counting several outparcels.

Childress Klein Properties, a shopping center developer also based in Charlotte, has an option on 97 acres of Livingstone College property at Jake Alexander Boulevard and Brenner Avenue.

Key tenants in Childress Klein's other retail developments have included Target, Home Depot, Stein Mart and several different grocery stores. (Its tenant list at Afton Ridge in Kannapolis has included a SuperTarget, Best Buy, Marshalls, Ashley Furniture, Dick's Sporting Goods and Lane Bryant.)

A spokesman for Childress Klein Properties told the Post earlier this year that the Livingstone College property offers enough acreage for a regional type project. To date, the company has made a thorough traffic study of the area as part of its planning process.

Yates, who is developing the mixed retail-office-residential Salisbury Village off Jake Alexander Boulevard, says it will be interesting to see where the chips fall between the two Charlotte developers.

But the end result will be a new wave of stores featuring national retailers, Yates predicts.
It can only help projects such as his, Yates adds. The Charlotte developers have a national book of clients they are going after, and those not drawn immediately to them may turn their attention to Salisbury Village, he says.

"I absolutely love it," Yates says. "Growth spurs growth. It just brings that much more awareness to the town and city."

Rowan County's taxable sales for the first quarter of the year were $67.8 million, according to figures from the N.C. Department of Revenue. That's part of a pattern over the past year that saw sales from the three previous quarters zig-zag from $59.3 million in the final quarter of 2006, $65.6 million from a quarter earlier and $57.9 million from the quarter before that. A year ago, taxable sales were $68.2 million.

The Rowan County Chamber of Commerce provides a quarterly update for its members on such figures, which were called retail sales until the last report. That changed because some activity that isn't classified as retail still shows up as taxable.

The figures went down substantially last year when the Department of Revenue stopped tallying nontaxable sales, which would be from the service industry or fees to doctors or lawyers. Before that, Rowan's retail sales were up to $110 million in 2005.

Sofley, the city's chief financial officer, says retail sales in Salisbury have shown steady improvement since fiscal year 2004, when sales tax receipts were just more than $4 million.
For fiscal year 2007, the city has projected sales tax receipts of slightly more than $5 million and has budgeted sales tax revenues of $5.3 million for fiscal year 2008.

The growth has been steady, yes, but nothing that causes excitement.

"I'm happy that it's growing," Sofley says, "but if you look at local sales tax receipts for Rowan County compared to Iredell County or Cabarrus County, our numbers are definitely lower.
"We're not keeping up percentage-wise."

Mark Vitner, senior economist at Wachovia in Charlotte, notes that retailers in general are seeing a split: high end ones are having much more success than the discounters. Because the discount stores like Wal-Mart are so price competitive, retail sales figures aren't going up as fast and in some cases may be falling because the stores can only make up so much in higher sales volumes.

Vitner says places seeing spikes in pricing are grocery stores and gas stations, which means people end up with less money to spend on items at retail stores. He noticed the last time he was coming to Salisbury that Rowan County had no Target, which he says appeals to a somewhat higher demographic.

"Salisbury is doing better now, but has gone through some lean years," Vitner says. "Charlotte is gradually getting there, but it's going to be a few more years."

He describes how traffic thins out just beyond Concord as he travels north to Raleigh, but he expects things such as the N.C. Research Campus in Kannapolis to have a noticeable effect once it's up and running.

"It's going to help a lot," Vitner says. "It's the best start of any research park in the country. It will have to spill over, people will be moving to High Rock Lake. ... It's just not going to happen instantly."

Dr. Jamie Slate, associate professor of economics at Catawba College, also noted in an e-mail the bright spot of the "nice multiplier effect from the biotech campus to come. Also, we are starting to see some NASCAR-related industry come into play, though the impact of that on sales will be minimal.

He says, "The retail-construction boom across the county line explains why numbers in Rowan lag a bit behind our neighbor. If I am living in Rowan and a brand new Dick's is basically across the line as well as a new Edwin Watts Golf at exit 49, I am more than likely going there for sporting goods and golf gear. My guess is that a portion of the increased retail rates in Cabarrus comes from Rowan citizens. That's a double whammy. We lose and they gain from us."

Slate also says the commuter pattern favors Cabarrus since more people are traveling from Rowan to Cabarrus. Vitner says Cabarrus saw the lion's share of growth coming from Charlotte in the 1990s, but he thinks even that has slowed somewhat.

Rowan County may be next in line for that kind of growth, with such drawing cards as the N.C. Transportation Museum, which has seen investment into it grow slowly but steadily over the years.

"Salisbury is a beautiful town," Vitner says. "The question is when -- some things can't be speeded up that much."

Rowan County's population numbers compared to those in Cabarrus and Iredell counties reflect what has been happening in retail sales. In 1990, Rowan County was considerably ahead of the other two counties in its number of residents. Rowan's population then was 110,605; Cabarrus, 98,935; and Iredell, 93,205.

But Cabarrus experienced a 32.4 percent population growth between 1990 and 2000 and has grown 20 percent more since then. Today Cabarrus' estimated population is 157,176, and Concord is more than double the size of Salisbury in population.

Iredell County grew by 31 percent between the 1990 and 2000 censuses and an additional 18.4 percent from 2000 to 2006. Iredell now has an estimated population of 145,232.

Rowan County grew only 3.2 percent between 2000 and 2006, and has an estimated population today of 134,538.

But Yates believes Salisbury's demographics will be noticed by retailers who have first gone to Concord and Mooresville. If those retail centers on the drawing board pan out, other growth will follow, Yates says.

"It's a monkey-see, monkey-do approach," he adds.

Bob Wright, president of the Chamber of Commerce, says activity is picking up, not just with announcements of developments going in but also in inquiries about the area. Many are from anonymous consultants working for others who are looking for spots ripe to develop along the I-85 or U.S. 70 corridors.

"There's an uptick in that," Wright says. "We hear around town encouraging signs."
He says one recent inquiry came from an out-of-state residential developer looking to put in a "massive investment," but he wanted more information on the retail development end first.
"I share facts about the potential here," Wright says.

The potential has always been there, but the reality is catching up, too.

"In my 12 years here, it's phenomenal," Wright says about the area on both sides of I-85 at Innes Street. "I compare it back then -- dilapidated, rundown buildings. Now look at it."

Wright says the payoff to come is from the money being put into infrastructure along the interstate with more lanes for traffic and sewer lines going in through a city-county partnership. He says other areas are envious of the amount of money being pumped into Rowan County's visible travel areas.

"I think you'll see all sorts of things along the interstate, not to mention along 70," Wright says.

Contact Paris Goodnight at 704-797-4255, or pgoodnight@
Mark Wineka at 704-797-4263, or

Lane and Sunny are expanding their interests to include more luxury Lake Norman real estate now, as the market for that beautiful lakefront area has gone through the roof. Lane and Sunny live directly on the lake, and he tells me there is nowhere in the world he'd rather be...

Lake Norman Sunrise

No comments: