Store owners around Montgomery County say keeping older sites fresh is always a struggle

07/13/2006
By LAURA ISENSEE
Copyright 2006 Houston Chronicle

On Friday nights, residents once streamed through the door of Brother's Pizza in Grogan's Mill Village Center in The Woodlands for a slice of New York-style pie. ADVERTISEMENT try{OAS_AD('Middle');}catch(e){} To keep up with the steady flow of patrons, Manny Bekiri, manager of the family-owned pizzeria, would need the help of at least two other pizza guys. "Now I can handle most of it myself," Bekiri said. Over the last two years, his business, which opened eight years ago in the center, has declined between 15 and 20 percent. Bekiri says the decline in traffic at the Grogan's center has coincided with the opening of newer, fancier shops in other areas of The Woodlands. "This is a last dinosaur, the land of the lost," Bekiri said.

Passionate and aggravated about the center's struggles, Bekiri sent out fliers to attract business and has joined with about 20 merchants to form a new association. Together with the Grogan's Mill Village Association, the merchants have launched a community crusade to revitalize the retail center, the first village center developed in The Woodlands. Their ideas for revitalization run the gamut: from making it a WiFi hotspot, to bringing in flea markets or farmers markets, from brighter landscaping and to improving the signs for the center. While the efforts in Grogan's Mill include both traditional and nontraditional ways to revive struggling retail centers, they reflect a strong community spirit. "It's an example of resident-store owner cooperation and working together that I'm not aware of any place else. I think that is the unique feature of it," said Bruce Cunningham, president of the Grogan's Mill Village Association. "The community has come behind the stores, and said, 'Hey, we want you to be part of our community where we can go to and shop,' " he said.

The efforts in Grogan's Mill could prove to be an example for other retail centers around Montgomery County hoping to revitalize. More retail in the area has only increased the competition. More than 3.6 million square feet of retail space was built in Montgomery County in the 1990s, and about 2.2 million square feet of retail was created in 2000 and beyond, said Kathryn Koepke, manager of marketing and consulting with O'Connor and Associates, a Houston-based real estate service company. An additional 1.18 million is under construction in the county and another 108,000 square feet of space has been proposed, Koepke said. Koepke said the older retail centers generally have lower occupancy rates and lower rents while newer ones have higher rents and occupancy rates. Overall, there is a strong demand for newer and prettier retail centers, she said.

Retail centers built since 1990 and ones proposed or under construction have occupancy and preleased rates of above 90 percent and may charge up to double the rent of an older center, according to research done by O'Connor and Associates. Older centers built before 1990 have occupancy rates that range from 71 to 97 percent and may charge lower rents to keep them filled. The tremendous growth of newer space impacts the older centers, said Jack Friloux, president of Investar Real Estate Services, which manages the Conroe Shopping Center on the northeast corner of Loop 336 and Interstate 45. "Of course, the more people you have, the smaller slice of the pie you're going to get in terms of tenants and retailers," Friloux said. However, the increased growth of new retail could create more opportunities for others, said Greg Slusky, assistant vice president of the Houston commercial retail division of the Weitzman Group. He leases the Pine Hollow Shopping Center, built in the 1980s and located in the southeast corner of Loop 336 and Interstate 45 in Conroe. "With more retailers coming into the market place and newer shopping centers, it creates an opportunity for other retailers who can't afford the first-class, grade A, prime retail. It gives them another opportunity to come into the market as well," Slusky said.

More than 30 years ago, Grogan's Mill Village Center opened as the first of the village centers in The Woodlands. Named after the original Grogan-Cochran Lumber Co. mill once located on the property, the center originally offered Jamail's, a Houston-owned food store, an ice-skating rink and other small shops. Robert Resor said years ago, he took his son to skating classes at the center and to the Fourth of July events on the lake behind the center. He said he still likes the center's hometown feel. "Most of the people are real nice and friendly," Resor said. One sign of the struggle has been store turnover, in particular of its grocery store anchor, which has changed several times - from Jamail's to Gerland's, to Albertson's to the family-owned Randalls, which was later bought by Safeway. "It was busier then than it is now because you didn't have all the alternatives," Cunningham said. "It looked very much like it does today." The property itself, originally owned by The Woodlands Development Co., also has been sold several times. The current owner, Landmark Pacific, based in Nevada, bought the property early this year. Kelly Barry, senior property manager with PM Realty Group, which manages the center for the landlord, reassured residents at a recent village association meeting that the new owner is in for the long haul. "He's not here to buy and sell in a couple of years. He's looking at things to make some changes and make improvements," Barry said at the meeting. "But it takes time to build up some capital."

Many store owners in the Grogan's Mill Village Center believe the new Market Street area of The Woodlands and the other newer shopping centers have contributed to the center's decline. Other reasons include that it doesn't have a strong draw to attract patrons and the signs don't help the layout , which sets the majority of the shops far from the street, Cunningham said. Nick Ransford, leader of the recently formed merchants association, said Market Street is a primary factor, because of its wide range of shops, large H-E-B grocery store and higher visibility and proximity to the Cynthia Woods Mitchell Pavilion. Harold Dull, general manager of the Market Street retail and entertainment complex, said the open-air development is different than village centers. "Most of village centers were built as local shopping strip centers. It's for that community whereas we hope we have a much larger draw," he said. Since opening in late 2004, Market Street's retailers saw average retail sales of $350-400 per square foot last year for a total sales revenue of $160 million for the 400,000-square-foot center, Dull said. "Our business success is not dependent on taking business away from other village shopping centers. We have a completely unique shopping experience and very exclusive stores that you don't have in the county or even in Houston," he said. Grogan's Mill store owners, however, are still worried about loss of traffic because of newer developments, including the plans for a new Wal-Mart nearby and the closing of the Woodlands Athletic Club, scheduled to be phased out in 2008. "It's almost like Grogan's Mill is in the middle of a big battle," Bekiri said. "It's like we're being crushed on both ends. We have Market Street on one end, Wal-Mart coming on the other, in the middle of both of that we're going to get crushed," he said.

Cunningham and Nick Ransford, manager of the Beverage Shoppe liquor store and leader of the recently formed merchants association, have spearheaded the revitalization efforts in Grogan's Mill. The pair seems an unlikely duo. Dressed in seer-sucker slacks and a blue monogrammed shirt, Cunningham, 70, meets with Ransford, 24, who sports highlights in his hair, black jeans and a belt covered with metal. Together they have been brainstorming and drumming up innovative ideas from residents and store owners. While Cunningham has a professional background in marketing, Ransford is new to the field. "I'm getting a crash course (in marketing). I'm the one who spends quite a few hours a week going over online, looking at different things shopping centers have done online," said Ransford, who then studies which ideas would work at Grogan's Mill. One idea that Ransford thinks would work well is to add more colorful and brighter landscaping. Bekiri and Cunningham think installing a free wireless network, called WiFi, would bring back traffic. It would also make Grogan's Mill the first village center to have the amenity, which Market Street now offers.

Dull said the first step in revitalization is to take a look at the mix of retail and see if it is what the market demands. Other steps include the attractiveness of the development and the overall shopping experience. Some ideas include bringing in special events, like a farmers market, dog or flower show or flea market. Ransford envisions hosting a public safety day with the nearby taekwondo center and with fire trucks to draw families with children. Improvements to the signs for the center are also at the top of the list, Cunningham said. "Unless you live right nearby here and have lived here for years ... you could drive right by and never notice it," Cunningham said. Barry said she and the landlord are trying to improve the interior signs of the center to help patrons find tenants within the center. Two recent additions - a new hair salon and nail salon, which replaced two failed donut shops - have added to the hopes at Grogan's Mill. And faithful customers like Resor, who still does 80 percent of his shopping at the center, keep coming. "I'd like more people to make sure it stays in business, because if they don't have enough customers, they won't stay in business," Resor said.

Laura Isensee can be reached at laura.isensee@chron.com