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Retail construction

April 28, 1999|By KERRY LYNN FRALEY

--from Money, 4/25/99

Since the opening of Prime Outlets at Hagerstown last August, Jamie Moyer says she can generally find all she needs to buy at local stores.

Still, the 19-year-old Hagerstown resident welcomes Valley Mall's expansion and the more than 1 million square feet of new stores and restaurants the new Centre at Hagerstown and Crosspoint Shopping Center will add to the local retail mix.

"It's good. It will draw more people here," said Moyer, who works at the still-growing, 318,000-square-foot Prime Outlets, which has gained the county's approval for a third phase.

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Moyer has the right idea, say developers of the various shopping center projects, who consider the boom in retail construction in Hagerstown and its outskirts a mutually beneficial phenomenon.

Having a wide selection of good stores in an area makes it more attractive as a shopping destination, the developers say.

Retailers see Hagerstown as a central location to tap a regional market of hundreds of thousands of consumers in Western Maryland, West Virginia's Eastern Panhandle and Southcentral Pennsylvania, they say.

"Hagerstown has been a center of commerce for the region for a long time. We're simply reinforcing it," said Phillip Ross, whose company is building Centre at Hagerstown, a huge, open-air shopping complex northwest of the Interstate 81-U.S. 40 interchange.

The largeness of Centre at Hagerstown's 675,000-square-foot first phase - set to open in May 2000 with about 40 stores and restaurants - speaks for retailers' strong interest in Hagerstown, Ross said.

There's already interest in the planned 100,000-square-foot second phase, expected to be built within two years, he said.

Prime for development

The Hagerstown area is prime for retail development for a combination of reasons, say developers, retailers, industry watchers and planning and economic development officials.

The reasons include the growth in population and residents' disposable income in recent years, pent-up demand for a greater variety of stores and easy accessibility via Interstates 70 and 81, they say.

The combined population of Washington County, Franklin and Fulton counties in Pennsylvania, and Berkeley, Jefferson and Morgan counties in West Virginia has grown by nearly 9 percent - or 32,211 people - since 1990, according to U.S. Census Bureau estimates.

In the same time, Tri-State households saw a rise in spending money.

Increases in the median effective buying income - essentially income minus taxes - for Tri-State counties between 1990 and 1997 ranged from $4,195 in Washington County to $16,802 in Jefferson County, according to Sales & Marketing Management's annual buying power surveys for those years.

Washington County residents' buying power grew more between 1995 and 1997 than it did between 1990 and 1995, according to the surveys.

Median effective buying income for Washington County households grew $2,063, from $26,272 to $28,335, between 1990 and 1995. From 1995 to 1997, it grew $2,132, to $30,467.

Growth in the retail and service sectors naturally follows other job growth because people with good jobs have more money to spend, said Robin Douglas, regional manager for the Maryland Department of Business and Economic Development.

Consequently, the state economic development agency focuses on attracting manufacturing and technology jobs rather than retail jobs, Douglas said.

"It tends to take care of itself," he said.

In the last few years, Washington County has seen increases in both the number of jobs and discretionary income, said Douglas, who views the surge in retail interest in Hagerstown as a bonus from the area's economic development successes.

"There are a lot more jobs than there were two years ago," he said.

Guided by retailers

The region's population growth, rising income levels and market demographics are among the many things retailers look at when deciding where to go or expand, said Ross, director of development for Petrie Dierman Kughn in McLean, Va.

While America's booming economy has stimulated retail growth in communities across the country, Hagerstown's retail development has lagged behind the local and regional market for more shopping choices, he said.

"The bottom line is Hagerstown has been underserved for the last five years," said Ross, who sees the current boom as a catch-up to demand.

Wesel Boulevard experienced a lot of retail growth in the mid-1990s, but talk of building another enclosed regional mall in Washington County never materialized, said County Planning Director Robert C. Arch.

There also had been talk of expanding the mall and interest from Hecht's in opening a Hagerstown store for some time before those projects got under way, Arch said.

Centre at Hagerstown's very convenient and highly visible location off I-81 provided an excellent opportunity for well-known, large specialty stores like Borders Books and Music, The Home Depot, Circuit City, Pier 1 Imports and PetsMart to move into the market, Ross said.

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