Lynchburg Business

Planned Communities: Are They Worth It?

Issue: March 2010 by Mitchell Malcheff in Cover Story, Inside The Magazine, Real Estate

The Muse is busy today. Six people are in line and the tables are full. A couple perches at a table in the balcony above the crowd, pecking away at their Macbooks and occasionally looking for a new song on their iPod. The popular coffee shop fronts Enterprise Drive in the heart of Wyndhurst and is just a scone’s throw away from The Summit retirement center. Since it opened in 2008, The Muse has joined a number of successful businesses in Wyndhurst. In 2001, when Wyndhurst opened its doors for business, the idea of a planned community that incorporated both commercial and residential space was a novel one for the area. Those with an entrepreneurial spirit flocked to Wyndhurst with eager ideas and open checkbooks.

However, for every success story in Wyndhurst, there have been chapters that didn’t end well for other ventures. Nine years have flown by since Enterprise Drive began to ferry travelers past a commercial center filled to capacity. Today, some of those original businesses have survived, but commercial spaces sit empty—more than 25 out of the 140 or so spaces. Undeterred, many of those involved in Wyndhurst’s planning are already waist-deep in their next ventures: Cornerstone on Greenview Drive, as well as Downtown Moneta near Smith Mountain Lake. Time will tell if those projects are successful, but the question still on the minds of many is, “Are Lynchburg-area planned communities worth it?”

They were for Mark Borel. As owner of Borel Construction, he was part of the original planning team for Wyndhurst. Now, along with son Marcus, who graduated from Virginia Tech in 2007, Borel is hard at work on both Cornerstone and Downtown Moneta. The idea of a traditional neighborhood development, of which all three Borel projects are, was something that he had no previous experience with.

“Nobody in the city had done a project this big,” Borel said. “It was definitely something new to the area, so it was uncharted territory.”

Turning 400 acres of cow pasture into an area that now has a population of somewhere between 1,400 and 2,000 required a concerted effort from both the City and private investors. Bill Jamerson was the driving force behind the project, which required Lynchburg to write an entirely new zoning ordinance. The idea was a simple one—a family-oriented, pedestrian-friendly community that would combine the charm of small-town living with the convenience of bigger-city shopping. Inherent in that design plan, though, as the developers discovered, was a commercial zone that would have to operate apart from any sort of big-box anchor store, like Wal-Mart or even a small grocery store. The result was a group of retailers expecting foot traffic that never materialized.

“We have found it’s hard to have a successful retail place without a strong anchor,” Marcus Borel said.

Not that it has always been that way. Early on, there was a pseudo-anchor in Neighbor’s Place Market. The restaurant and deli was operated by the same owners of The Neighbor’s Place, one of Wyndhurst’s more notable success stories. When the Market closed, foot traffic markedly declined, according to Ken Burger. Burger, the executive director of The Summit and another of Wyndhurst’s original planners, echoed Marcus’ sentiment about the community’s need for an anchor.

“If we had an anchor, like a Trader Joe’s, that would be absolutely marvelous, but if we had an anchor like a Wal-Mart that would change who we are,” Burger said. “If we had planned a little more carefully, and put a restaurant here and found a way to do a Trader Joe’s or even found a private developer to do a Trader Joe’s kind of store, and then circle retail around that, yeah, I think that would have helped immensely.”

Burger’s reference to the need for something like a Trader Joe’s, a popular grocery store specializing in organic offerings, is part of a telling story about Wyndhurst’s beginnings. Burger acknowledges that having a grocery store or other large retailer would have been difficult but not impossible. According to Mark Borel, a minimum of two acres would be needed for a large retail outlet. With this kind of space now lacking, Burger does wish that better planning had gone into the commercial side of Wyndhurst. Early on, there was little consistency between the more than a dozen different property associations, and he believes there was a need for a small staff to promote the area as well as target retailers who could have been successful.

Instead, the retail was literally a free-for-all, with each commercial space placed into a lottery and doled out accordingly to different developers. Melissa Taylor’s travel agency, Travelbugs, was one of the first businesses in Wyndhurst and, like Burger, Taylor said that the lack of consistency was immediately apparent, though it was of little concern.

“At the time, it didn’t really matter. Wyndhurst was going to be wonderful, every single shop was going to turn to gold, so no one really cared whether they were on the front line or in the back,” said Taylor.

Taylor was eventually forced to leave, not because of lack of business, but because of the need for more space after experiencing a 200 percent growth rate every year while in Wyndhurst. Though Taylor wasn’t struggling, many were.

“The biggest problem was a lot of the business owners were moms who were starting a small business, and they couldn’t be there late at night. They had to play ‘Super Mom’…and they weren’t willing to be open at night, which was when retail needed to be open.”

Taylor believes that had some of the owners been able to survive longer, they may have found their feet. However, the three-year leases that were common became a deadline that most couldn’t meet.

“We tried too much in a small amount of time, that people just said, ‘Forget it, I can’t keep up with that,’ instead of…saying, ‘Here’s what we’re going to do and we’re going to do it from the start and we’re going to do it consistently and it will work,’” Taylor said. “It was a new idea and everyone was trying things to see what would work and it turned out to be pretty devastating for all the businesses there.”

Despite the mixed success on the commercial side, the assortment of condos, townhomes and single family homes sold well and continue to do so, much like what is happening at Cornerstone, which is full. Located on the newly improved Greenview Drive, the location has proven to be attractive to students and seasoned Lynchburgers alike. According to Borel, the lessons learned from Wyndhurst were instrumental in the planning of Cornerstone. His three main concerns regarding Wyndhurst were the lack of an open space for community gatherings, a commercial sector that was too spread out and a balance of residential and commercial that leaned too heavily toward commercial.

In response, the 125-acre lot that encompasses Cornerstone includes a park, complete with a playground and walking trails, as well as a heavier emphasis on residential space. Though the commercial space has not been constructed, the plan calls for one strip of commercial spaces that will essentially split the community in half. Realty Group realtor Tina Friar says the promise of future retail space has been a selling point.

“That’s going to be a little different from what we’ve seen at Wyndhurst…it’s going to have the Main Street, USA, kind of feel to it. There’s a middle section that has trees, so the shops will be to the left and right of that, and it’s only the one street,” Friar said.

Martha Brown, also of the Realty Group, says that retailers will be recruited to fill the commercial space that will appeal to the Cornerstone lifestyle of convenience.

“We’re recruiting retailers that would be interested in appealing to the younger audience—pizza parlors, nail salons, hair salons. I think the two things that would be ideal to offset the neighborhood and bring it together would be a bank and convenience store,” said Brown, though no plans are in place for any specific retailers.

Borel’s third project, Downtown Moneta, has struggled commercially as well. Route 122 splits the property, dividing the commercial and residential sectors and is a perilous crossing for foot traffic. The main problem has been the lack of a steady base of support because of Smith Mountain Lake’s community, which is comprised of many summer-only residents.

“The problem the Lake has is, you’ve got people four months out of the year, but for eight months, you’re sucking wind,” Borel explained.

Looming over all three projects is an economy that bottomed out quickly, taking property values with it. Borel said that during the housing boom, when Wyndhurst was started, he had five crews that were building a house every 10 days. Today, Borel Construction operates at 25 percent of its high-water mark.

If nothing else, Lynchburg’s planned communities, which previously occupied undeveloped land, have been a boon for the city’s tax coffers. Wyndhurst’s taxable value has risen from $2.2 million to $220 million in the space of 11 years, which generates more than $2 million in real estate taxes every year, according to City Assessor Greg Daniels in a 2009 News and Advance article. City councilman Jeff Helgeson told the newspaper that that figure alone makes the development a success even though the city’s tax-assessed value of commercial properties in Wyndhurst dropped 12 percent in 2009 because the buildings are selling for less than expected.

In addition, Enterprise Drive was obviously needed. It is estimated that 14,000 cars use the cut-through every day, according to the News and Advance. And Borel says that he is already seeing a profit from Cornerstone.

Still, questions remain. Cornerstone’s commercial side is yet to be built, and with the lessons learned from Wyndhurst, it may have a better chance to be successful. Downtown Moneta retailers face the challenge of trying to stay out of the red by depending on summer business. The economy, though improving, has played a role in each community’s viability and will continue to do so.

Today, more than two dozen spaces sit empty in Wyndhurst, filled with memories of what was less than a decade ago. According to Burger, Wyndhurst is still figuring out just what it will be after a mixture of failure and success.

“After this many years, six, seven years, Wyndhurst is beginning to find its way…Lynchburg is beginning to find its feet pretty solidly with a balance of residential, retail and professional offices,” Burger said.

The line has thinned at The Muse—just an old man ordering a black coffee, no room for cream, to-go. The mid-morning crowd, in for their caffeine fix, has moved on and it is quiet. Cars are still rumbling along outside, a white Ford Taurus followed by a blue Nissan. Enterprise Drive is bustling, as it always is. Wyndhurst, though? After nine years, that’s a question that still remains unanswered.