Updates from Letty – March 17, 2023

Blog posts are the personal views of Letty Hardi and not official statements or records on behalf of the Falls Church City Council

Dear Friends,

City Council had a relatively light meeting agenda, but it was a busy news week. The groundbreaking ceremony for Founders Row 2 happened this week, but it occurred in the backdrop of news of the imminent closure of the small format Target store on S. Washington. I’ve been fielding variations of this question all week: “Why are we building more development if we can’t keep a Target in business?” It’s a reasonable and fair question, so read on.

Thanks for your questions and comments in response to my post last week. Let’s keep the engagement going – there will be a town hall about the proposed T Zone updates on Tuesday, March 21 at 730 pm at City Hall. We’ll also be holding our monthly Ask the Council office hours on Wednesday morning, which is an informal opportunity for dialogue with us. And as always, you can reach us by email or I’m happy to meet with you one on one. Our next meeting will be March 27, which will be when the City Manager’s budget is presented to the public and City Council.


What Happened This Week:

Economic Development – Founders Row 2 Groundbreaking & Target Closing

Following our approval a year ago, the official groundbreaking for Founders Row 2 (now renamed to Modera Falls Church) happened this week. The project has a 2 year construction timeline ahead and planned 2025 opening. My April 2022 post has more details on the project. Of note: besides the 280 units of housing and commercial space that replaces the out of business RiteAid and carpet store, 12% of those units will be dedicated as permanently affordable, the highest percentage we’ve achieved to date, and some units will provide deeper levels of affordability (40% of area median income) for the first time. The project will also be LEED Gold, our first fully electric residential units, ie not using fossil fuels in appliances or heating/cooling, impressive open space (28%) and tree canopy (14%), and transportation and traffic calming improvements.

Using a similar model as previous projects, the developer hosts regular meetings with the neighborhood to provide updates and address any questions/concerns during the entire length of construction.

On the same day as the groundbreaking, it was disappointing to hear the news that the small-format Target located on S. Washington will be closing in May. As you may recall, the Target opened five years ago in March 2018. The anchor space was originally to be occupied by a Fresh Market grocery store (per the negotiations and approvals from 2013); Fresh Market never opened in 2016 despite a signed lease due to its acquisition by a private equity group. Per the news reports, it does not appear to be an issue with all of Target’s small format stores (as other locations are remaining); the select closures appear to be based on the individual stores’ underperformance – ie low sales and low foot traffic.

Letty’s Thoughts: Over the coming weeks, I’m sure there will be much “Monday morning quarterbacking” on Target’s demise. My initial thoughts:

It’s hard to believe but our ground floor vacancy rate is actually quite low and especially low compared to the region. We do have a few high visibility vacancies in the city, which usually have exacerbating circumstances that explain the vacancy – unreasonably high rent, poorly laid out space, landlords that aren’t motivated to lease the space, high initial build out costs, etc. That said, when Target vacates, it will be difficult for the landlord to find one tenant to take over the large space so we’ll need to think about whether the city should hold firm to the original 2013 requirement to have a grocer, keep the space for a single anchor, or other considerations.

Even before the news broke, we had plans underway to invite commercial brokers to upcoming meetings to discuss the state of retail and office leasing and emerging, creative uses for commercial space, in light of the changing shopping and return to work trends pre and post Covid. Recall that in January and March, we heard applications from property owners requesting flexibility on ground floor uses at the Byron and Pearson Square, so this was already a trend we were seeing. It’s important to stay attuned to the market and be realistic (after all, the Tinner Hill building and concessions were developed over 10 years ago) while balancing the desires of the community and original fiscal projections.

No one has a crystal ball to predict what kinds of retail will be successful, but we have heard a common theme in the past: Falls Church needs more residential density (ie, more population and foot traffic) to support the amount and type of retail we’d like. I’ll report back on any new insights we learn from those on the ground in the coming weeks.

What’s Coming Up:

Tuesday, March 21 – T Zones Town Hall (730 pm, City Hall)

Wednesday, March 22 – City Council “Ask the Council” Office Hours (9 am, City Hall)

Monday, March 27 – City Council Meeting* (FY24 budget presentation)

Monday, April 3 – City Council Work Session*

Monday, April 10 – City Council Meeting*

*every Monday (except 5th Mondays and holidays) at 7:30 pm. You can access the agenda and livestream here, including recordings of past meetings