More than one member of the Falls Church City Council had a veritable tantrum Monday night when developers of two of the major mixed use development projects nearing completion on West Broad reported that banks are the only business they could find willing to fill key components of their ground-floor commercial space. Council member David Snyder was particularly angry, saying that the City had been two-timed by the developers, first because they used up so much space for residential units in the City’s commercially-zoned areas, and now because they’re not living up to the Council’s expectations for significantly desirable retail on their ground floors.
As has always been true throughout this period of bold decisions by the Falls Church civic leadership, bringing about the development boom that is just now picking up steam, it is not the developers, themselves, who are to blame for the configuration and occupancy of their structures so much as those spooky, irreverent “market forces.”
If the City Council wants to find blame for what’s going into these new projects, it should blame Adam Smith’s “invisible hand.” Smith, an early 19th century economist and philosopher, coined that phrase to describe the functioning of supply and demand in the market place.
Chris Ciliberti of Waterford Development, describing the make-up of commercial uses on the ground floor of the Spectrum, whose impressive frame has now risen to its full height on the north side of the 400 block of W. Broad, was eloquent in his efforts to calm the City Council down. He said, in fact, the City and the developers are in a partnership, both wanting the same thing. He outlined how hard it has been for his company the last two years finding the best mix of commercial and retail use for his project. Citizens, by the way, will not be disappointed by at least a couple of the prospective tenants.
The fact is that major banks want space at both the Spectrum and at the Byron, almost directly across the street, and nobody else does. Ciliberti and Ed Novak, who’s built the Byron, explained the difficult nature of the retail, as well as residential, market out there in the real world. Hidden in their calming remarks to the Council were signals that the retail industry is bracing for a big hit. If Falls Church can fill its commercial space with anything, it will be fortunate.
Take the case of one mid-sized national women’s clothier chain that was interested in a Falls Church store for some time. It turns out that they’ve changed their growth strategy dramatically. Rather than opening any new stores, at all, they’ve decided to focus on expanding those among their existing stores that are doing the best. This tells us that they may be bracing to close some of their less-successful outlets, especially as the dive in the real estate market deepens with the inevitable fall-out from the recent years’ orgy of sub-prime lending.