With empty storefronts on the rise in downtown Norfolk, city looks for a solution

·3 min read

Downtown Norfolk has long been a hub for nightlife, shopping, dining and the arts. But the area is facing a rising number of vacant storefronts, according to a recently released study.

Retail and restaurant vacancies in the downtown area, which spans the Neon District, the Granby Street corridor, the MacArthur Center and the Waterside District, reached 23% in 2020 — nearly four times higher than the national average for all retail space at the time, according to a market study commissioned by the Downtown Norfolk Council.

The problem: There’s too much retail and restaurant space downtown, and not enough residents to fill it. And there’s no easy fix, according to Mike Smith, real estate director for Streetsense, the consulting firm that conducted the study.

“Without a significant influx in population, we don’t foresee these numbers changing much,” Smith said.

Streetsense presented the firm’s findings to the Norfolk Planning Commission on Aug. 25. Smith said the rise in vacancies is caused by a global shift towards online shopping and competition with retail districts in surrounding Hampton Roads cities.

“Teenagers don’t spend every Saturday at the mall like they once did. They’re spending hours on Instagram. They’re spending hours on Fortnite and Roblox,” Smith said. “And this is all having a direct impact on the need for retail.”

Downtown Norfolk has 1.5 million square feet of retail space, including vacant and non-vacant properties. But there’s demand for only around 380,000 square feet, according to the study. MacArthur Mall has the highest vacancy rate downtown, at nearly 30%. The Granby Street corridor has a 20% vacancy rate. And the NEON District has a 13% vacancy rate.

Mary Miller, president of the Downtown Norfolk Council, said the group commissioned the study in 2021 to help plan for the future and better understand how the retail landscape is changing.

“None of us want blank facades on any street,” Downtown Norfolk Council President Mary Miller told The Virginian-Pilot. “I would love to see far more shopping in our downtown than we have choices, but the demand isn’t there.”

Miller said the study is an opportunity to “reimagine” what downtown Norfolk could be.

Streetsense presented several recommendations.

At the top of the list is redeveloping the 23-year-old MacArthur Center, which aligns with the Downtown Norfolk Plan2030, a city blueprint for future development.

The plan, released in March 2021, presented three options for the MacArthur Center: demolishing it; converting the upper floors to office space; or “de-malling” the space to reopen Market Street as a pedestrian-friendly promenade lined with mixed-use and residential buildings.

“In the course of the first two decades of the 21st century, retail changed so dramatically that MacArthur Center needs to be reconceived,” the plan states.

Streetsense is also recommending the city tweak its zoning code, which requires 65% of all ground floor space on most downtown streets to be retail.

Lisa Ortiz, managing director for Streetsense, said the city should remove those ground floor requirements from everything that is not “a principal street,” like Granby Street or City Hall Avenue, to allow for ground level residential development.

“We think that will create interesting, viable, lovely walkable streets that are residential in nature,” Ortiz said.

Preston Carraway, vice president of the Downtown Norfolk Civic League, said more moderately priced housing options are needed downtown. Speaking for himself as a resident, he said the city should strike a balance between retail and housing.

“You don’t want it to look like it’s a blighted area, because it’s not,” Carraway said. “But if the balance isn’t right, it could appear that way.”

Daniel Berti, daniel.berti@virginiamedia.com