State

Village One businesses worried by center's vacancies

The owners of Village One Plaza have learned that if you build it they will come, until a recession gets in the way.

The Modesto shopping complex at Floyd and Roselle avenues opened two years ago amid much fanfare and high expectations.

The center was designed to be a communal hub for the then-bustling adjacent Village I development.

Now, as the two-year anniversary of its anchor store Raley's supermarket approaches later this month, merchants are worried.

"It is much slower than we first started," said NT Nails owner Truong Nguyen, whose shop is one of the center's original tenants. "When we first started, the center was not filled but it was still pretty new. Right after that the economy went down. Now, there are a lot of empty spaces."

When the center opened in August 2007, there were five available spaces. Today there are seven.

Coffee behemoth and founding tenant Starbucks closed its door last week, signaling a continued slide in the center's occupancy.

Four of the original five vacant storefronts still are unleased. Three more — including Jackson Hewitt Tax Services and Super Burrito Factory — have since closed.

Village One Plaza has 18 active tenants on its 10-acre lot including Raley's, Tasty Thai, Mountain Mike's Pizza, Buffalo Wings & Rings, River City Bank and Edible Arrangements.

The center's Sacramento-based ownership and commercial real estate firm — Village One Plaza LLC and Sierra Pacific Retail Group, respectively — declined comment.

Raley's officials also declined to comment on their store.

Other merchants said the one-two punch of the mortgage crisis and stalled economy shoulder much of the blame.

Village I and its surrounding northeast Modesto neighborhood have 800 foreclosures in process, according to the real estate site Realtytrac.com.

"There is not enough foot traffic and too many foreclosures in the neighborhood," Nguyen said. "It has not had a good effect. We were worried; rent is pretty high here."

With combined rent and other fees, Nguyen said he spends $4,000 a month on his 1,200 square-foot space. And that, he said, is after a rent reduction earlier this year.

The center's business owners went to the management together in February to ask for a break on their rents.

Nguyen said he got about $500 knocked off his monthly rent and fees. But with so many empty spaces on his eastern side of the complex, the overhead still is taking its toll.

NT Nails sits amid five of the center's seven empty spaces. Four of the spaces have never had occupants.

Buffalo Wings & Rings owner Teresa Costa said her restaurant has been able to successfully weather the downturn. But she does worry about the empty spaces.

"I think it would be better for all of us if it was all full, but I don't think that'll happen for a while," she said.

The first-time restaurant owner picked the Village One Plaza because of the area's growth potential. Despite opening in March 2008, just as the housing crisis was starting to become full-blown, she has managed to build a strong customer base.

A combination of weekly specials, customer service and repeat clientele has made her wings franchise bustle.

"I don't know what it's like to be open in a good economy," she said. "I think most of (the Village One business owners) feel like they just need to just get through this. Though some of them are pretty stressed out; it's not getting better for them."

Like Nguyen, Costa said she has been able to work with management to get her rent and fees reduced by about 20 percent.

"That's been extremely helpful," she said. "I feel the agent is trying to help everyone, all the stores in this shopping center. It hurts us all if we lose one."

Store owners, many who signed five-year leases, hope to stick out the hard times. Once the economy turns around, they said, they will be still in a prime location.

"I invested a lot of money in my business and I'm not planning to leave," Nguyen said. "It's just bad timing, for all the stores."

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or 578-2284.

  Comments