By Raymond Castile > rcastile@yourjournal.com | Posted: Sunday, March 6, 2011 5:00 am
It's been years since Dan Farner could look through his office window and see anything but empty storefronts.
"A year ago, my side of the street was empty, too," said Farner, a financial adviser who runs an Edward Jones office on WingHaven's Boardwalk Marketplace.
When it opened in September 2003 Farner's business was one of the first to set up shop in the O'Fallon neighborhood's two-block commercial district.
Fully loaded, the Boardwalk bustled with 11 businesses, including a library.
Farner said he feels nostalgic for the early years, when people would fill the Boardwalk at lunch and dinner, eating ice cream on its sidewalk benches, standing in line for a deli sandwich, or strolling the sidewalks until a restaurant seat opened.
"It was packed out here," Farner said.
Of 22 Boardwalk businesses that opened from 2003 to 2009, 18 closed. The decline began long before the recession started in December 2007.
(To see an interactive map of past and present tenants at the Boardwalk, click here.)
In Farner's view, the turning point came in February 2006 with the closure of Dave's on the Boardwalk, a small grocery and meat market that had come to symbolize the business district.
Last summer the Boardwalk's roster dwindled to just three full-time tenants - Edward Jones, Jan's Travel and Cruise and the library, which leases office space to the St. Charles County Arts Council.
Only Farner and the library remain of the original 11. A lunchtime visitor today would find a very quiet Boardwalk, the only dining choices being Bonnidell's Ice Cream and the library's coffee machine.
But things have picked up in the past year, in large part due to a dentist who bought one of the Boardwalk buildings, located his office there and made an aggressive effort to land tenants.
Now Farner's side of the street is full again with new neighbors that also include a hair salon and a sewing school.
"I'm still very optimistic about the Boardwalk and its future," Farner said. But while his side of the street is revitalized, the other side slumbers.
A two-unit building managed by McEagle Properties remains vacant. Farner believes McEagle and other Boardwalk building owners in the early years set rent too high.
Glenn Mitchell, director of property management for McEagle, said the company is willing to make "aggressive offers" to fill the vacant building.
"We don't make any money if the building is empty," he said.
Live, work and play
That's the concept developer Paul McKee and his McEagle Properties used in selling WingHaven, a 1,200-acre, master-planned community in O'Fallon. The Journal contacted McKee for comment for this story; he referred questions to Mitchell.
The mixed-use development includes more than 1,400 homes, villas and condominiums in 28 villages, plus apartments.
The Boardwalk is hidden from motorists on WingHaven Boulevard and Highway 40. Nestled in the middle of WingHaven's many subdivisions, it was designed as a "downtown" hub, placing shops, offices and restaurants within walking distance.
WingHaven incorporates elements of New Urbanism, an urban design movement combining businesses, open space and homes of various sizes and prices. New Urbanism favors walking over driving.
Loyal customers not enough
To many people, Dave Gabris was not just "on" the Boardwalk. He was the Boardwalk.
Gabris and his wife Kathy opened their meat market business in early 2003 and endured lean months while the Boardwalk was still a construction zone.
"In our first year we fell behind on the rent," he said. "In the end, it came up and bit us."
Business finally picked up and remained busy - but not quite busy enough. On Oct. 16, 2005, Gabris closed the shop.
That day, 500 supporters rallied outside the store. Neighbors collected more than $50,000 to help him buy the building.
Gabris reopened Nov. 12, but the business could not survive. In February 2006 Dave's closed for good.
Gabris said the rates McEagle charged were high, but no higher than elsewhere in O'Fallon. He does not think high rent played a major role in the meat market's failure. Instead, he believes he never fully recovered financially from that first year.
A bigger factor than rent was location.
"You are somewhat secluded on the Boardwalk, and that was a huge challenge," he said.
Mitchell, with McEagle, said the 6,000 square feet Gabris leased from McEagle might have been too big for a grocery store.
"That is a lot of space to take on and move product in and out," he said.
"Dave and Kathy were great people to have in the community, but maybe it was not the right business model," he said. "Maybe the density was not there yet. Maybe a smaller grocery store would have been better."
Gabris, now an assistant manager at Straub's grocery in Town and Country, said the location was not too big. If anything, it was not big enough. Most independent grocers want at least 10,000 square feet, he said.
The problem was not the size of the building, Gabris said.
"If any of us could put a finger on why the businesses failed, we'd still be there."
Similar to Dave's, the Seamus McDaniel's restaurant struggled despite a loyal customer base. It opened on New Year's Eve 2004 and closed last April. Co-owner Dan Liston said part of that struggle was the $900-$1,100 he had to pay monthly to the Boardwalk Market Association, a now-defunct coalition of building owners that collected fees to pay for things like landscaping and lighting.
Like Gabris, Liston fell behind on his rent. Finally, he said, the bank demanded the building.
"After all the headache and heartache, I was like, ‘Come and get it.'"
Making retail stick
Greg Prestemon, president and chief executive officer of the Economic Development Center of St. Charles County, said the idea of mixing retail with residential seems to appeal more to home buyers than business owners.
"To make retail stick, you probably have to have very inexpensive rental, very inexpensive leasing rates, or some kind of subsidy from the developer," he said.
WingHaven does not have the concentration of homes within a 10-mile radius that it would if it were closer to Lake Saint Louis, he said. Instead, it's near the Busch Wildlife Conservation Area.
The Boardwalk does not receive as many drop-in customers as a strip mall on a major road, Prestemon said.
Jason Brody, assistant professor in regional and community planning at Kansas State University, said creating successful commercial districts in New Urbanism communities requires a nontraditional retail strategy.
Most developers first seek national retail chains. If they cannot attract them, they turn to regional chains, then finally to mom-and-pop businesses.
New Urbanism developers seek mom-and-pop businesses first, Brody said, turning to regional and national chains as a last resort.
Traditional developers focus on national chain stores because they see them as less risky. New Urbanism developers want to create a "special place," a unique environment with local identity that will increase the value of surrounding homes.
In other words, places like Dave's.
Llywelyn's Pub to open
The Celtic-themed pub, an institution in the St. Louis area, should provide the Boardwalk with a shot in the arm when it opens March 14 in the building once owned by Seamus McDaniel's.
Scott Kemper, one of Llywelyn's three owners, said they did not want a building next to a highway. They prefer locations "off the beaten path," he said.
"We liked the neighborhood feel, a lot of rooftops, a lot of people living in the immediate area," Kemper said. "People are looking for a hometown place they can call their own."
What also should help is that McBride & Son Homes plans to build 82 new houses in what is now an empty 6.4-acre field across the street from the Boardwalk. Business owners hope they get to know these new homeowners on a first-name basis.
How to fill a building
Michael Heiland bought one of the buildings on the Boardwalk in July 2010. His tenants include Farner, the Edward Jones agent.
Heiland was the latest in a string of owners of his building that went like this: McEagle, an oral surgeon, a South African businessman and the bank that finally sold it to Heiland.
Heiland, a dentist, purchased the building because it already had a dental office. But he had ambitions beyond his practice.
"I saw the potential to get it fully leased," Heiland said. "I thought it would be good for the community."
The previous owner charged $18 per square foot, at least $4 above the market average, he said. Heiland charged his new tenants $8 per square foot.
"I started very low so businesses can establish themselves and the community can embrace them," Heiland said. "Over time, we can gradually increase their rent to get it up to market value."
Instead of hiring a real estate agent to round up tenants, Heiland, with no previous property management experience, had one of his patients post ads on Craigslist. By December, he had the building fully occupied.
"Before this, the Boardwalk had died," Heiland said. "Now hopefully everyone will have the full community - with houses and flourishing businesses - that had been promised but never delivered."
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