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Empty storefronts are echo of Hernando County housing boom

Drive around Hernando County, and you can't miss them. From Weeki Wachee Village and Castignoli Court, up and down Cortez Boulevard and Commercial Way, to Brooksville's Mountain Park Plaza and even downtown.

They are everywhere: empty offices, empty medical suites, empty storefronts. For rent, for sale, for lease.

Old, new, build to suit. It doesn't matter. There's a lot of empty space.

On the surface, new businesses continue to arrive, albeit at a slower pace than a few years ago. With a new Publix coming on County Line Road, a new Target on Spring Hill Drive, HHGregg taking over the Circuit City building and Five Guys Burgers and Fries opening on Cortez Boulevard, it might seem that all is well.

But that's not the case.

So why so many empty storefronts? And why now?

The origins of today's overabundance of commercial space lie in the boom years earlier this decade. There was a lot of growth and a lot of optimism that there would be more growth. That prompted developers to plan in anticipation of the need for more stores, restaurants and office space.

Most box stores and large commercial construction projects take years and months from inception to ribbon cutting. Most of the new projects that have recently been completed were in the pipeline long ago, said Mike McHugh, county business development director.

Now, the pipeline is nearly dry. And demand has declined.

For the months of April and May, the county skipped two code compliance review meetings, which are held specifically for new construction, because there were no projects to review.

"That's unheard of," said Tim Stoops, owner of Argyle Construction in Spring Hill. "It's something to be concerned about. It's the slowest I've ever seen it."

For commercial real estate, which typically follows housing, things have nearly come to a halt.

This year is likely to show a 70 percent drop in commercial sales compared with 2006, the last of the boom years, said real estate agent Gary Schraut.

The good news is that for a business with capital and a strong business plan, deals abound. The company HHGregg is expanding now, in part to fill the gaps left by other retailers and to take advantage of good leasing deals.

If they can afford to cut rents, strip mall and commercial space owners are generally willing to make deals simply to keep space from going vacant.

"Developers still need to cover their bank loans, but they want their shopping centers full," said Elena N. Marrero, leasing agent with Insite Real Estate of Clearwater, which has properties in Hernando. "We've seen a change in the market. Some leases have dropped dramatically."

Business owners who lease are just hoping to ride out the economic storm.

"Boy, we've struggled this last year," said Stewart Campbell, owner of Patio Paradise in the Coastal Landing Shopping Center in Spring Hill. "It's quite miraculous that we're still here."

Patio Paradise sells high-end patio furniture and is in its second Hernando location. Campbell is working closely with his landlord and suppliers to keep things going.

"We have great faith, as do many retailers, that eventually things will turn around," he said.

Real estate agents say their phones are still ringing.

"I am getting more phone calls lately — more inquiries from people confident that things will turn around," said Al Isnetto with Palmwood Realty in Spring Hill.

"People are very price-sensitive, whether for the purchase of land or to lease space, but if you can find what they are looking for within the price range, they will move," he said.

But new construction likely won't pick up until the existing inventory is filled, said McHugh.

And there might actually be more available commercial space in Hernando County now than ever before, Schraut said.

"It was built for the future, and the future is just a long way off," he said.

In the meantime, familiar commercial faces continue to disappear.

After 22 years, Wright Fabric Shop in the Western Way shopping center in Spring Hill recently closed its doors. A UPS "we were here with a package" notice flapped in the breeze on a recent day. There was a note on the door explaining the absence of anyone inside.

Gone also is WFO Kawasaki, west of Brooksville.

Some worry that commercial bankruptcies and foreclosures will follow the high number of personal ones.

Despite concerns, Hernando's new arrivals show every sign of sinking roots, even if it's lonely out there.

It is possible to eat a melt-in-your-mouth cruller and surf free wireless Internet at the Daylight Donuts that opened in Ronco Plaza in Masaryktown last winter. A lone tenant in a spanking new plum and peach strip mall, Daylight now serves breakfast.

A new 16-unit mailbox sits prominently out front. Fifteen have never been used.

Shary Lyssy Marshall can be reached at slmarshall.sptimes@gmail.com.

Empty storefronts are echo of Hernando County housing boom 07/11/09 [Last modified: Saturday, July 11, 2009 1:05pm]
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