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Posted January 21, 2009 | Copyright © The Northern Virginia Daily
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Retail development freezes

No quick replacements for loss of big box stores

By James Heffernan -- Daily Staff Writer

WINCHESTER -- The loss of Linens 'n Things and the soon-to-be-vacated Circuit City will leave two gaping holes at Winchester Station at a time when retail development activity is at a standstill.

Richmond-based Circuit City is in the midst of liquidating merchandise after the bankrupt electronics chain failed to find a buyer at auction last week.

Linens 'n Things folded similarly at the end of last year, a victim of the sagging housing market and the sharp drop-off in consumer spending.

The two anchor stores at Winchester Station, which between them cover more than 50,000 square feet, may prove difficult to replace in the immediate future. Few retailers with that size footprint are shopping for real estate right now, and some of those that are in the market are having difficulty getting financing.

Trout Segall & Doyle, the Baltimore firm responsible for developing Winchester Station, recently split into two companies. Andrew Segall, now principal of the Segall Group, did not return phone messages Tuesday seeking comment on prospective tenants.

Retail analysts are predicting that Circuit City's demise will be a particularly big blow to the nation's shopping malls, creating a glut of big-box spaces for rent.

Circuit City's main rival, Best Buy, has signed a lease to co-anchor The Shoppes @ Tevis, a planned 264,000-square-foot shopping center adjacent to Winchester Station, along with Dick's Sporting Goods. But J.P. Carr, vice president of Glaize Developments Inc. in Winchester, which is helping develop the project, said he can't say when construction will begin.

"Projects will start when there's a viable need for them and financing becomes available to finance those projects," he said. "Until then, you'll see a lot of projects lying in wait. ... That's not to say they're dead or they're not going to happen, but it may be an extended time frame."

Best Buy added 194 stores last year, some of them in Europe, but also saw a 6.5 percent decline in sales over that stretch. Still, the company believes it continued to gain market share during the holiday shopping season, particularly in mobile phones, computing, home theater and music.

Carr also would not discuss other possible tenants. At one time, Trout Segall & Doyle's online brochure showed a host of specialty retailers, including Ulta, Christmas Tree Shops, Lane Bryant, Dress Barn, rue21, David's Bridal, the discount teen store Five Below, Factory Card & Party Outlet and a Sleepy's mattress store, occupying space at The Shoppes @ Tevis. Gourmet burger chain Red Robin also was shown, along with Starbucks, California Tortilla and Panda Express.

Glaize Developments also had planned to extend Tevis Street east to Interstate 81, the first step in a process that will eventually link that development to the Russell 150 property off U.S. 522 (Front Royal Pike) via a bridge over the interstate.

Meanwhile, activity continues at Rutherford Crossing in the Stephenson area of Frederick County. The shopping center, located next to the new FEMA facility, is about 80 percent leased, according to lead developer Jack Waghorn, of Reston-based NV Retail.

McDonald's held a grand opening at the site this past weekend.

The shopping center hasn't developed as quickly as originally anticipated, but some of that has to do with smaller tenants getting financing and building permits, Waghorn said.

As for rumors that one of Rutherford Crossing's anchor stores, Lowe's, may be in danger of shutting down, Carr said they are "absolutely not true."

Both Lowe's and Target are doing well at the center given the current retail climate, he said.

"They're both getting traffic and are turning a profit."

Contact James Heffernan at jheffernan@nvdaily.com

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