Business Outlook 2014

By Dennis Read
Photos by Ryan M.L. Young
Illustration by Yogesh Chaudhary

Growth was a common talking point when Columbus CEO discussed the coming year with local experts in a variety of fields. Central Ohio hospital systems are adding facilities and services. Developers are planning numerous new sites for retail shopping. The Downtown housing market is continuing to expand. Employment numbers are expected to make slow but steady growth. Area colleges are increasing opportunities for students to pursue degrees.

For our annual business feature, we interviewed a variety of Central Ohio professionals to get their thoughts on what 2014 holds for five key topics: employment, real estate, healthcare, retail shopping and education.

Outlook: Retail

Central Ohio’s retail landscape could change dramatically if proposed development occurs.

Moving from 2013 to 2014, the pulse of retail business has slowed. Chris Boring, of Boulevard Strategies, says that “consumer confidence is currently way down,” a reflection of the continuing slow economic recovery and the recent federal government shutdown. “Consumers are not going to spend a lot of money if they don’t have to,” Boring says. Jung Kim, director of research at the Columbus Chamber of Commerce, says that during the past three or four years retail businesses “have been playing defense. But now they’re looking at new projects.”

Boring says that, looking ahead, signs are promising. He notes that the store vacancy rate is less than 10 percent, the lowest in a decade. Easton, rated as one of the 10 best shopping centers in the world by Shopping Centers World magazine, “is the most exciting thing in Central Ohio,” he says. Citing its current construction of Easton Gateway, a 54-acre addition at Stelzer and Morse roads, which will bring REI, Dick’s Field & Stream and other high-end retailers to the mix, Boring quips, “Easton reloads while other locations rebuild.”

Dublin will experience a huge boost in retail with the completion of Bridge Park, a $300 million mixed-use project near the city’s historic center. Construction will begin in 2014, to be completed in 2018. Boring calls the project transformational. “Dublin never had a downtown,” he says. “This will give it one.”

With the possibility of three outlet malls coming to the area—two at the Rts. 36/37 interchange off I-71 and one on Beech Road off Rt. 161 in New Albany—new shopping areas may well emerge before long. But not this year.

Kim says that “there is good reason to be concerned that so many projects in the pipeline might be too much.” Boring is dubious about the prospects of the New Albany outlet mall, which seems too far off the beaten path. But he doesn’t rule out its possibility. “Les Wexner might invent something that hasn’t happened before,” he notes.

The Short North will be another retail growth area in 2014. Boutiques and other smaller stores, anchored by restaurants, are increasingly dotting High Street. Apartment construction in the Short North will spur retail activity. Hubbard on High, a $25 million project by Wagenbrenner Development with 72 apartments, has just opened. Jeffrey Place that contains 276 attached single-family units is under construction and expected to be finished late in 2014 or early in 2015. Anthropologie will occupy two floors of The Joseph, a $65 million Pizzuti Construction project due to open early in 2015.

The retail development along Rt. 23 between Columbus and Delaware “never ceases to amaze me,” Boring says. “They’ve overbuilt. The market is saturated.” Kim notes that Tuttle Mall “has been losing some of its luster over the years. It’s not the destination that it has been.”

The recent proliferation of food trucks will continue. Boring points out that the cost of operating a food truck is only 15 percent of running a full-service restaurant. Food trucks are “enormously popular with millennials,” Boring says.

Boring predicts that in the future the most dominant retailer won’t be Walmart or Costco. It will be Amazon. Citing a yearly rate of 15 percent growth in e-commerce, he said that consumers will do more of their shopping on-line. That will diminish the need for new construction. “It won’t be long before we’ll have all the retail space we’ll ever need,” he says.

Hot Downtown Retail Submarkets

North High Street
Annual retail spending potential=$140 million /year
Retail demand generators:
--59,800 daytime workers within a quarter mile
--20,000 COTA riders/week average
--200,000 unique overnight visitors/year

Gay Street
Retail spending potential=$135 million/year
Retail demand generators:
--41,200 daytime workers within ¼ mile
--1,300 residents within walking distance
--550,000 theater patrons per year

Lynn & Pearl Alleys
Retail spending potential=$85 million/year
Retail demand generators:
--45,700 daytime workers within ¼ mile
--1,200 residents within ¼ mile
--1,125 hotel rooms within walking distance

Capitol Square
Retail spending potential=$85 million/year
Retail demand generators:
--44,700 daytime workers within ¼ mile
--1,360 residents within ¼ mile
--80,000 Statehouse visitors/year

RiverSouth District
Retail spending potential=$80 million/year
Retail demand generators:
--35,500 daytime workers within ¼ mile
--800 residents within ¼ mile
--Millions of visitors/year to Franklin County Courthouse complex

Third & Main
Retail spending potential=$65 million/year
Retail demand generators:
--14,000 daytime workers within ¼ mile
--1,530 residents within ¼ mile
--38,000 vehicles through intersection/day on average

Source: Downtown Columbus Retail Submarkets