The amount of empty office space in Alexandria doubled in the first quarter from a year ago, one of several indicators that offered a “mixed to weak” economic picture for the city in April, according to the city manager.
The city’s office vacancy rate increased from about 7 percent to over 14 percent in the quarter ended March 31, the city manager’s April economic report said. That compares with a first-quarter vacancy rate of 15.2 percent for Northern Virginia and 13.5 percent for the Washington area.
The rate would be about 9 percent if the Victory Center Building, which was renovated and added back to the vacancy listing during the first quarter by commercial real estate advisory firm Grubb & Ellis, were not included, the report from City Manager James K. Hartmann said.
Former Mayor and Councilman-elect Kerry Donley said most businesses in Alexandria employ fewer than 20 people and because of the economy, a lot of those small businesses — and local contractors — are now at risk.
Landmark Mall on Duke Street has been a thorn in the city’s side for years. General Growth Properties, which owns the rundown shopping center, has filed for bankruptcy protection, and numerous storefronts in the complex are empty. Since the city toyed with turning Landmark into a multiuse facility in 2005, notable retailers such as Gap and American Eagle have left the mall.
“I actually think the bankruptcy helps to get it moving,” said Donley, who added that in a tough economy, a developer could come in and buy the mall for “a steal.”
Donley has stressed the development of mixed-use properties to promote commercial development and reduce the city’s dependence on property taxes for revenue.
“We’re an inside-the-Beltway jurisdiction — retail alone is too expensive,” he said.
The revised April revenue outlook for the current fiscal year is down slightly. The levels reflect a drop of 2 percent — or $10.5 million — from the fiscal 2009 budget, according to Hartmann’s report. He estimated, though, that city staff would produce at least $2 million more in savings in fiscal 2010 than previously projected by closely monitoring hiring and expenses.
