More than three years after beginning work on one of Hixson's biggest shopping centers, a Barnesville, Ga., developer hopes construction of the first stores in the $40 million retail complex will begin by this fall and work could begin even sooner on three restaurants on the center's outparcels.
Greg Blosser, president of Paragon Development Inc., said the project known as Fountains of North Chattanooga will be built in phases in response to the economic slowdown over the past year.
"We've had great interest from retailers interested in our project since the first of the year," Mr. Blosser said. "Our initial plans were delayed six months or so, but those retailers that are in good shape are still looking for opportunities."
Chattanooga rezoned 60 acres for the retail complex along Highway 153 south of Grubb Road last year in 2006. Paragon bought, cleared and leveled the entire 60-acre site
Mr. Blosser had planned to announce tenants for the shopping center by September. But work was halted when the economy slowed and many national retail chains cut back their expansion plans and several major retailers, including Circuit City, Goody's and Linens and Things, filed for bankruptcy.
During the first quarter of 2009, the commercial real estate research firm Reis estimated that the amount of occupied space in American shopping centers declined by 8.7 million square feet and the vacancy rate in centers rose to the highest level since Reis began tracking vacancies a decade ago.
But Mr. Blosser said Chattanooga is one of the strongest retail markets in the region and the Hixson area north of the Tennessee River is ripe for more stores. Paragon has identified 80 potential retailers that currently don't have any stores north of the Tennessee River in the Chattanooga market.
"All we need are 20 to 24 of them for our project," Mr. Blosser said. "Are the number of retailers building new stores down? Yes. But Chattanooga is a growing economy and is much, much better than the U.S. as a whole."
The first phase of the development will likely include from 190,000 to 220,000 square feet and include about 10 stores. The first phase is likely to open in the spring of 2010 and a second, similar phase could be added a year later, Mr. Blosser said.
"We're about 60 percent leased on the first phase," Mr. Blosser said, "and we have three restaurants under contract that should soon be applying for permits."