Business

Brannon Crossing withstands economy

NICHOLASVILLE — More than two years after it opened near the Jessamine-Fayette County line, Brannon Crossing Centre is weathering a downturn in the economy.

Slower retail sales, the departure of an anchor, and the exit of a national home builder that had planned to bring rooftops to the Brannon area took some of the new-penny shine off Jessamine County's biggest shopping center.

Developer Jim Hughes, whose Jessamine-based Belle rive Development Co. built and markets Brannon Crossing, acknowledges that the closing of Goody's Family Clothing in July — part of the Knoxville chain's Chapter 11 bankruptcy — was "a major hurt" to the shopping center. Goody's was the first store that had opened in Brannon, in April 2006.

Today, many of Brannon Crossing's "inline retail" buildings with bright red, orange and yellow façades are vacant. One building behind Panera Bread and Red Robin restaurant doesn't have a single tenant.

It's not a situation unique to Brannon Crossing. Reis Inc., an Indianapolis real-estate data firm, said that during the second quarter, vacancies climbed in open-air retail centers to the highest tally since 1995.

"Vacancy levels are pretty high in retail in general now because business is fairly slow," said Jan Gould, president of the Kentucky Retail Federation. "Higher gas prices will take disposable income out of folks' pockets."

Hughes said he "purposely overbuilt" those spec buildings. "I felt like it was cheaper to build the space and pay the interest costs" rather than wait and pay inflationary construction costs later, he said.

"If I don't get them leased in the next 18-month to two-year period, then I made a mistake," Hughes added.

On the positive side, Hughes said a toy store, a chiropractic center, a maternity shop and an Italian restaurant will fill some of the empty inline retail spaces. And he said he has something lined up to go into the Goody's space, but won't say what that is.

Meanwhile, stand-alone stores continue to be built in Brannon Crossing. McDonald's near the U.S. 27 entrance is weeks from opening, and S&S Tire near the AmStar Cinemas should open soon.

In all, some 453,000 square feet of space has been built in Brannon, and an additional 89,240 square feet is planned with the construction of Wendy's, Hacienda Mexican Restaurant, Hampton Inn, an office building, and a car wash next to Spirits Liquor N Party Superstore.

This week, Central Baptist Hospital closed on the purchase of an additional 7 acres near the diagnostic center that it opened earlier this year.

The hospital plans to open a second building with additional office space for physicians, as well as expanded diagnostic capabilities, in the summer of 2009, said Central Baptist spokeswoman Ruth Ann Childers. She said in an e-mail that the response to the diagnostic center "has been overwhelming."

Hughes plans to build two other medical office buildings east of the Central Baptist property.

While Brannon Crossing is often referred to as a shopping center, it's a mix of retail, residential dwellings, a church and even a funeral home with the recently opened Clark Legacy Center. The last offers "celebration of life" ceremonies where pictorial records of the deceased's life can be seen on plasma TV.

The slump in the U.S. housing market has prompted changes on the residential side of Brannon Crossing.

A 70-acre farm that was originally zoned for single-family homes is now the future site for a mix of 360 loft apartments and 225 two-story townhouses and retirement condominiums. The latter would be priced in the $200,000 to $400,000 range, attorney Bruce Smith told the Nicholasville Planning Commission in late July.

The floor plans vary from 788 square feet to 1,206 square feet, which is less than the minimum 1,504 square feet for residences required by the city in a 2005 annexation agreement that brought Brannon Crossing into the Nicholasville city limits.

But the Nicholasville City Commission will be asked to lower the minimum square footage for this part of the Brannon development before returning to the planning commission, Smith said.

The departure of Beazer Homes USA from the Lexington area also affected Brannon Crossing. Beazer had an option to buy 183 single-family lots in Brannon. Only 14 were built.

"I wanted housetops to help my center more than I wanted money off the land," Hughes said. "It's put us back a year in the growth pattern of the center. But the center keeps growing every year."

Hughes said two other companies have expressed interest in building single-family houses in Brannon.

Another bright spot for the development is Limestone Crossing, the University of Kentucky retirement community that will be developed and managed by Florida-based Praxeis LLC. On Sept. 4, there will be a ribbon-cutting and reception at the new welcome center and model home for Limestone Crossing, which will eventually bring more than 450 residents right next door to Brannon.

"It will be a tremendous boon to that immediate area." said David Stauffer, senior vice president of sales and marketing for Praxeis. "As folks age, they don't particularly like to travel great distances for retail or dining or entertainment. And right there within a half mile of the entrance to our community is all of that stuff. It will be a great symbiotic relationship between that shopping center and our community."

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