A downtown for Smith Mountain Lake?

by Deborah Nason
for Virginia Business
June 2006

Nobody knows for sure how many people live around Smith Mountain Lake, but Vicki Gardner has a pretty good indicator that the number is growing rapidly. The executive director of the Smith Mountain Lake Chamber of Commerce has watched its membership climb from 200 to 700 members in the past four years.

The chamber’s growth is just one sign of the change taking place around the man-made lake, which has 500 miles of shoreline. “It has been a metamorphosis, very steady,” Gardner says. “When the lake was formed 40 years ago, it was nothing — a power plant. First came the weekend people, mostly from the North and Florida, who found it accidentally or by word of mouth. Then about 20 years ago, a wave of people came who saw this as the land of opportunity — developers, builders, dock builders.”

Today, they have been joined by real estate firms, boutiques, banks and mortgage companies. Matt White, the owner of Mariners Landing, a resort hotel and conference center on the east side of the lake, says commercial development is trying to keep pace with the area’s residential growth. “Now the chicken is definitely catching up with the egg. There has been more commercial development occurring over the last half dozen years — services follow the people.”

But the number of people living in the lake area is difficult to determine. The shoreline is divided among Franklin, Bedford and Pittsylvania counties, which do not track the populations of lake communities within their boundaries. The chamber’s best guess is that the lake area has about 18,000 year-round residents, up nearly 13 percent from a 2002 estimate by another organization.

Realtor Glenda McDaniel says home prices in the area have doubled in the past four years and now typically cost $300,000 to $2.5 million. She says prices for lots alone now range from $200,000 to $1 million.

Short-term investors played a large part in the acceleration of prices, McDaniel says. “There was a feeding frenzy over the last four years because of [real estate] flippers. The good thing about our local market now is that those guys are pulling back. They used to be a quarter of the market. But now, because their market across the U.S. is leveling off — they’re no longer driving prices up here. Our market is just stabilizing now.”
The surrounding counties have witnessed the effects of the lake’s residential and commercial growth. “Last year, the county approved over $1 billion in rezones, master-planned communities and permits,” says Scott Martin, Franklin County’s director of commerce and leisure services, who adds that the total included permits for three helipads.

Most lake area residents live close to an hour’s drive away from Roanoke or Lynchburg, but any feeling of economic isolation is fast fading as a result of a wave of recent commercial construction. There is no “downtown” Smith Mountain Lake yet, but commercial districts around the lake are in varying degrees of development. Leading the pack is the 140-acre Westlake Towne Center on Route 122 on the west side of the lake. Begun in 2001, it already has a Kroger grocery store, the lake’s first movie theater and many other retail tenants. Other large commercial complexes are being planned in the Westlake vicinity.

Future commercial centers are expected to emerge in other areas around the lake. Also on west side, in Franklin County, are the well-established Hales Ford Bridge area and the emerging areas of Burnt Chimney and Scruggs. Along the east side in Bedford County are the hamlets Moneta and White House. In the far southern region, Union Hall in Franklin County is poised to be transformed with the planned Southlake Towne Center (to be modeled after Westlake).

Some say these new commercial centers will be a boon for neighboring residents. Because of the topography of the lake area (and the fact that no single road system goes around it), a drive to the grocery store can become a 30-mile round trip.

But commercial development is not welcomed by everyone. “There’s a fierce debate [locally] about whether development is good or bad,” says Jerry Hale, a retired marketing executive from Pennsylvania who moved to the lake three years ago after spending 16 summers in the area. Hale says that growth is producing more traffic, a nuisance he was trying to escape by moving. But, he says, change is inevitable. “If you have a wonderful place, you’re going to have more people wanting to go there. The increase in services and businesses is a natural growth that occurs as the population changes from weekend residents to year-round. It’s a good thing — those people need places to shop.”

So what services does the lake area still need? White suggests some areas of opportunity:

• Medical services: “Many residents are close to retirement age. We’re now seeing trainers, orthopedists, eye doctors here. In the next two to three years, you’re going to see a significant difference in the quality of medical services.”

• Arts and entertainment: “We have a movie theater, but no opera.” (The Roanoke Symphony plays occasionally at the lake.)

• Shopping: “This is still not a year-round area” for retail because of its seasonality, says White, but business is picking up in the off season.
Another important service that’s missing: “You can’t order a take-out pizza,” says White. Lake residents take these small hardships in stride. It’s part of being a “laker.” The growing number of year-round residents has begun to develop a strong sense of regional identification. “From an economic perspective, [the lake] is definitely setting itself apart,” says White. “Socio-demographically, it’s significantly different [from surrounding areas] ... It’s bringing a different crowd together.”

The Chamber of Commerce says the lake is drawing increasing interest not only in Virginia and North Carolina, but also Pennsylvania, New York, New Jersey and California. “There’s no other area like this in Virginia or this part of the country,” White says. “It’s very rare to find a lake this large, with the beautiful backdrop of the mountains.”

In fact, with all the economic activity, it’s easy to forget that all of the hoopla centers on a body of water. The Tri-County Lake Administrative Commission (TLAC), established 20 years ago, is a governmental organization focused on protecting the lake. The commission includes representatives of the lake’s three counties, American Electric Power (which owns the lake and manages the shorelines), and other major stakeholders. “TLAC is a creature of the counties,” says Stan Smith, its vice chairman. “It is the interface between the county governments and the lake communities.”

He says navigation, lake safety and the aquatic environment are TLAC’s major concerns. The commission has made recommendations on topics such as waterfowl, septic system maintenance and lake debris. “The volume of business depends on the health of the lake,” says Smith. “And development has become so intense — it’s putting pressure on roads and changing the character of the area.”

One local civic group has taken a proactive approach to protecting the area’s character. Last year the Smith Mountain Lake Association, a voluntary civic group made up of 1,400 members, initiated a process to review and endorse commercial development plans that meet certain criteria. Three projects have been endorsed so far. “We recognized that the lake is going to be developed,” says Bruce Dungan, the organization’s president. “So let’s make sure that the development is the right kind of development. I think we’re seeing a change in the developers’ attitudes. They want their development to be seen as environmentally friendly and fitting in with the community.”

The lake’s amenities, in fact, are helping local counties pull in new industry. In May, Franklin County announced that McAirlaid, a Germany manufacturer of absorbent materials, will establish its U.S. corporate headquarters in the Franklin County Commerce Park. The company expects to invest $85 million and create 160 jobs. “The company saw the lake as an asset for entertaining prospects, and as a place for its executives to live,” says Martin of Franklin County.