The heart of a city
City Center at Oyster Point combines office, retail and homes to create a downtown for Newport News

by Donna C. Gregory
for Virginia Business
September 2006

The decision to relocate to Newport News’ City Center at Oyster Point wasn’t difficult for boutique owner Joy Wynings.

“ The idea that we could expand and offer our services to heavier foot traffic was just a dream,” she says.

Yet, Wynings never expected Sisters Unique, a home décor and gift store she runs with sister Kaye Kaminski, to see more customers in a single group than its store used to see in an entire day at its previous location in the historic shopping district of Hilton Village.

Perhaps that’s because the sisters have moved “downtown.” Before the mixed-use center took shape off Jefferson Boulevard, Newport News didn’t really have a downtown — at least not in the classical sense. There was no identifiable central gathering place. Instead, what served as the downtown area included city offices and a shipbuilding research center, all in the shadow of Northrop Grumman Newport News, the city’s massive shipyard and largest employer.

City Center, by contrast, doesn’t have an industrial feel. It combines distinctive shops with Class A office space and luxurious residences in a setting reminiscent of Main Street America. A 5-acre fountain serves as the focal point for a public plaza where people come for community events. There are benches for lounging and brick sidewalks for storefront browsing.

Just a short walk from Wynings’ shop is the new upscale Marriott hotel and conference center. From its 11 stories stream a steady flow of guests from across the country who stop by Sisters Unique to browse its collection of fabrics and furnishings. “It is so wonderful to meet people from all across the United States. We have already shipped six purchases,” says Wynings. “I don’t think that would have happened in Hilton.”

During lunch, she sees business folks on their breaks from nearby offices. In the evening, residents from the development’s Park Place Apartments trickle in after dining at one of the center’s restaurants. Then, there are weekend concerts at the fountain, which drum up more foot traffic. “The sky’s the limit here, because people are working and at dinner. … From here, we are getting the J. Jill crowd; we’re getting the Chico’s crowd.” In fact, adds Wynings, since opening in June, “We’ve more than doubled our sales [for the month of July], and we have done no advertising.”

The nearby Marriot is seeing similar growth. Within a month of its June opening, the 256-room luxury hotel reported occupancy rates of 85 percent. “The need was here,” says Rick Thompson, the hotel’s director of sales and marketing. “There was not a full-service, four-star hotel from Norfolk to Williamsburg.”

Reportedly one of the nation’s largest public/private mixed-use developments, City Center is expected to be fully built out in 10 years. By then, private investment is expected to total $425 million. “It’s a once in a lifetime opportunity to participate in a development that will have a transformational effect on a community,” says Bill Hudgins, president of HL Development, an affiliate of NAI Harvey Lindsay Commercial Real Estate and City Center’s developer. “I think what we will be able to do is to put the bones of a new downtown together in a 10-year period.”

The power of water
It all started with a fountain — a sparkling, 5-acre fountain. In 1995, the Newport News City Council voted to spend $5 million to construct the fountain and a road system. At the time, a murky storm water retention pond covered the site. It was part of the city’s Oyster Point Business Park, which had been under development since the 1970s. The city had held tight to Oyster Point’s core, realizing even back then that the property held promise for the city’s future. Warehouse, manufacturing and office buildings skirted the fountain site, but little else. “We thought that putting in the fountain with the circular road would help people visualize what the potentials were,” says Newport News Mayor Joe S. Frank.

Months went by and then years. Proposals to develop the property came and went. Then a former member of the City Council came to Frank with plans to put an office building around the fountain. “[His plan] wasn’t big enough or significant enough,” recalls Frank. “Three weeks later, a former mayor came to see me and said he’d like to put up a 3-story building and I said, ‘Over my dead body.’ I suggested they get together and put together something significant. They did and came up with this concept.”

At completion, City Center will boast 1 million square feet of office space, 225,000 square feet of retail and 600,000 square feet of residential. The development is well on its way to meeting that goal. In July, City Center reached the halfway mark on office space. “By October or November, we should be fully leased.” says Hudgins.

Its Class A office space has been key to City Center’s success. “In attracting high-paying jobs, it was important for the community to have a competitive environment to attract government contractors. To be competitive in that environment, you need to offer the finest office space available,” says Hudgins.

The strategy evidently worked, because City Center has already scored long-term leases with notable government contractors, including Lockheed Martin, C2 Technologies and Alion.

Getting the retail customer
The next big challenge was enticing retailers to locate in what was previously just an office park. Yet, national retailers have been likened to teenage girls: Where one goes, the rest will follow. City Center’s retail core now includes Chico’s, Talbot’s, Coldwater Creek, J. Jill and other national retailers in addition to locally owned specialty boutiques such as Sisters Unique.

Residential demand has been strong at City Center’s Park Place Apartments. “People like the whole concept of the city center,” says Tammy Davis, property manager. “They like the shopping, they like the restaurants being nearby ...”

Once the four-building complex is completed in October, Park Place will offer 361 luxury apartments with amenities including a swimming pool, covered parking, garden tubs, gourmet kitchens and a fitness center. “Some have fountain views,” adds Davis. “You can open your windows at night and hear it.” Monthly rents will range from $872 for a one-bedroom unit to $1,504 a month for three bedrooms.

City Center also will include two condominium projects: The Point at City Center with 51 luxury condos set to open next spring, and the Meridian at City Center, an 18-story residential tower that will connect to the Marriott.
While the Marriott is aimed at serving business and industry, guests so far have been primarily leisure travelers. “Location is the biggest reason why people are picking us,” says Thompson. “I think we are a stop-off point from the North on the way to the Outer Banks and other locations.”

Bookings at the adjoining conference center are also steady, as brides schedule wedding receptions and charities reserve space for special events. The center is owned by the city as part of its public-private partnership with HL Development. The city also owns the development’s three parking garages. So far, Newport News has contributed $87 million for City Center, including the conference center, garages and infrastructure. The city expects to collect $4.65 million in tax revenues from the project in 2008, and that figure doesn’t include future development already in the planning stages.

City Center is already providing a boost in jobs. Currently, 1,600 people work here; by full build-out, the number is expected to rise to 4,500 jobs.

In July, HL Development broke ground on an office building adjoining the conference center. It will be anchored by another 17,000 square feet of retail. Then, there’s another block waiting to be developed which Hudgins refers to as the “opportunity block,” — a perfect spot, he says, for perhaps a cinema or multi-floor department store.

Frank considers all of City Center an opportunity. “Projects like this are not the product of any one person. It’s the product of a lot of hard work and a lot of dedication and a lot of risk-taking. We’re seeing the fruits of our labor, and I think this is just the beginning.”