The case for building a grocery store in NoDa

Avery Hall will begin construction this year on a five-story mixed-use development at the corner of North Tryon and 36th. The New York firm plans to anchor the site with something NoDa neighbors have been asking about for years: another grocery store.

Driving the news: Demolition on the existing buildings at the site starts this week. Over the last year, Avery Hall paid $13.2 million for about 4.2 acres at the intersection, county property records show.

• Avery Hall rezoned the land to TOD-CC, or transit-oriented development-community center, last year, allowing for a wide range of uses. CBJ first reported about Avery Hall’s project in February.
• Construction will wrap up in 2023.

Details: Along with more than 300 apartments, other retail space, public art and two public plazas, the property will have room for a 24,400-square-foot grocery store. That’s roughly half the size of a typical Harris Teeter, and nearly twice the size of the Trader Joe’s in midtown.

• Avery Hall is in active conversations with multiple grocery tenants about the space, but hasn’t signed one yet.
• This store will be considered an “urban format” supermarket — one more typical of large metros where customers can access the store by foot, bike or car, says Tarlton Long, principal and director of Avery Hall Southeast.

“The (NoDa) neighborhood very much resembles where we’re used to working in Brooklyn — walkability, the authentic nature of the neighborhood, diversity of the people who live there and of course the mass transit,” Long tells Axios.

Why it matters: Although NoDa is growing, landing a new grocer is not an easy prospect. The already-complex site selection process is further complicated by the fact that grocers operate on thin margins. That makes them super-cautious when making decisions about locations.

I wrote about this conundrum back in 2018 for the Observer. Grocers consider a long list of factors when deciding where to open new stores, including area incomes, nearby competitors, demographics and traffic patterns.

• In 28206, the zip code where Avery Hall’s project is, the median income was $53,755 in 2017, the most recent year for which data are available, according to UNC-Charlotte’s Quality of Life Explorer. That’s lower than the county median income of $61,695.

For reference: In 28277, which includes Ballantyne, the median income was $100,332.

• Because of that, Ballantyne has long been a safe bet for grocers. Harris Teeter has seven stores in the 28277 zip code. Publix opened its first North Carolina store in Ballantyne in 2014. The organic grocer Sprouts also opened its first store in the state in Ballantyne in 2018.

UNC Charlotte’s data tool shows that grocery stores are concentrated in mostly affluent, mostly wealthy areas in the city’s “wedge.” Grocery stores are farther apart in lower-income parts of town. (Note: A few blocks from NoDa’s main commercial stretch, Giant Penny and Food Lion each have stores along The Plaza).

“It’s a business, let’s face it,” Roger Beahm, a marketing professor at Wake Forest University, says of the grocery industry.

“When you’re going to invest the kind of money it takes to open a new store, to know it’s going to continue to grow and thrive, you want to make sure you’re investing with all your strategic (priorities) in mind.”

That said, smaller grocery spaces (like Avery Hall’s) might become more attractive to retailers post-pandemic because many customers have changed their shopping habits over the last year, Beahm says. “If people are buying more groceries online to have them delivered, it doesn’t make sense to have a big store.”

Zoom out: Thanks in large part to the development spurred on by the Blue Line light rail that opened a couple of years ago, NoDa is one of the hottest, fastest growing areas in Charlotte.

• Just down the street from the Avery Hall site, Grubb Properties is building a huge mixed-use development with offices and about 300 apartments at the old Herrin Ice spot.
• Near 36th and North Davidson, a developer called The Community Builders is transforming the old Johnston Manufacturing mill building into 150 apartments and retail.
• On the other side of North Davidson, Centro Cityworks and Ascent Real Estate Capital are planning a five-story development with apartments and micro-retail.
• Nearby, the Cross Charlotte Trail will eventually run through NoDa, providing more connectivity from the Avery Hall project to the rest of the bustling neighborhood.

Rapid development is driving up property values all over the neighborhood and attracting both popular retailers (like breweries and national chains) and a large number of new residents. The light rail is having a similar impact on growth in NoDa as it did in South End. [Go deeper]

Of note: Avery Hall is working with with Aria Development and Bridge Investment Group. The design team is Avery Hall, BB+M and Land Design. Samet is the general contractor, and The Shopping Center Group are the brokers.

• Avery Hall is collaborating on the development with Aston Properties, the Charlotte developer that owns a renovated building next door. Amelie’s had planned to open in that building but ultimately decided to stay in its current spot on North Davidson.

In a statement, David Coelho, Bridge Development’s chief investment officer, said his team is “committed to supporting responsible growth in the NoDa neighborhood.”

Here’s the site plan for the project, courtesy of Avery Hall: