Developer puts brakes on planned Nashua retail project

As the economic slump takes its toll on the retail industry, plans to build a major shopping center in Nashua appear to be on hold.

The developers of Nashua Landing, an upscale, open-air shopping center planned for the former Hampshire Chemical site behind Daniel Webster Highway, have asked the city for a project extension.

Site plan approvals have a shelf life of one year, meaning if a developer doesn’t seek building permits within that time, the approval is void. The Nashua Landing project was OK’d July 11, 2007.

At that time, an attorney representing one of the developers said ground could be broken within three to six months. Completion was slated for 2009. But, not a blade of grass has been disturbed at the riverside site.

The project’s lead developer, New England Development, of Newton, Mass., didn’t return multiple calls for this article. However, one of the only retailers to publicly sign on, Whole Foods Market, says it’s still on board and excited about the project.

Nashua Landing, as proposed, is a 600,000-square-foot “lifestyle center” with retail shops, restaurants and a movie theater. Lifestyle centers are different than malls because they simulate Main Street shopping, with storefronts accessed from the street. These days, they’re also trendier than malls among developers.

The project was approved without much fanfare – particularly when compared to recent shopping center proposals in Hudson and Merrimack. Those projects were met with strong opposition from resident groups, particularly about increased traffic.

The Hudson project, dubbed Riverplace, was scrapped last year as a direct result of Nashua Landing. The much larger Hudson lifestyle center, to be built right across the river on a 36-hole golf course, had been inching its way through the approval process for a year and a half.

In May 2007, W/S Development, of Chestnut Hill, Mass., jumped ship and partnered with the Nashua Landing developers, New England Development and Newton, Mass.-based Packard Development.

Changing retail landscape

The Merrimack outlet mall plan is still in limbo four years after it was introduced. The proposal was tied up in a resident petition, a referendum and a lawsuit over the petition, but is now undergoing site plan review.

Nashua Landing was given the OK just two months after the site plan was publicly introduced.

But less than one year after that seamless approval process, the retail landscape has changed considerably.

In the first three months of 2008, as the economy continued to sour, there was a rash of retail store closings across the country, according to the International Council of Shopping Centers. Nearly 30 retail chains announced plans to close a total of more than 2,000 stores.

The number of closings for January through March met or exceeded previous first-half year totals, according to the New York City-based council. And nearly 40 percent of affected establishments were clothing stores – which make up the bulk of the tenant base in lifestyle centers.

In May, the retail market saw a slight boost, with U.S. chain store sales increasing 3 percent over 2007, the council reports. But most of the increase came from wholesale, drug and discount stores – which suggests consumers are spending their money conservatively.

Lifestyle centers tend to represent the opposite end of the retail market, with mostly high-end retailers.

New Hampshire’s retail market is facing similar challenges right now, but perhaps not to the same degree as much of the nation because there’s no sales tax here, according to Nancy Kyle, president and chief executive officer of the Retail Merchants Association of New Hampshire.

“The cost of gasoline is rising. The cost of food is rising,” Kyle said. “Consumers don’t have a lot of disposable income.”

There’s no way to tell if economic concerns are to blame for the Nashua Landing delay. But Nashua lawyer Gerald Prunier, who represents Packard Development, said it isn’t unusual for developers to request extensions.

“This is happening with many projects, if you go back and look at the planning board minutes,” Prunier said. “Many developers are looking to get an extension because of the market right now.”

Nashua City Planner Roger Houston said the Pheasant Lane Mall has also asked for more time to break ground on its lifestyle center plan. Shortly after Nashua Landing plans were announced, the mall unveiled plans to demolish the vacant Macy’s building and create a wing of open-air shopping in its place.

The Pheasant Lane Mall, also on the bustling shopping corridor that Daniel Webster Highway has become, is only about one mile down the road from Nashua Landing.

The Nashua Landing delay also means the city will have to push back the start of road work to improve portions of Daniel Highway and Spit Brook Road, according to Steve Dookran, the city’s engineer.

The city has long planned to realign intersections and do some widening from Spit Brook Road to the Massachusetts line. But the project was fast tracked because Nashua Landing made the improvements crucial, Dookran said.

Nashua Landing developers have committed up to $1 million for the project, but haven’t yet handed funds over to the city, Dookran said. And right now, the city is nearly $400,000 short of getting the project under way. – ASHLEY SMITH/THE TELEGRAPH