~ Mara Grunbaum, photo by Jason E Kaplan
Warmer weather means the sidewalks on North Mississippi Avenue are bustling, but almost as abundant as boutiques and bicycles these days are windows bearing “for lease” signs.

With several new development projects opening now or in upcoming months, the street is flush with available residential and retail space. That could be a boon for a rapidly growing neighborhood, which Mississippi has been for the last several years. But in the currently sagging economy, developers who undertook projects in fatter times are now finding it hard to move people — and their businesses — in.
 

“It’s a challenge; I’m not going to lie to you,” said Sam Rodriguez of Trammell Crow, the development company behind the Tupelo Alley project at North Mississippi and Failing streets. The three-building apartment and retail complex opens this month.

Rodriguez said the project’s 188 apartment units have been leasing at an encouraging rate, but when it comes to renting out 10,000 square feet of retail space, “It’s definitely a challenge because of the economic times that we’re living in right now. A lot of retailers are struggling.”

Up the street at the Mississippi Avenue Lofts, a condominium complex nearing completion, two of three ground-floor retail spaces sit vacant, despite being marketed for over a year. Chateau Mississippi, a two-floor retail building on North Mississippi and Shaver streets that opened in March, has not yet signed any tenants.

In total, over 30,000 square feet of new retail space is on the Mississippi Street market, but only a small fraction of it has actually been leased out.

“It’s sad that there’s all this space being created that’s not being absorbed,” said the Portland Development Commission’s Sara King, who manages the urban renewal area that Mississippi Street occupies. “It’s an unfortunate situation for the developers and for the residents when there are vacant storefronts.”

Not every empty window is a newly constructed one. Last year, Jennifer Wallingford struggled to afford the rent for her home décor store, Hovel, at Mississippi and Shaver. When she had an opportunity to opt out of her lease in November, she moved across the street to share a space with Bella Norte antique shop. The business that expanded into Wallingford’s old spot lasted only a few months before it went under, and now that space sits vacant.

“And more spaces continue to open,” Wallingford said. “We have brand new, beautiful retail spaces, with all the bells and whistles, that have just been sitting.”

That means developers who don’t want their new properties to languish are vying extra hard to win the favors of potential retail tenants. Earlier this year, a rumor circulated along Mississippi that Trammell Crow was offering a year’s free rent to businesses that moved in. That’s not true, Rodriguez said, but the company is negotiating deals that would give retailers one to three months of complimentary time, depending on the space they take on and investment they put forward.

Chateau Mississippi owner Brian Dreisse said he’s also offering incentives to potential tenants, though he declined to give details.

“Certainly people are looking at getting exceptional deals, because there’s a lot of ‘for lease’ signs,” Dreisse said.

Despite the slowdown, the mood on Mississippi isn’t gloomy. Historic Mississippi Business Association Secretary Bridget Bayer, who works with people who want to start small businesses, said her workload has ramped up in recent months.

“I’ve seen more clients in the last four months than I did in the last year,” she said, perhaps because the laid-off are looking for alternatives.

King, too, noted that the PDC has fielded a surprising number of inquiries lately about small business loans. If those turn into actual businesses, they could start to fill the space on Mississippi and elsewhere.

“It’s an exciting time to be an entrepreneur, because you might be able to find some cheaper lease rates,” King pointed out.

King thinks it will take some time for the economy to recover and for neighborhood development to regain its momentum. But, she added, “I’d rather have a vacant space on Mississippi than a lot of other streets, because it’s probably going to bounce back sooner.”

Mississippi’s developers are also pushing ahead. They say they’re in discussions with potential tenants, and they expect things to move ahead — if slowly.

“I see positives coming,” Dreisse said. “I know that things are difficult right now, but I know that things will change and go for the better.”

Rodriguez said Trammell Crow is still “very bullish” on the Tupelo Alley project, and he takes the neighborhood’s past as an indicator of its resilience.

“This street has made it by itself,” he said. “This is a street that has built itself from rags to — I won’t say riches, but to a very interesting, very eclectic and vibrant place. So we’re trying to encourage that.”