Once again the reporters at Richmond BizSense have put on their walking shoes to scout out conditions in local real estate markets. This time they have set their sights on Shockoe Bottom. The mixed use entertainment district is showing signs of recovery from the devastating flooding of Hurricane Gaston in 2004, but the vacancy rate exceeds 20 percent.

Turnover in restaurants and bars is high, the online business pub concludes. Of 43 buildings counted, only 29 were occupied. Ten were vacant and four were undergoing visible renovation. The 23 percent vacancy rate compares to a 6 percent rate for Richmond area retail.  

Rachel Flynn, director of community development for the City of Richmond, told Richmond BizSense that most of the buildings that appear vacant are under some stage of renovation, even if they appear to be lifeless. “It’s a work in progress. Confidence in that area is rebuilding, and now they’re taking it one building at a time,” she said.

Everybody’s worried about the economic slowdown, and businesses are more cautious about committing to commercial and retail space, reports Thalhimer/Cushman & Wakefield in its most recent quarterly research report, “Market Beat,” on the Richmond commercial real estate market.

The vacancy in commercial office space actually declined to 7.8 percent from 8.8 percent the same quarter a year ago, but vacancy rates are likely to rise now that Wachovia Securities, which is relocating its offices to St. Louis, has put nearly 450,000 square feet of office space at Innsbrook and Riverfront Plaza up for sub-lease. “The space willl likely fetch below-market rates,” Thalhimer reports.

Meanwhile, the average rental rate for the Richmond region slipped from $20.77 per square foot in the 2Q last year to $19.39 in the 2Q of 2008. “Landlords are becoming more aggressive to secure tenants. Incentives such as shorter lease terms, higher tenant improvements and upfront free rent tacked onto the lease are becoming the norm.”

MeadWestvaco Corp. has reported second-quarter profits of $56 million, up from $28 million the same quarter a year ago. Strong revenue performance driven by price increases, sales in emerging markets and growth in global packaging more than offset $64 million in higher energy, wood and freight costs.

Said CEO John Luke: “While we continue to address cost challenges by going after price increases in the marketplace, we are also pressing ahead with our profitable growth strategy – including a focus on innovative solutions, growth in emerging markets and relentless productivity improvement. The overall progress of our global packaging business demonstrates that these strategies are working, and are helping us continue to build a sustainable competitive advantage in the global marketplace.” More.

Wyeth Consumer Healthcare, a division of pharmaceutical giant Wyeth, has announced its intention to close its facility on Cummings Drive in North Richmond. The site houses offices for several of the division’s business functions.

Most employees will move to Wyeth’s Global Product Development facility on Sherwood Avenue; a small a number may relocate to other facilities in Henrico County. All moves are expected to be completed by early next year.

The Cummings Drive facility, constructed in 1952, has undergone numerous renovations to accommodate manufacturing infrastructure, development laboratories and administrative offices. The complex originally served as the corporate headquarters of the old A.H. Robins company, which was acquired by Wyeth in 1989. Production and lab support operations were discontinued in 2006.

The Richmond Times-Dispatch has hired a video business development manager to devise “video solutions” for the newspaper’s inRich.com website. Rick Thornton, a senior editor at the Times-Dispatch since 2004, will take charge of the initiative.

Thornton's unit will include videographers and sales focused solely on advertising. "We¹ve made a lot of strides with news video. Now we need to advance video as an effective tool for advertisers to reach customers and keep the cash register ringing," stated Thomas Silvestri, publisher of the Times-Dispatch.

Thornton was part of a special “innovation team” formed earlier this year to examine new advertising opportunities. Said inRich.com General Manager Michael Fibison: "We are eager to learn as we innovate in this expanding medium."

Southern States Cooperative has unveiled a new website that upgrades its search engine, allows visitors to register for information updates, prominently features selected agricultural products and provides easier access to articles on topics from raising meat goats to maintaining chain saws. More.

Dominion, a national producer of electric power, will continue to operate the Salem Harbor Power Station in Massachusetts in compliance with strict environmental regulations.

"Salem Harbor has demonstrated that it is a viable, reliable and an environmentally sound resource for meeting the growing electricity demands of the Boston area," said Mark F. McGettrick, CEO of Dominion Generation, the company unit that operates its power stations. "We are confident that we can economically meet the requirements of tough, new Massachusetts and regional environmental laws that will take effect in the next few years."

Since Massachusetts established its stringent air emission regulations, Salem Harbor has reduced sulfur dioxide emissions by 79 percent, nitrogen oxides by 77 percent and mercury by 85 percent. Dominion purchased the Salem Harbor power plant in January 2005. The station has three coal-fired units and one oil-fired unit with a total generating capacity of 745 megawatts, enough electricity for about 745,000 homes.

Timmons Group, a civil engineering firm, has been awarded two new contracts for projects in the Richmond area: The Outlet Shoppes at Richmond and Spring Rock Green.

Scheduled for an opening in the fall of 2009, The Outlet Shoppes at Richmond will accommodate approximately 365,000 square feet of tenant space with over 90 shops in the first phase of development. Located at the Interstate 95-Lewiston interchange in Hanover County, the project will open this fall adjacent to the Bass Pro Shops. Timmons will provide civil engineering services for the joint development partnership between Holladay Properties, of South Bend, Ind., and Horizon Group Properties, Inc., of Rosement, Ill.

“Spring Rock Green” is a redevelopment project situated in the northeast quadrant of Midlothian Turnpike in Chesterfield County at the site of the current Beaufont Mall. Plans are to provide more than 440,000 square feet of retail/office space on 47 acres of property. Timmons will provide civil engineering services to the developer, the Los Angeles-based Bond Companies, which specializes in urban infill projects, incorporating sustainable design services in order to obtain Silver LEED certification for the project.  The project is expected to be completed by the fall of 2009. More.  

While the masters of the financial universe in New York and other banking centers like Charlotte, N.C., are writing off hundreds of billions of dollars of sub-prime mortgage loans, small-time bankers appear to be making it through the economic slowdown in fine shape. For the most part, community bankers stuck to their knitting -- lending to customers they knew rather than “securitizing” millions of fancy-pants mortgages, divvying up revenue streams in tranches, and selling them off to investors without the remotest connection to the borrower.

For the most part, regional and community banks also have been content to grow organically rather than turbo-charge earnings growth through massive acquisitions, only to discover the stink bombs hidden in the “assets” they acquired -- that’s what crippled Wachovia, which recently announced $8 billion in write-offs, Neither have they leveraged themselves to the hilt like the super-sophisticates in Gotham. (Of course, super-sophisticates like the executives of investment banker Bear Stearns, Washington-based Fannie Mae haven’t hesitated to come groveling to the Federal Reserve Board for bail-outs, ultimately to be paid by us provincial rubes in the form of higher taxes and/or lower interest rates on our investments.)

In contrast to the Savings & Loan fiasco of the early 1980s, which sucked in hundreds of community savings institutions across the country, local bankers managed to resist the siren call of effortless profit in this latest manifestation of “popular delusions and madness of crowds” -- a fact for which their small business borrowers can be most thankful. While the sub-prime fiasco has hobbled the residential real estate industry and portions of the financial industry, the credit crunch has not yet spread to other sectors of the economy. That’s why the economy continues to grow, albeit fitfully, in the face of the subprime fiasco and record high oil prices.

First Capital Bancorp, Inc., the bank holding company for First Capital Bank, announced a 6.7 percent increase in earnings, to $362,000, for the three months ending June 30.

Growth was fueled by a 32 percent increase in deposits, up $69 million from the same quarter last year, and a 29 percent increase in net interest income, attributable to a 47 percent growth in the loan portfolio partially offset by aggressive interest rate cuts by the Federal Reserve Bank. Nearly 40 percent of the bank's loan portfolio is tied to the prime rate. Expenses increased as the bank added a branch and made "key additions to the lending team."