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Harris led by example. He purchased the old opera house, the largest unoccupied building on Center Street. Built around the turn of the century, it was once the entertainment draw of downtown. But when Harris bought the building, it had been vacant for 12 years.

Working in accordance with historical guidelines -- so he could qualify for tax credits -- Harris gave the old building new life. It now houses two artist studios, four loft apartments and Harris' own Opera House Gourmet, a specialty wine and cheese shop. The two-bedroom apartments fetch rent of about $1,000 a month, among the city's highest.

"We couldn't compete with malls, shopping centers and big box stores. So we had to create attractions, reasons for people to come to Old Town," Harris says. The result is a cultural and historical center. There are museums, galleries, a professional ballet company, professional and community theaters and an eclectic mix of restaurants. "Maybe the turning point was when we started getting businesses that were misplaced in shopping centers. When these businesses came downtown, their business went up," he says. Kramer Music, for example, rehabbed an old church and turned it into a shop and theater. Fifty-seven new businesses have moved into Old Town, bringing the total to more than 200.

Old Town Manassas isn't alone: Cities across the commonwealth are turning tired downtowns into the business and cultural destinations they once were. Others are creating new commercial centers in suburban settings within the city limits. After decades of losing ground to surrounding counties, Virginia's cities are attracting significant commercial development and redevelopment.

Strong central cities make economic sense, according to participants in the Virginia Main Street Program, a division of the Virginia Department of Housing and Community Development. There are 17 Main Street communities in the state, and Manassas is one of them. Between 1985 and the end of last year, these communities generated net gains of 1,539 businesses and 3,723 jobs. "For small businesses, a revitalized downtown is a great place to do business. In communities with active downtown organizations ... there is ongoing management to market the district, to enhance business and to help with building improvements," says William C. Shelton, director of the Virginia Department of Housing and Community Development.

In Manassas a donor gave the city an old candy factory, a three-story building just outside downtown, "that has not been a contributing building for 35 years," Harris says. Under the terms of the donation, the city is turning it into the Manassas Center for the Arts, the centerpiece of its City Square revitalization project.

"We encourage a variety of uses in our Main Street downtowns -- more than just retail, more than just office," says Louellen Brumgard, who manages the Virginia Main Street Program. "Downtowns started as a vibrant mix of housing, shops, services, entertainment and cultural and government institutions. All these same elements are still important in today's downtown, but they may have a different look," with smaller shops and services rather than one large department store.

That's the way Old Town Manassas is shaping up. Harris subsequently purchased the building next to the opera house and rehabbed it, too, turning it into space for another art studio, a gift shop and atrium apartments. Others have followed suit. Only one building in the city's Old Town is vacant today, Harris says. "It's been a good partnership between the city and private sector."

* * *

When Richmond native John Woodward returned to the city last year to be marketing manager for the office of economic development, it was a different city than the one he had left 15 years ago. For one thing, there's an enormous cooperative effort between the city and its outlying counties.

The best example is the $160 million expansion of Richmond Centre, the city's downtown convention facility. Richmond and the surrounding counties are all involved in this massive project, making it the largest cooperative regional investment in the state, Woodward says.

The convention center is only part of what's going on downtown. There's also a major riverfront development around the city's recently restored canal system. "Those are the two 800-pound gorillas that represent major development themselves and are spurring ancillary development," he says.

The riverfront revitalization incorporates 32 acres, including 22 acres set aside for commercial development and 10 acres of walkways and plazas along the restored canals. In addition, Woodward points to Media General's decision to stay downtown and build its new headquarters there, the redevelopment of old tobacco warehouses into multifamily residential, the Virginia Biotechnology Research Park on the northern fringe of downtown and Crestar's new Riverfront Center across the James River from downtown.

To show people the vitality of the city, a consortium has developed television commercials to counter lingering perceptions that downtown Richmond has lost its luster.

In the early '90s, those perceptions were accurate. Thalhimers and Miller & Rhoads, the two downtown department stores, closed. The city-financed Sixth Street Marketplace and Main Street Station, designed to turn the city into a retail destination, were flops. And upscale commercial development migrated to the Innsbrook area, a suburban office park 12 miles west of downtown. But as the decade comes to a close, the city is making a strong comeback as a commercial center. Perceptions are on the mend, particularly in the business community.

"It's easier to market the city ... to outsiders than it is to locals," Woodward says. "It's an entirely different sales pitch because outsiders come in without preconceived notions and immediately see the opportunities. With local people, I have to show them the Richmond that the outsiders are seeing."

* * *

In Martinsville, the Patrick Henry Development Council has its offices in the heart of the old business district. "Being in the middle of uptown makes a very good initial impression. It's important to the quality of life that we don't have empty buildings," says Brook Hankins, marketing manager for the group.

Uptown suffered during the past decade. A suburban mall built in 1989 pulled retailers out of the business district. One by one, Martinsville's three downtown department stores closed, leaving behind deteriorating buildings.

But community organizers started working to reverse the trend, and in 1995, Martinsville received Virginia Main Street status. Using the program guidelines, owners worked to rehab and renovate their buildings. Some required facelifts -- paint or new awnings. Others required more substantial work to make them suitable for the types of business uptown wanted to attract.

Uptown now features a mix of service businesses, a wide variety of restaurants, a new bridal shop, jewelers, a health food store, furniture stores, clothing stores and a number of small insurance, accounting and law firms. Occupancy on Church Street is nearly 100 percent and on Main Street, "it's coming along," says Debbie Hall, executive director of the Martinsville Uptown Revitalization Association.

The business district looks better than it has in years. "There's a unified aesthetic appearance for uptown that makes a tremendous visual impact. We also worked with the city and a foundation to acquire new planters, hanging baskets, benches and trash receptacles," Hall says. The image is one of a small city on the upswing.

"In the past year, we've had a net gain of seven new businesses in uptown. We have also seen a net increase in jobs, but they're not huge numbers because these are smaller businesses," Hall says.

That's slowly changing. Martinsville City Schools will be relocating its offices to an uptown building, and court-related offices will be housed in new construction nearby. Also the city and Henry County have combined their social services departments and relocated to uptown. "With those three moves, we're seeing larger numbers of people coming in, rather than the typical two to five employees we see with retail stores," Hall says.

* * *

Suburban growth is usually seen as an encroachment on the commercial health of a downtown district. But in at least one area of the state, there's hope that suburban retail growth will actually boost business across the board.

Fredericksburg has the history to attract tourists. And what do tourists really like to do? Shop. Retailing "is an extremely large component of tourism today," says Jud Honaker, vice president of the Silver Cos. "The fact that Fredericksburg has so much history here is a tremendous catalyst."

What the Silver Cos. hopes to do is turn 2,100 acres on the northern edge of Fredericksburg into a massive mix of shopping, golf, historic and cultural attractions. The project, dubbed Celebrate Virginia, would have 2.4 million square feet of retail space and a resort with five golf courses surrounded by 4 million square feet of office space. There also would be a 600-acre visitors campus with a state-run welcome center and a state-of-the-art Imax theater, plus ecotourism offerings like canoeing and fly fishing along the Rappahannock River.

The project has the backing of Gov. Jim Gilmore for the state's share of the project, including a crucial exit off Interstate 95, but so far it's just a plan. Work is under way on environmental and historical reviews, transportation studies, and so on. But it will be months before Honaker can even begin marketing the project.

Still, if the project is built -- and that's a big "if" -- it could have a dramatic impact on Fredericksburg, a city of about 22,000 people. The city's historic downtown retail area has already had to reinvent itself once. Twenty years ago, retailers fled downtown for new strip shopping centers and a new mall in a neighboring county. The city polished the downtown district with brick sidewalks and other amenities, and the empty buildings filled up with boutiques and specialty shops. It's not just for tourists, however. Locals come to downtown's coffee shops, outdoor cafes and restaurants, including an upscale eatery in a renovated 1910 train station.

Proponents of Celebrate Virginia say the city's downtown will get a boost in business from the thousands of visitors the new project will draw. But some downtown merchants worry the ambiance they've created will be lost. They fear that the Silver Cos. leaders may decide the market won't support the Celebrate Virginia concept and instead build what Bill Beck, owner of a downtown antiques store, calls "900 acres of cheap shopping." If that happens, "Fredericksburg in the minds of people up and down the East Coast becomes not the quaint town, it becomes, ÔOh yeah, that's the place where I got my socks or underwear at a better price than anywhere else,'" Beck says. "In the long run it could have a negative effect on stores like mine that, frankly, need to be known as being in an attractive and historic setting."

The Silver Cos. already has changed Fredericksburg's economy with the construction of Central Park, a cluster of big-box stores like Target and Best Buy scattered along a strip of asphalt called Carl D. Silver Parkway. The site opened in 1995 on land adjacent to the proposed Celebrate Virginia site. Central Park has 1.3 million square feet of retail space and room for 1 million more. City leaders love Central Park because it finally gave them a share of the tax revenues from retail sales that neighboring Spotsylvania County had enjoyed for years.

The Central Park shopping area is no tourist draw, but the company is close to finishing a unique part of the project. It's called Uptown Central Park, a 285,000-square-foot Art Deco development of cafes, specialty shops, offices and entertainment. That's the biggest worry for downtown business owners now, Beck says.

The Celebrate Virginia project has produced hard feelings among some residents who think the City Council rushed through the project's rezoning last summer. A group of residents has circulated petitions seeking to have the council members removed from office. But one of the project's biggest boosters, first-term Mayor Bill Greenup, hasn't backed off his support. The project "will move Fredericksburg from being a pass-through to a destination" for tourists, he says. "I support it enthusiastically."

* * *

On a warm spring day, Aubrey Watts had a hard time finding a table at the many restaurants along Charlottesville's Downtown Mall. That might frustrate impatient workers on short lunch breaks, but Watts, the city's economic development director, was pleased with what he saw -- a bustling and vibrant central business district.

Long known for its retail shops and restaurants, there's a quiet evolution going on along the mall. Second floors of buildings housing retail shops and restaurants are being turned into a "rabbit warren of high-technology offices bustling with high-powered activity," says Walt Levering, president of the Virginia Piedmont Technology Council.

As these companies get larger and require more space, many are staying in town. One example is SNL Securities, which began in the city in 1989 with 15 employees. In December, the company moved to new headquarters -- a former department store rehabbed to house 50,000 square feet of office space. More than 250 employees work there now.

Reid Nagle, president and publisher of SNL Securities, says the building was in dire need of renovation. After the department store moved out, Jefferson Bank used the building for an operations center, but it was only temporary space. By the time SNL acquired it, "it was a tattered, worn down facility. It was largely a windowless building because department stores don't have many windows, to maximize shelf space," he says. The new design has 19 new windows. Aluminum panels were replaced with clear glass.

It's a cutting-edge design on and beneath the surface. As part of the renovation, the building now houses a high-speed data network and a web of 1,100 cables. There are redundant air-conditioning systems, a centralized battery backup system and a server room with fire suppression equipment.

What's going on invisibly in Charlottesville is critical to the city's economic development -- the creation of a high-tech infrastructure that Nagle and others hope will turn Charlottesville into a high-tech mecca. High-tech businesses can sprout just about anywhere, but a university town with a solid base of companies can be a powerful magnet. William Harvey, business development specialist for the city's Office of Economic Development, notes that the city consistently gets high ratings as a great place to live, raise a family and start a business. His department has been recruiting tech companies. "Quite a few have relocated to the area. ... Charlottesville is small enough to be small, but big enough to be big," Harvey says.

Levering, a managing partner with Dax Media, cites the work of companies like Kesmai and Boxer Jam, leaders in the Internet game industry. Their applications, which allow users concurrent online access and interplay, have tremendous potential. "Online gaming has established these companies' reputations, but the technology is translatable to other industries," Levering says. "The joint is jumping. There is world-class stuff happening here."

* * *

The historic charm of Old Town Alexandria's cobblestone streets and Colonial architecture brings droves of tourists to the city. It works wonders on companies, too.

Two of the city's main industries -- associations and technology companies -- find the city a good place to set up shop, says Eric Dobson, deputy director of economic development. "What they find attractive about the city is that they can be in a real place, as opposed to some nondescript area in the suburbs."

Of course, location helps. Washington, D.C., is just across the Potomac River, so Alexandria gets associations that want a home near the nation's capital but don't want to pay for a K Street lease. The city of 118,000 residents has 300 associations employing nearly 10,000 workers. Tech companies number about 200, with more than 10,000 workers. Office space leases for about $30 a square foot, and the city has a 4 percent vacancy rate, Dobson says. "So the demand is there."

New office space is being built, but Dobson says these projects aren't for newcomers. "The majority of our new construction is for expanding businesses," he says. As companies move to bigger space, though, others are quick to move into their old offices. The Association for Supervision and Curriculum and Development, for example, is now in its third Alexandria location. Four years ago, Time-Life Inc. moved its book publishing offices from one Alexandria location to a newly built one seven blocks away. Its old home, a 141,000-square-foot building, is being renovated to house about a dozen new tenants, from small associations to a law firm.

The biggest projects in the city aren't going in Old Town, though. The Time-Life building, for example, is in a 4.5 mile, 500-acre corridor along Eisen-hower Avenue on the city's southern edge just west of Old Town. Seven years ago, the land was mostly vacant lots and out-of-use industrial sites along a rough-looking street. It had been owned by Norfolk Southern, but that use was phased out, and in 1992 the city rezoned it for commercial use as part of its new master plan. Since then, the street has been landscaped and widened, and a new federal courthouse has gone up, along with a handful of new condominiums and office buildings. This spring the consulting firm A.T. Kearney moved into a 167,000-square-foot building there, and a 130-room Homestead Village extended-stay hotel was built.

Transportation access to the avenue got a boost in 1997 with the opening of the new Eisenhower interchange with Interstate 95, which runs just south of the avenue. That gives the corridor three interchanges and three stations on the region's Metro subway system.

City leaders are trying to bring a major tenant to Eisenhower Avenue: The U.S. Patent and Trademark Office is looking for a new space and is considering two sites in the area. Alexandria and neighboring Arlington County are the finalists for the new building, which would be a 2 million-square-foot facility. City leaders call the patent office their top economic development goal and hope it will spark more office and retail development.

Agnes Artemel, director of the Eisenhower Partnership, says it will probably take 20 years for the area to be fully developed. Industrial uses still dominate the west end of the avenue, she says.

Like much of Northern Virginia, Alexandria has been hurt by stagnant real estate values of the past eight years. The average residential property in the city actually dropped in value 3 percent from 1991 to 1998, and real estate taxes went up last year for the first time in five years. Now, though, city officials are predicting a 4.6 percent rise in property values and hope the new development and demand for commercial space will help drive the increase.

"Obviously the Northern Virginia economy is very strong," Dobson says. "We feel we're an important part of that."

* * *

Four years ago, Panasonic was looking for a place to open a new national call center. One reason it chose Chesapeake was because "it's just not hard to live here," says Jesse Williams, director of the company's 250-employee office.

This Hampton Roads city has the affordable housing, shopping and other amenities to be attractive to many. But that was Chesapeake's problem through the 1990s -- it was attracting too many people. Its population soared from 151,000 in 1990 to about 196,000 today, putting the squeeze on city finances.

In the past two years, though, Chesapeake has posted record commercial growth. A dozen new businesses came to Chesapeake last year, bringing nearly 3,000 jobs and more than $128 million in capital investment. Existing business expansion added another 1,700 jobs. Three of the city's catches last year were very large: MCI WorldCom opened a call center that will employ 1,100 people. Towers Perrin, a consulting firm handling worker benefits, spent $36 million on a benefits administration center that is expected to house 1,000 employees. And First Data Resources opened a credit card manufacturing and distribution center with 500 workers.

But this new development isn't happening in a downtown because Chesapeake doesn't have one, says Warren D. Harris, assistant director of economic development. "When we get asked the question, 'Where's downtown Chesapeake?' we say Norfolk," he says. (For the latest on downtown Norfolk's redevelopment see the May 1999 issue).

Chesapeake was formed in 1963 from the merger of Norfolk County and the city of South Norfolk. It's geographically huge -- 353 square miles -- but most of its developed areas are in the northern half along branches of the Elizabeth River. Much of the southern half of the county is wetlands; the Great Dismal Swamp takes up most of the southwest corner of the city, for example.

Harris says Chesapeake is a city of suburban-like economic clusters -- and the fastest-growing one in the city today is Greenbrier, an area of retail and residential development adjacent to Interstate 64 on the city's east side. It was originally created in the early 1970s as a 3,000-acre planned unit development, and it became the region's second largest retailing center. The new First Data and MCI WorldCom buildings are both in corporate office parks in Greenbrier, and the city's economic development office is there, too. A 76,000-square-foot speculative office building is under construction now, Harris says. "The development community has obviously identified Greenbrier as a safe investment."

Along the city's waterfront, some old industrial sites are being reused. A yacht manufacturer is building a $6 million facility on the site of the former Norfolk Steel plant on the Elizabeth River, Harris says. Another yacht maker is making plans to build "megayachts" at an Elizabeth River site. The boats, over 150 feet long, will be priced around $22 million each, Harris says. And this spring, a company that ships wood chips opened a facility on land once used by Chevron. "There's been some fairly good activity along the waterfront," Harris says. "It's not one of those pretty, pristine places. It's not smokestacks and pollution, but it's just a working waterfront."

The city has been going after economic development to ease the tax burden on residents. City Council member Debbie Ritter says the city now has about 67 percent residential development and the rest commercial. "A really good balance is 60-40, and we're about the closest in the area."

One reason for Chesapeake's commercial boom is its newly completed transportation network, says Tara Saunders, the city's senior business development manager. Interstates 64 and 664 now form a beltway through the northern part of the city.

Proof that all roads now lead to Chesapeake is apparent in the global composition of the city's business community. Saunders says the city has 61 international companies representing 25 countries. Eleven are from Japan. The port is a major international draw, she says, but "I think what happens is one company is successful, and they tell suppliers [and] vendors that Ches-apeake is a place to be, and they tend to follow."

* * *

Cities -- downtowns in particular -- are back in style. So much so that developers in Fairfax County, the most prosperous locality in Virginia, decided to build one from scratch.

Unlike traditional downtowns, most of which can boast a long history, Reston Town Center is not quite 9 years old. It began with Mobil Land Development Corp., which wanted to create a downtown from the sprawling suburbs. Then Mobil sold the development to Equity Office, one of the largest owners of office buildings in the country.

Reston Town Center is smack in the middle of Northern Virginia's technology corridor. Gregory F. Hamm, managing director of CB Richard Ellis, a real estate services company with an office in Tysons Corner, notes that Northern Virginia's economy is expected to grow by 40,000 jobs a year. "It's being spread throughout Northern Virginia, but disproportionately throughout the Dulles corridor." Several factors contribute to the growth. "There are now more flights per day out of Dulles than out of Reagan National. Five years ago, people would have thought that impossible," he says.

As a result of explosive growth, however, farm fields across Northern Virginia quickly became subdivisions. Hamm, who previously worked with Mobil Land Development, says, "Reston Town Center has provided a soul to Northern Virginia which it lacked before. The area grew so rapidly, it lacks the historical downtowns that developments traditionally grow around. What's particularly helpful for Reston is that it has architectural, aesthetic and entertainment qualities ... that are unique in America. There are 13 million square feet of office space in Reston, so Reston Town Center becomes the literal downtown of those workers and residents of the community. But because of the road network, the Town Center's draw extends beyond Reston," he says.

New construction is continuing and there's plenty of room for growth, says Randa R. Mendenhall, Equity Office's marketing director. There's an 18-story skyscraper going up next to Reston Town Center and an assisted-living facility across the road. "Beyond that, it's open field," she says. More houses are being built and pedestrian tunnels are being put in underneath Reston Parkway so it will be one of the most pedestrian-friendly "downtowns" around.

Across the commonwealth, downtowns are reclaiming their role as economic magnets. Cities are rediscovering that if they build it, rehab it and make it a nice place to live and work, people will come.

© JUNE 1999, Media General Business Publications Inc.,
publisher of Virginia Business Magazine