Grundy makes dramatic entrance into 21st century

Raising Grundy

• For the latest on the project and an archived history of the construction, visit www.raisinggrundy.com

For decades it was deemed far-fetched, an impossibility, pie-in-the-sky. But all of a sudden, it’s real.

A one-time coal boomtown washed away by flooding and long forgotten by progress, Grundy is making a dramatic entrance into the 21^st century.

The project to rebuild Grundy – a remote Southwest Virginia town of just more than 1,000 people that serves as the Buchanan County seat – has come with an estimated price tag in the neighborhood of $300 million, said Tim Potter, director of the Grundy Industrial Development Authority.

The money came from a combination of federal, state and local sources for flood control, road construction and building a new downtown.

Mark Podlin, a shopping center developer and investment advisor involved with the project, said Grundy is poised to set a new standard for downtown redevelopment, not just for this relatively poor region of Central Appalachia but for the entire nation.

Signs of progress

At the rate things are going, all of the space in Grundy’s new downtown will be leased by the time the buildings are finished, said Podlin, the same developer who oversaw the expansion of the Bristol Mall in the mid-1990s.

The main anchor store in Grundy’s project, a Walmart perched atop a two-story parking deck built for $21.8 million by the Grundy IDA, is nearing completion.

Potter said the big-box store space is scheduled to be turned over to Walmart on Aug. 1. The retailer is locked into a 25-year lease on the space, which is 109,000 square feet. Beneath it are more than 500 parking spaces on two levels.

The project superintendent is Butch Morris with the construction firm Stewart Perry, the same man who oversaw construction of the Highlands shopping center adjoining Target at Bristol’s Exit 7.

Citing company policy, Morris said he couldn’t talk about details of either project. He did say both he and Stewart Perry are proud to be working in Grundy.

With several other retail buildings around the Walmart, Podlin said, the retail complex will have the feel of an outdoor pedestrian mall, with a water fountain in summer and a big gas fireplace in winter.

“So many developers start out intending to build office and retail and entertainment and restaurants and they never succeeded, but this is succeeding,” he said. “It’s really going to be like a real downtown.”

Under construction at ground level on the front side of the parking deck is a retail strip that will house several stores. An anchor for that strip is Factory Connection, a chain that sells department store clothing at a discount.

“We also have a sporting goods store, a shoe store, a jewelry store and a game store, and those will be lined up right in front of the Walmart,” he said.

Two more buildings will contain retail space on the first floor with offices on the second floor. One will house the Grundy Police Department, while the other will house the offices of a local company.

Among the additional retail tenants being sought: clothing stores, an electronics store, a cell phone store, a hairstylist, a tax preparation service, a dentist, a dollar store and a coffee and sandwich shop.

“We want tenants that have the corporate staying power to be there for at least 10 years,” Podlin said.

He said the last businesses to be developed will be four free-standing restaurants, two fast-food chains, including one to be located near the movie theatre, and two sit-down restaurants, a steakhouse and a full-menu restaurant that will include outdoor seating overlooking the river.

Hidden economy

In studying the area’s potential for a big retail project, Podlin said he saw something in Grundy similar to what exists in low-income Los Angeles: “There is a hidden economy that exists that’s not reported and isn’t measured and probably isn’t measurable.”

For starters, he said, Grundy’s disproportionately large disabled population equates to a large amount of disability income that is not taxed and therefore not counted anywhere. Nevertheless, it exists and is available for spending.

At the same time, there’s a lot of business that’s done strictly in cash, which also flies under the radar.

“There’s probably double the income in the Grundy area than what is officially recorded,” Podlin said. “So … people have double the money you think they have, and they have nowhere to spend it.”

He said the influx of national retailers to this tiny town is based in part on market research that he said revealed an unmet demand within a 20-mile radius of downtown Grundy for $30.6 million in clothing and accessory sales and $69.6 million in food and drink sales.

Those numbers, he said, don’t include the business that’s expected to be done by Walmart in the town, which sits near the meeting point of Virginia, West Virginia and Kentucky.

“Even if you build all the stores that we have room to build in the Grundy Town Center, there’s still a surplus of business to be done in Grundy. What that tells people is that there’s a big profit to be made,” Podlin said. “They can do an unusual amount of business that they can’t do in other markets because in other markets there’s so much more competition.”

He said the effort has been to attract a good mix of national retail chains because that’s what will lure people to town to shop. He said the town also asked that the complex be used primarily to draw new businesses – rather than relocating old ones – to help build Grundy’s economic base.

“We’ve really tried to be town builders rather than town re-arrangers,” he said.

Podlin said both the Walmart and attached ground-level retail shops are expected to open by September. Walmart did not respond to a request for information about the project and the store’s planned opening date.

If everything goes according to plan, Podlin said, all of the retail buildings will be completed by the end of the year and all of the businesses will be in operation by next spring.

Potter said the town will likely spend another $5 million to $6 million on downtown construction before it’s over, in addition to what it’s spending on the Walmart building.

These days, Potter said, the attitude of the townspeople has made “a total turnaround” from pessimism to excitement as they wait for the new stores to open.

“If you looked at it several years ago, you would’ve said, ‘There’s no way that could ever happen.’ Well, it is happening,” Podlin said. “I think this is probably going to be one of the coolest towns in the whole country.”

Inspiring improvement

Potter said the town also has plans to fix up the old movie theater to match the new Walmart, and downtown property owners have started sprucing up their buildings.

“I guess the new building has kicked off more beautification of the town,” Potter said, explaining that people are taking more pride in Grundy now. “It’s really going to be the start of the revitalization of the town.”

The newly renovated TruPoint Bank building, the bank’s Grundy branch and its original office, sparkles in the sunlight from its prominent place beside the courthouse.

Repaired after it took water up to the light switches during the ‘77 flood, the building has been slated for renovation for a few years, said Barry Elswick, TruPoint’s president and chief executive officer.

But bank officials didn’t want to interfere with the town’s work nearby, so they waited. Now the restoration, modeled after a 1920s-era depiction of the bank, appears to be right on schedule as the new buildings go up across the river.

“I’ve heard some others are contemplating some upgrades,” Elswick said of the handful of downtown businesses that remain in the area around the courthouse. “I hope so.”

One building roped off as a construction zone is the old Food City store, the original home of another regional company that was born and raised in Grundy.

Potter and Podlin said it’s being converted into a new Super Dollar store, a discount grocery chain owned by Food City, which already has a new store in nearby Vansant.

Potter said the retail development could bring in as much as $300,000 a year or more in new revenue, a significant sum in a town with an annual budget of $1.6 million.

But he said the project is about more than just dollars; it’s about creating the quality of life that can bring the people back to a town and county that’s seen a mass exodus in the past few decades.

“I’ve lived in several places, anywhere from California to Norfolk to Florida and wherever,” Potter said. “The culture of this area and its people are very different, where you know your neighbor, and just that itself is worth saving.”

Instead of going away to college and staying gone, he said, the next generation might be able to find opportunities at home.

Carroll Branham, chairman of the Buchanan County Board of Supervisors, said the Grundy project also fits into a larger economic development effort for the county, which is hoping to cash in on revenue generated by business developed there and along the U.S. 460 Connector being built to connect the region with Kentucky.

The county’s mostly empty Southern Gap development site waits on a flattened mountaintop ready for the boom that’s anticipated when road construction is complete. Meanwhile, Branham said, the county is awaiting federal permits to build local roads to the site.

The county also is diversifying its traditionally coal-based economy with the development of professional schools. With a law school and pharmacy school already operating, the county is set to open an optometry school, Branham said, with the potential to open a fourth school of some kind down the road.

“I think our building boom is just now beginning to start. … I think we’ll be having a lot more as time goes on,” Branham said. “We’re looking forward to a lot of progress in the county in the next few years.”

Signs of hope

Sandy Stiltner has watched it all from the window of the courthouse where she works as an executive secretary, looking out over the Levisa River and the redevelopment site.

The process has unfolded for more than a decade: First the demolition of the old town buildings, followed by the highway and floodwall construction, the creation of the 13-acre redevelopment site blasted from the side of a mountain and, finally, the construction of new stores.

“It was kind of sad at the beginning, to see things where you were born and raised, stores you went into, the movie theater and the skating rink, to see it gone,” Stiltner said. “So we were thrilled to see something developed. It’s something we’ve long waited for, and it’s long overdue.”

She still remembers the once-crowded streets of Grundy, with the rows of old commercial buildings that have since given way to a four-lane highway with four traffic lights in a town where there once was just one.

Like many in Grundy, she still has a mixed set of feelings: sadness for what’s been lost and excitement for what is to come.

“Grundy was gone [in the years following the flood],” said Lynda Stewart Mayhorn, another lifelong resident. “The perfect Grundy that we had when we grew up was gone.”

Potter said some of the old store buildings had ‘77 flood mud in them until the day they were torn down for the flood-proofing and redevelopment project. It was a monument to the decay that had taken place since the pre-flood days when some 70 businesses operated in town.

As recently as two years ago, most of the population that lives and works in this remote mountain town was convinced: Walmart would never come. Not to Grundy.

Even as the old buildings were torn down, the highways and levees were built up and the mountain was moved, they didn’t want to be too quick to believe, and risk disappointment if the long-awaited project were never finished.

One man eating lunch at the Italian Village, downtown Grundy’s lone restaurant, said Wednesday that he remains skeptical: “I’ll believe it when the doors open,” he said, and declined to give his name.

But Louise Miller, the restaurant manager, said the attitude began to change when the big building started to go up. As it nears completion, the parking deck with the big box on top is generating a lot of excitement.

“Before, everybody was just like, ‘Oh, well, I’ll believe it when I see it,’” she said. “I was kind of tickled when it started going up. I just can’t believe how fast they got it up.”

Miller said people are excited that they’ll be able to shop locally now, instead of making a trip 45 minutes or better to Claypool Hill in Tazewell County or Pikeville, Ky. Mostly, she said, they’re excited about the 300 or more jobs the retail complex is expected to bring.

She thinks the influx of traffic will help her business, even though there’ll be competition when more restaurants open.

Local radio DJ Bink Rush said he’s never doubted the project would happen – it was just a matter of when.

“I think everybody’s going to have to wait and see when the place opens up and see how it does,” he said. “I think with this much effort we’d be crazy not to give it a chance.”

Ultimately, Rush said, he thinks people in Grundy will embrace its new identity – without letting go of the old pictures that commemorate what the town used to be.

“Grundy’s not just the buildings,” said Roger Mayhorn, Lynda’s husband, “and the people are the same.”

What it took

Congress first authorized the flood-proofing of Grundy not long after the 1977 flood that ravaged the town, said former U.S. Rep. Rick Boucher, who was elected to Congress in 1982 and oversaw much of the effort that got the project going.

Even though Congress authorized the project before he took office, Boucher said, the action was just a statement that the project has merit; no funding came with it.

Boucher said Grundy’s downtown buildings were undermined by the big flood of 1977, the worst in recent memory in a town with a history of being inundated every decade or so. With no flood insurance available, property owners in the devastated downtown would not invest in their buildings for fear of another flood.

“Literally the town was doomed,” said Boucher, who represented Southwest Virginia in Congress until 2010, the year that ground was broken on the new downtown construction.

At that time it was still unclear what a flood-proofing project would look like. There was talk of re-routing the Levisa River around the town, Potter said, or moving the historic downtown to higher ground.

A lot of concepts were dreamed up, but for a long time nothing was done to try to translate the seemingly grandiose plans into action.

“Early on after the ‘77 flood they talked about flood-proofing and so forth, and really for a long time it just kind of sat on the back burner and nothing was ever done with it,” Potter said. “We had some early concepts, but nothing that anybody could’ve thought of happening.”

From the town’s perspective, he said, the project really began when the town council voted in the 1990s to commit to moving it forward. And from there the flood-proofing project evolved into a downtown revitalization plan.

“The project itself has changed from when the town first decided to do the flood-proofing and do the downtown to what it is today,” Potter said. “It’s been a lot of years and a lot of people working on this project to get it where it is.”

Boucher credits his then-Chief of Staff Becky Coleman with the effort that brought together three levels of government for a partnership that would make the project viable, and with helping to coordinate the funding.

The deal that finally got the project underway in the late 1990s was a plan that combined two projects into one: the U.S. Army Corps of Engineers’ mandate to flood-proof the town and the Virginia Department of Transportation’s plan to build a four-lane highway.

Even so, Boucher said, the federal money invested in the project constitutes the largest federally funded project in the history of Southwest Virginia, excluding the federal highway system.

The road project and the flood project were combined as a single structure, with the new U.S. Route 460 built through Grundy atop the new floodwall, bringing down the price tag substantially. Boucher said he worked with President Bill Clinton to get the commitment to begin funding the construction.

Funding it, Boucher said, “was never easy,” as year after year he had to make appropriations committee requests for the money to continue construction, and his counterparts in the region’s state legislative delegation sought money from Richmond.

The final leg of the effort, building the new downtown shopping district, was delayed by the slow economy, Potter said. It was by using new market tax credits, obtained with the help of People Incorporated, that the Grundy IDA finally pulled the financing together.

Along the way there were never-ending obstacles, he said – never mind the obvious ones, like the mountain and the river.

“Every hurdle you hit or every obstacle you hit, just have the attitude that that’s not going to stop you, and keep pressing,” Potter said, offering advice to any other town that might attempt something this large. “You run into obstacles every day, and you can’t let it get you down; you have to keep going. You have to keep pressing.”

Boucher, long a proponent of infrastructure building to lay the groundwork for economic development, said Grundy is a great success story for the region – and a great example of what can happen when all three levels of government work together. He said the flood-proofing project has created a confidence that will lead to substantial growth and reverse the flight of dollars from Buchanan County, evidenced by private development already starting to take place around town.

“It’s going to be a more vital commercial center than it has ever been. … It will revitalize not just Grundy, but all of Buchanan County and become a center for the entire region,” Boucher said. “Over time there is no doubt that the return on the federal and state investment in the town of Grundy will be substantial and will be many multiples of what the initial investment was.”

Model for the future?

There’s one thing California, Chicago, New York and New Jersey have in common: In the future, they’re going to be sending people here to see Grundy. So says Podlin, who’s worked all over the country and sees something here that’s bigger than a tiny Appalachian town with a $300 million project. He said it will be the best money the government has ever spent.

It’s a glimpse into the future, he said, an example of what the next generation of development is going to look like. In a transformation he calls “miraculous,” a town that was doomed by adversity will become a role model for others.

“It’s very unusual to have Walmart right across the street from the courthouse. That’s not really the norm today, but it will be the norm 20 years from now,” Podlin said. “The new generation will come in and say, ‘Why don’t we just make this where we can walk everywhere, because we can’t afford $20-a-gallon gas.”

It’s the reversal of the suburban model that has persisted since the 1950s, when people began to move many miles away from downtown so they could live in a more private, park-like setting, Podlin said.

“Because of the cost of transportation and people’s feeling of alienation from being apart from each other, they’re going to want to move back downtown so they can be with each other again.”

But in the new model, he said, Walmart has replaced the traditional downtown department stores. The reason has a lot to do with people’s spending choices, he said, but also with the reality that the middle-class standard of living has eroded since the 1950s and ’60s.

Until the recent housing bubble burst, he said, people were able to create an illusion of better living through borrowing – but since then they’ve had to start living within their means again. And two incomes these days don’t buy what one income used to.

“They find that they really need to go to Walmart,” he said. “And when they want to buy something really cheap, they go to a dollar store.”

With a new focus on quality of life, he said, people are looking more toward the lifestyle in Europe and its small, walkable towns.

“I think what we’ll see evolving in the future is the town of Grundy is going to be a model that so many developers are going to try to imitate throughout the rest of the country in the coming years,” Podlin said.

For Grundy, he said, it’s a case of a place that has risen from the ashes, defying all expectations that might be placed on a small Appalachian town.

“If it hadn’t been for the flood … Grundy wouldn’t be in a position to develop itself into a modern downtown like it is right now,” he said.

“The flood ultimately will have done Grundy a lot of good because it will have cleared out all the old buildings in downtown Grundy that had to be removed or renovated in some way,” he said. “This new world that is being constructed in downtown Grundy will be a catalyst for a lot more growth.”

dmccown@bristolnews.com
(276) 791-0701