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Delray Beach lures national stores, embarks on westward expansion

Downtown Delray Beach, a rising star on the national tourism front, is attracting interest from national retailers who want a location on its sizzling streets. Urban Outfitters, the hip clothing and accessories chain, recently inked a deal to lease space on Atlantic Avenue. And word is BCBG, the stylish, international women’s clothing store, soon will occupy space downtown, too.

The influx of national retailers comes at a time when Delray’s downtown has matured to include a wide range of cuisine, new hotels, plus new apartments and the planned mixed-use Atlantic Crossing by the Intracoastal Waterway. Action is so hot in the east end of downtown that developers are looking west to build new apartments, shops, offices and a hotel.

In March, The New York Post published a favorable feature on Delray, dubbing it “South Florida’s Emerging ‘It’ Town.”

But the area is no secret to developers and landowners who have been gobbling up land and buildings for development and investment.

“People have discovered Delray. It’s always been a jewel in south Palm Beach County. As more people have discovered it, the numbers are there to attract national tenants,” said Diane Colonna, executive director of the Delray Beach Community Redevelopment Agency.

Take Urban Outfitters, dubbed by Palm Beach County investor Jonathan Gladstone a “bellweather” for national retailers: “They’re the first ones in.”

The hip fashion retailer will move into a 10,954-square-foot, two-story store at 306 Atlantic Avenue in Delray Beach. Plans are to open by year-end. The store marks the company’s second Palm Beach County location; the other is at Downtown at the Gardens in Palm Beach Gardens.

The company signed a 10-year lease with landlord EASSA Properties LLP and plans to open by Nov. 1.

Urban Outfitters found Delray Beach when the president of the company stayed at the Seagate Hotel downtown to attend a wedding and was impressed by the burgeoning pedestrian street and old architecture of the buildings, according to Roxanne Register, CBRE’s vice president of retail. Register represented EASSA.

Register said Urban Outfitters “likes to come in and be one of the first national retailers on the street. They have the vision so many retailers of that size don’t have.”

Urban Outfitters is not the only national retailer moving in. BCBG reportedly is taking space at at 407 East Atlantic Ave., former home to Nutrition Cottage Health Foods. (A spokeswoman did not return an email requesting comment.)

Nearby, Fresh Produce, a national retailer featuring colorful resort-wear clothes, is set to open at 401 East Atlantic Ave., according to the company website. The property is the site of the former Mercer Wenzel, the venerable family-owned department store that closed in 2012.

Register confirmed that other national retailers are closely eyeing Delray Beach, too, and she’s looking for space for them. Register noted that national retailers drive sales, benefiting all retailers, including local ones.

The influx of major national tenants is praised by business leaders, but it comes at a cost to longtime homegrown retailers. Increasingly, they are being pushed out by rising rents.

Among them: Nutrition Cottage, which shuttered its Delray store earlier this year and consolidated all operations at an existing location in Boynton Beach, at 1815 South Federal Highway.

The Nutrition Cottage, the oldest family-owned natural food store in South Florida, had been in various locations in downtown Delray Beach for 38 years. But co-owner Mark Stowe said rising rents made staying downtown “untenable.”

Stowe is no enemy of progress. A former president of Delray’s Chamber of Commerce, he is in favor of efforts to boost business downtown. Still, he doesn’t want downtown Delray to lose its small businesses, “which add to the flavor of what made Delray,” he said.

Stowe said he might return to Delray in the future with another store, but now he’s focused on Boynton Beach.

This past Thursday, Friday and Saturday, The Nutrition Cottage held a grand re-opening in Boynton, celebrating the fact that so many of his customers have loyally followed him to his new location. (One bonus: The Boynton store has easy parking. Hours have been expanded, too.) The grand re-opening features free samples, a tasting fair prizes and drawings for gift baskets, nutritional consultation and organic wine.

Colonna, for one, thinks there’s still plenty of room for national and local retailers to co-exist. “From I-95 to the beach, there’s 500 acres of commercially zoned land in the downtown,” she said.

Colonna also noted that the city has been upgrading side streets off of Atlantic Avenue to accommodate the “moms and pops.”

Some may soon find new digs to the west of Swinton Avenue, along west Atlantic Avenue. There, the Flynn family, known in West Palm Beach for their just-closed J. Flynn’s eatery on Clematis Street, is making a major investment in Delray Beach.

Through their Equity Enterprises USA company, the family has purchased more than 6.27 acres worth of property from the CRA with plans for a large, mixed-use development. The property, between southwest 6th and 9th avenues on Atlantic Avenue, will feature 47,600 square feet of office space, 49,795 square feet of retail and 129 rental apartments.

“Development has to go west, and it’s a fantastic corridor and a terrific location,” said John Flynn Jr.

The Flynn family is known for its development in the United Kingdom.

The Flynns are committed to working with the community and have pledged to hire local residents for construction and permanent jobs, said architect Choli Aronson, of the Delray Beach architecture firm, Currie Sowards Aguila Architects.

Plans are to bring in a grocery store and a bank branch within the grocery store, both top community wishes, Aronson said. The Flynn’s also plan to make space for public meetings.

Register, of CBRE, is handling retail leasing on the Flynn project. She said she already has strong interest from restaurants and retailers “who would like to be east of Swinton but can’t afford it or don’t have to be.” The Flynn property will offer them new options, she said.

The Flynn property sits directly east of the new Fairfield Inn, a 95-room hotel now under construction on Atlantic Avenue. Plans are to open by the fall.

The hotel, together with the Flynn project, are the link from the interstate to the city’s downtown, real estate brokers say.

“What this does is start to close the gap between Swinton Avenue and I-95,” said Jim Knight, of The Knight Group real estate brokerage in Delray Beach.

Alexandra Clough writes about the economy, real estate and the law.

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