Live-work properties may not be a great fit for the Grand Strand, and one developer is changing future building plans for more units in response to slow sales.
Myrtle Beach has two completed live-work townhome properties - at The Market Common and St. James Square off Robert Grissom Parkway - but vacancies in both have led the builder, Dock Street Communities, to change future plans.
Dock Street has asked the city of Myrtle Beach to approve changes to the master plan of The Market Common to allow it to build residential townhomes rather than live-work townhomes in future phases. The company has built 47 live-work townhomes out of the 80 originally planned.
A live-work townhome is a dual-use retail and residential space with a townhouse above a street-level store.
"You're asking someone to overcome two fears - to purchase a house and start a new business in one transaction, and that is not easy in today's economy," said David Wilkes, the executive vice president of Dock Street. "We just think it's more marketable for those to be residential than the live-works."
The company also asked for some changes in the plan to allow the retail space in the existing townhomes to be used by the residents as additional living space as a way to fill vacancies, he said.
About 40 percent of the stores on the first floor of the townhomes in both developments are not being used, Wilkes said.
The planning commission has approved the changes, and the Myrtle Beach City Council will review the proposal for the first time at its meeting on Dec. 14.
Wilkes said there are four live-work townhomes at The Market Common and six at St. James Square that are still available and that despite dropping prices the company hasn't sold one in close to a year. The properties at St. James Square cost about $250,000 and the townhomes at The Market Common cost just less than $300,000, though Wilkes said those prices are negotiable.
"We just had to adapt and meet the market as it says what it wants," he said, adding that the appetite for the live-work property appears to have dropped.
Eric Putthoff, the owner of Myrtle Beach Segway, rents the business space in a live-work townhome at The Market Common but does not live upstairs. He said the economic downturn has been tough on small businesses.
"We're lucky we made it through the recession," he said. "Others didn't. Some have come and gone."
But Putthoff said he doesn't blame the developers and he's happy to be there, though he would lobby for a few changes.
"Any new project whether it be something like this [or not] it takes time for something to develop," Putthoff said.
He would like to see more parking and attractions to bring more potential customers to the area. Additional help advertising or inclusion in efforts by The Market Common would also be a big help, Putthoff said.
Randall Ulrikson, who owns The Common Spot, a coffee and snacks shop at The Market Common, said advertising is one of the main challenges.
The farther away the shops are from the center of The Market Common, the harder it is to get business, he said.
Ulrikson doesn't live upstairs from his business, like many of the business owners, but he said it's a great place to do business. If he owned the townhome, he would be more invested in the live-work property type, Ulrikson said.
The most important thing for the business owners is to get more residents to the area, he said.
Tom Maeser, a real estate analyst for the Coastal Carolina Association of Realtors, said that the live-work townhomes should succeed, but the business from residents in the area is not as strong as was planned because the economic downturn slowed development of new neighborhoods nearby.
"The housing infrastructure did not develop at the rate that it needed to for the shopping," he said. "When they get those communities built up, it will be fine."
Live-work properties typically work best as part of a town center that is mixed-use, compact and walkable, said Thomas Dolan, an architect and the founder of the Live/Work Institute, a nonprofit organization based in Oakland, Calif.
"[The thing about] live-work is that it's very flexible and when an economy hiccups, it's important to be able to be adaptable, to be able to change, to repurpose one's building or use of a building as is necessary," he said.
Dock Street's move to allow empty retail space to be used by residents is a good change, Dolan said.
"The more flexible they are, the more likely they are to succeed," he said.
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