River City Marketplace and Jacksonville Town Center hurting Callahan and Hilliard local businesses

Between the recession and a Jacksonville metropolitan area that creeps ever northward, times have been tough for businesses in Callahan, the Nassau County town about 12 miles north of Jacksonville.

Encroaching urban development over the last 10 years wasn’t bad for business – it brought a mini-boom of new houses in and near the community of just over 1,000. But when the housing bubble burst, construction activity and jobs vanished.

Meanwhile, the retail growth that the boom brought – most notably the addition of the River City Marketplace on Jacksonville’s Northside – gave residents more reasons to leave Callahan to eat and shop.

“Anytime big businesses come in near town, it hurts our small business owners,” said Patsy Quaile, ambassador for the Greater Nassau County Chamber of Commerce, which represents the western half of Nassau County.

The competition is a big problem for the town, which has a hardware store, a grocery store, one drug store and another being built, a few dollar stores and a clustering of fast-food restaurants near its core, but little else in the way of recognizable chain stores. The bulk of the rest are small businesses, and the most successful restaurants are eateries that residents habitually frequent.

The economic downturn accelerated the rate at which local small businesses have died off, said Callahan Mayor Shirley Graham.

In the past year, 13 businesses have left town or closed, she said. Gone are two garden centers, a bakery, two submarine sandwich shops, a seafood deli, a movie rental store, a nail salon, a hair salon, a credit union and an Italian restaurant.

A western-wear clothing shop – Callie Kays General Store and Outfitters from Hilliard – recently closed when the owners decided Callahan couldn’t support it.

“The recession has finally hit us,” Graham said. “Since 1985, when I moved to Callahan, I have never seen it this bad.”

Aside from a Walgreens under construction across the town’s main intersection from an existing CVS pharmacy, the most visible new construction has been strip mall buildings. Callahan resident Andy Burns is one member of a partnership that owns two of them. He said business is good: occupancy is nearly at 100 percent in both.

But much of that is due to in-town relocations, not new growth. A barbecue restaurant, a doctor’s office, a restaurant specializing in chicken wings and the town library all have moved from older locations to newer digs in the strip malls.

Burns noted that the proximity of River City Marketplace is especially vexing to local restaurants whose menus tend toward the pricey side – that mall’s chain restaurants such as Olive Garden, Red Lobster and Sticky Fingers probably contributed to the closing of Ricco’s Italian restaurant.

“If people have the money to spend on a nice dinner, they are going to drive into Jacksonville,” he said.

Additionally, membership in the Greater Nassau County Chamber of Commerce has turned down recently, Quaile said.

“People are barely making it,” she said. “They can’t afford to pay the membership fee.”

But there are bright spots that indicate to Quaile that Callahan will see a resurgence when the recession lifts. Traffic on U.S. 1 and Florida A1A/U.S. 301 appears to be increasing steadily, bringing more travelers through town and more opportunity for local businesses, she said.

And although the town is losing businesses, new ones continue to arrive despite the economic climate – and several seem to be doing well, she said.

“We’re going to make it,” she said. “They [local businesses] are struggling – everybody is- but they’re still open.”

josh.gore@jacksonville.com, (904) 359-4699

kevin.turner@jacksonville.com, (904) 359-4609

http://jacksonville.com/business/2010-08-14/story/squeezed-callahan-recession-and-northside-shopping-center-hit-rural