Greater Baton Rouge Business Report: Strip tease: West Baton Rouge is finally landing retail develop

When Donnie Jarreau built The Oaks, a small strip shopping center in downtown Brusly, it was just business as usual for him. But it was a big deal for Brusly.

That's because West Baton Rouge Parish--and Brusly in particular--has long been dogged by a classic chicken-or-egg problem of real estate development: it's hard to get retailers to lease in an area without a sufficient residential population (Brusly has about 2,200 people), but it's also difficult to sell residential lots in an area that lacks basic retail.

The Oaks, which opened in March, is the first significant retail development in West Baton Rouge in about 15 years, says Larry Dietz, a commercial broker with Sealy & Falgoust. There has been some gambling-driven development at Interstate 10 and La. 415, but nothing in Plaquemine, Addis, or Brusly besides a scattering of fast-food restaurants, gas stations and pharmacies. Not coincidentally, the Oaks is opening just as a number of new residential developments are breaking ground.

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"The new retail development signifies confidence in current and anticipated growth," Dietz says.

As Baton Rouge-area strip centers go, The Oaks is on the smallish side, at 28,000 square feet. Getting it built was tough, though, mainly because of West Baton Rouge's small population and untested market.

"It was not an easy project to finance," Jarreau says. "We had tried to work with a local bank but they were very skeptical, so we ended up working with Regions instead."

Despite the development's location and the trepidation of financial backers, Jarreau was able to pre-lease the entire thing. Jarreau says he has done 15 comparable retail projects in suburban Baton Rouge and beyond, and he decided that West Baton Rouge was ripe. "There was no new retail in West Baton Rouge," he says, "and I had talked to several retailers that wanted to get into that location."

The Oaks' tenants include three national chains--Blimpie, Family Dollar, and Planet Smoothie--as well as a spa, a gym and an ice-cream shop.

"It was an untouched market," says Jarreau," and there's just not much left to develop that is so close in to the city."

Several other projects are following The Oaks' lead, all of them along the same stretch of La. I near Brusly's town hall. Another 15,000-square-foot strip center is going up just east of Jarreau's development. An Associated Grocers store and a bank branch are in the works, and a DeAngelo's Italian restaurant opened in May.

Jarreau is also breaking ground on a 12,000-square-foot addition to The Oaks in early August. The addition will have a Showtime video store (a Canadian franchise) and another sit-down restaurant.

Dietz says The Oaks marks a change in West Baton Rouge, from retail that depends on traffic to retail that depends on "rooftops"--retail-industry-speak for homes. Grocery and discount stores, video rentals, gyms and sit-down restaurants (as opposed to fast food joints) all rely on people living nearby.

As of now, few people live nearby. "The rooftops are not there," admits Jarreau. "But they're coming."

"Brusly's population would not normally be considered sufficient for most of these businesses," agrees Dietz. "They're banking on the future and growth potential."

Until more residents move in, The Oaks and its retail neighbors will continue to rely on the 40,000-odd cars a day that travel the La. 1 corridor, a figure comparable to many of the busiest corridors in East Baton Rouge.

Danny McLaughlin, the general manager of DeAngelo's Brusly location, says that while the restaurant is hoping for new growth, he believes West Baton Rouge was an underserved market to begin with. Brusly is midway between Port Allen and Plaquemine, giving it easy access to about 10,000 residents.

"We're not a Brusly restaurant per se," McLaughlin says. "You also get Plaquemine, Addis and Port Allen. All the people here were already crossing the bridge to eat at DeAngelo's in Baton Rouge. Now they don't have to."

The Oaks is not the only development betting that Brusly's time has come. Research by Ed Kramer of Palm Hills Development shows West Baton Rouge Parish is averaging only about 55 building permits for new houses each year, two-thirds of them in Brusly. But nearly 800 lots are either ready to build or are being developed, including 484 in the Sugar Mill Plantation subdivision alone.

That big increase in supply is predicated on the convergence of several factors. Mounting consumer anxiety over rising interest rates is dampening demand at the high end and strengthening it between $150,000 and $250,000--a price range that is scarce in East Baton Rouge.

Livingston and Ascension have been absorbing that mid-market demand for some time now, but Brusly beats them on location. Commuting from Watson into Baton Rouge can take 45 minutes to an hour each way. From Brusly, downtown is 10 minutes away. And for employees at Dow and the other plants, Brusly is the closest option.

"People are realizing that West Baton Rouge is just across the river," says Dietz. "It's a parish that is being rediscovered, and developers and residents who are getting in now are seeing much lower costs."

$12.50-$13.50

lease price per square foot at The Oaks in Brusly

$14.50-$20

price for comparable space in Baton Rouge

HAL COHEN covers real estate and legal issues. Reach him at hcohen@businessreport.com.