The developers of Peninsula Town Center won’t turn existing unused retail space into housing.

Peninsula Main LLC wanted to build nine residential units in existing retail space and 21 brand-new townhomes in two buildings at the intersection of Hartford Road and Cunningham Drive, next to the shopping complex’s parking garage.

On Wednesday night, Hampton council members and Mayor Donnie Tuck decided maintaining the retail core of the shopping center was a bigger priority than filling those empty spaces.

“My concern is really long term, the future of Peninsula Town Center,” Vice Mayor Jimmy Gray said. “That center is a major economic driver.”

Tuck echoed Gray.

“Rather than contribute to what we perceive to be as the degradation of that commercial center, I think the feelings among council is that we'd rather say no,” Tuck said.

Developers will still build 21 townhomes on Hartford and Cunningham.

In an October presentation, chief city planner Donald Whipple recommended approving the 21 townhomes, but not the nine units.

City staff said those nine units are inside the commercial core outlined in Peninsula Town Center's original plan and they will take up valuable commercial space. The converted storefronts would also be at street level with no separation from the other retail in the building, causing safety and privacy issues.

“There's also a serious concern that there is no overall plan for how much retail will continue to be converted into residential units,” Whipple said then.

Peninsula Town Center was approved in 2009 with 343 housing units and nearly 900,000 square feet of retail. Developers have to get City Council approval to change those numbers.

Peyton Millinor, who represents the owner of Peninsula Town Center, said the commercial core moved with the closure of Macy's in 2016. Macy's was the anchor of the northwest side of the shopping center, and Millinor said retail has suffered there ever since.

Millinor said the retail space they wanted to convert isn't bringing in any money.

"We're really looking at replacing 9,500 square feet of dead, dark retail that hasn't been leased in five years," he said.

“It would be a lot more cost-effective for us if we could lease it as retail, but we've had no takers.”

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