GRUNDY, Va. — If the sign on the building didn't say Wal-Mart, you might mistake it for Bloomingdale's.
The glass atrium, escalators from a multilevel parking deck and surrounding pedestrian mall seem strangely out of character for the world's largest retailer, as is the location in a new downtown anchored by the big-box giant.
Yes, that's right: There is a town in Virginia that bulldozed the remains of its decades-old downtown shopping district and put up a Wal-Mart — and it has proved to be a big hit in bringing people back to the town's long-struggling core. It even has sparked an unlikely holiday buying rush this year.
"We really had not had a Black Friday in Grundy," said Tim Potter, property manager and project coordinator for the Grundy Industrial Development Authority. "Back before the town was torn down and all you could literally on Black Friday stand in the middle of the road and you wouldn't see anybody, nobody shopping, nothing. That's not the case now."
What has happening in Grundy is being watched closely elsewhere. Cities and small towns across the country are fighting over various models for downtown redevelopment while trying to resist the allure of classic big-box stores that are seen as too impersonal or too suburban.
But officials in Grundy, a town of about 1,000 people in the remote mountains of far Southwest Virginia, say they never saw a conflict between downtown and the big box. Its bustling regional hub of decades past was destroyed in 1977 by a flood so devastating that when the business district was bulldozed decades later, some of the buildings still had alluvial mud inside them.
People didn't know it then in this coal-mining town nestled along the Levisa Fork River, but the flood cleared the way for a monumental experiment involving multiple levels of government, with possible lessons far beyond Grundy.
Back to life
The new Grundy, which has cost more than $220 million, had its genesis in the 1990s as agencies sought to address two federally mandated projects: flood-proofing in response to the 1977 disaster and construction of a highway as part of a regional road system to open the area to development.
Meanwhile, town leaders had begun to think about how to address a long-standing problem: an empty, flood-prone downtown that had shown no sign of coming back to life in the decades since the disaster.
In a long and complicated process helped along by Rep. Rick Boucher, a Democrat who represented the area for 28 years before losing his seat in 2010, the federal, state and local projects were brought together under one umbrella.
The result was a collaborative project that combined highway construction with a new flood wall. Buildings were razed, a levee system was constructed and a 13-acre site was blasted from the side of a mountain to make room for a new downtown.
The Grundy Industrial Development Authority worked out a financing package for the redevelopment project, based largely on the use of so-called new market tax credits.
"Grundy Town Center and the surrounding road and river improvement infrastructure provided a model for how cooperation of state and federal government can lay the foundation for private enterprise," shopping center developer Mark Podlin said.
Mr. Potter said the unprecedented partnership of federal, state, local, business and nonprofit forces helped cut the project cost in half.
Ken Woodard, Grundy's flood-proofing project manager for the Army Corps of Engineers, said this kind of partnership is now used more readily by agencies like his, with the potential to save millions — even billions — of taxpayer dollars.
"We've seen that it can be done, that the corps can work with other agencies and work out agreements with them that result in cost savings," Mr. Woodard said. "I think Grundy's a huge springboard for that."
In just over a year since Wal-Mart opened, a set of storefronts and two mixed-use retail and office buildings have gone up to house the kinds of shops never before seen in this part of the world: national chain retailers. Among the tenants are Cato, Rue21, Shoe Sensation, Factory Connection, GameStop and Hibbett Sports. Restaurants and a hotel also are planned.
No, it doesn't compare to Tysons Corner in suburban Washington, but for a town that was buried in the mud of 1977, it marked the beginning of an era. For a generation, people had to drive out of town to shop -- often an hour or more on the curvy mountain roads.
"Back before the flood, you would come to town and that's where everybody met," said Sharlene Stiltner a lifelong Grundy resident. "After the flood if you wanted to go shopping you usually ended up [more than 30 miles away] in Claypool Hill."
Ms. Stiltner said Wal-Mart has brought that sense of downtown community back to Grundy — and the impact is huge when people come from larger towns such as Pikeville and Richlands to shop in Grundy.
"The flood, it devastated the town. It was sort of like our town was dying," she said. "This makes us feel like we've come a long way."
While controversy elsewhere sets urban renewal and Wal-Mart at odds, marrying the two has worked well in Grundy, Mr. Podlin said. For one, the new stores — which opened just in time to usher in the holiday shopping season — have been astounded to see record-setting sales.
Wal-Mart store manager Melissa Fowler said the openings of the smaller shops also have boosted sales at Wal-Mart.
"It's helping one another," she said. "In the end, all of us win."
Mr. Podlin said the evolution of the Grundy project — over time with many partners — is influencing the approach to retail development as far away as Asia.
"We're taking some of these same principles and thinking about how to apply them in Seoul, Korea," he said. "Grundy has been kind of a very interesting laboratory for us to develop concepts and understand step-by-step what the elements are that make a creative project."
Mr. Potter said the project has brought more than 300 jobs to Grundy. That number is expected to grow as the "first step" helps fuel the town's broader economic development effort, which includes professional schools and ties with a regional effort.
"I think people are just so happy to have jobs in the area," said Linda Childress, store manager at Shoe Sensation. "I was driving an hour and a half to work every day in Bluefield, W.Va."