TAMPA - Downtown condos are opening their doors, people are trickling in, but the retail shops and restaurants that were promised to follow haven't arrived.

When the condominium tower Grand Central at Kennedy opens next month, its 100,000 square feet of ground-level retail space will be empty. It's not for lack of trying. Developer Ken Stoltenberg hoped Starbucks, Publix and high-end restaurants would flock to his downtown project.

After two unsuccessful years of trying to find retailers to lease the space, Stoltenberg's company, Mercury Advisors, has decided to sell them instead, as retail condos.

"At this point, retailers want to see the people move in before they commit," he said. "We're hoping that by owning, retailers will see this as an investment and that will turn around the thinking that the market is premature."

A handful of condominium towers are expected to open this year in downtown and the Channel District, and they're all competing for retail to provide services for residents and liven up the city. Some developers have tried leasing the space, and others are selling outright to business owners. Some try to sell their whole block of retail space to a management company and let it handle the leasing responsibility.

Until more people move in, however, persuading retailers to open up stores is a tough sell unless projects are in already developed parts of downtown.

Parkside's Troubles

Developers need only look to the 18-story Parkside of One Bayshore to see how tough it can be. The tower at Bayshore Boulevard and Platt Street opened nearly two years ago, and none of its 11,500 square feet of retail space has been leased. Developers say it's unclear how many people live there full-time.

The developer, Crescent Resources of Charlotte, N.C., has tried selling and leasing what it thought would be prime commercial real estate across from a popular Publix grocery store.

The first buyer couldn't close on the property and the second couldn't secure the right mix of renters, said Julie Weston, the developer's senior development coordinator. Crescent tried to find renters itself, Weston said, and businesses including coffee shops and dry cleaners have considered the space.

Some of those potential renters balked, however, because there wasn't yet a critical mass of people living downtown, Weston said.

In a few years, that may change dramatically.

There are 600 people living in downtown Tampa right now, according to the Tampa Downtown Partnership, which projects a doubling of residents by the end of this year. The group doesn't make long-term projections, but commercial real estate firm Cushman & Wakefield forecasts 5,000 residents by the end of 2008 and 7,500 by the end of 2010.

There's a lot of retail space to fill. Right now, there's 305,000 square feet of retail space in downtown, including the Channelside entertainment complex, which takes up most of that space, according to Cushman & Wakefield. By the end of 2010, the firm projects that number to double, primarily because developers plan more than three dozen condo projects in the area.

Patrick Berman, senior director at the firm, said condo developers will continue to have problems until more people move into downtown.

"Downtown is not a proven retail market," he said.

One problem is investors, Berman said.

Retailers are unsure how many investors purchased condo units and whether those units will have full-time residents who could become customers.

"It's difficult to lease space now for a condo that's not built yet," he said. "And when you have a condo that's only half occupied, its retailers aren't that interested."

Crescent's search for retailers may soon be over. Weston wouldn't name the company, but she said a buyer is expected to close on the retail space this month and lease it out.

"We're holding our breath," Weston said. "It's a really good location."

Part of the reason downtown's retail market is so sparse, industry experts say, is because some businesses are waiting to see how many of the dozens of planned condo projects are built.

As a result, it may be easier for condo projects in more developed sections of downtown, such as the Channel District, to attract businesses.

A Mix At Channelside

Michael McGuinness, a developer of The Towers at Channelside across the street from the Channelside entertainment complex, said he sold all of his 3,800 square feet of retail space two years ago. Residents are expected to begin moving in this summer, and while the retail owner hasn't announced tenants yet, McGuinness said he's confident the space will be filled.

The buyers were a mix of people who want to run businesses there and those who hope to lease it out. He said he's been told a locally owned health club, lounge and small restaurants may move in.

It's not just developers who want these kinds of businesses in their buildings. The city does, too, said Michael Chen, a city manager. To help developers, the city offers density incentives on buildings that include some types of retail.

Retail will improve the atmosphere of the city by attracting people to downtown after business hours, Chen said.

Stoltenberg of Grand Central at Kennedy started marketing his retail space this month and said he expects it to take two to three years for the retail to thrive.

While national retailers tend to prefer to lease space, local ones sometimes want to buy, Stoltenberg said.

"I decided to do this because I was approached by businesses," he said. "They said they don't want to take the chance on the rent skyrocketing in two years when downtown is bustling."

The SkyPoint condominium, under construction on Ashley Street, is expected to be finished this spring.

The development company, Novare-intown Tampa Development LLC, plans to build another condo tower and a condo and hotel building in the same area downtown. Some retail is planned for all three.

Novare-intown's Greg Minder said his company has deals in the works with retailers for SkyPoint but would not provide details. He acknowledged retailers' reluctance but said that will change over the next two years as more people call downtown home.

"Homes and families and disposable income need to come to downtown Tampa for nights and weekends in order for the retail market to change."

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.