While the immediate focus has been the closure announcement, much of the context for just how big of a blow this is to the Square has been absent. Remember, the grocery space was one of the biggest design failures of RTS from the beginning. The demolition of Magruder's to make way for the new town center was originally meant to be made up for with a new grocery store in the new development.
But the anchor grocery space was hidden in the back corner of the development off N. Washington Street. Major grocery chains passed on the opportunity, leaving landlord Federal Realty without the prize retail anchor they needed for maximum traffic. In fact, Dawson's extracted concessions from Federal before agreeing to the lease, including over-the-top signage the market argued was necessary just for potential patrons to locate their hidden spot.
Apparently, the major grocery chains know their stuff. Dawson's never had anything close to the traffic you would find at any Giant, Safeway or even Trader Joe's or MOM's Organic Market. The too-few complimentary reserved parking spaces for Dawson's were often full at prime times, leaving grocery shoppers in the grip of a paid/validation parking scheme that has enraged drivers and business owners alike.
Failure is not an option here. While there have been sentiments that RTS is another Rockville Mall, it's not going anywhere after the investments made by all the stakeholders, including the City of Rockville. There may be no assurance of attracting another grocer unless major changes are made to the parking arrangement.
Perhaps if Federal Realty could attract either a Lidl store or an Asian grocery store, and provide enough reserved parking, the grocery space could work. Many have argued that more residences are needed within walking distance to provide more foot traffic for all businesses in the Town Square. Two large apartment towers are coming within one block of the development, but they won't be delivered for several more years.
Unfortunately, the new developments have also provided more dining competition. Gordon Biersch had the craft beer market cornered until World of Beer came along in the Upton/Cambria Suites development, for example. A longer and stronger roster of restaurants at rival developments like Pike & Rose, Washingtonian Center/Rio and Downtown Crown - and their lure of free parking - has cost Rockville Town Square much traffic. A new Wegman's down the Pike in a couple of years won't help matters.