|
Up
| |
Filling Vacant Big Box Space May
Take More Than Change of Perspective
By
Packy Moran
The causes for vacant big box space seems to be a
varied as the spaces themselves. Often a chain has overexpanded and needs to cut
back losses to improve profits, sometimes the facility is antiquated by a new
corporate prototype requiring a new, larger footprint. In the cases of
Montgomery Ward, Heilig-Meyers, Ames and others, large amounts of space are
vacated because of wide spread closings caused by corporate-level financial
hardships. All of these upper-level decisions tend to leave the locals holding
the bag. Developers, local governments and citizens have different ideas on how
to handle the symptom (vacant big boxes) and how to prevent the disease.
For their part local governments find themselves pulled in all directions when
it comes to vacant retail space. The bodies have the most control before the
development is built, but each new development increases the tax base and
delaying a potential cash cow is not in their best interest. Developers have to
walk the tightrope of public opinion as well, securing the best possible deal
for their tenants while avoiding public outrage that can doom a project. Private
citizens are concerned about the enviromental impact of any new development,
both ecological and on the local economy. Examples of all three parties finding
solutions for big vacant spaces sometimes involve “thinking outside the box.”
Developers will constantly change strategy and look for different angles to find
a tenant, or even a an alternative use that will turn a dormant spot into a
payday. Phillips Edison and Company (513-554-1100) acquired the 193,000 sq.ft.
Plaza of the Oaks in St. Petersburg, FL. The center was anchored by Winn-Dixie
but now has an occupancy rate of under 40%. Area demographics include an average
age of approximately 60 years old and an average annual household income of
$34,658 within a one-mile radius increasing the difficulty of leasing the space.
“All the nationals (retailers) want to be on U.S. 19 or at one of the newer
shopping centers further south on Little Road,” Phillips Edison and Co.’s Wes
Moyer told the St. Petersburg Times. Moyer has chosen to refocus on factory
direct showrooms for appliances, pool and patio spas and mattresses to tenant
the center. MLP Investments has gone beyond the realm of retail in its planned
reinvention of a former Target site in downtown Kirkwood, MO. The firm wants to
build a $40 million mixed-use development with 170 apartment units, 24
townhouses and supporting retail space. The company argues that younger people
and small families appreciate the proximity to downtown work locations and that
retailers will follow.
City governments as well have come up with unique ideas to fill large retail
vacancies. Of course, most cities trade what some need most, tax revenue, in
order to land new stores in old developments. Other times only city regulations
or permit delays need to be excused to ease a property back into profitability.
The City of San Dimas, CA worked with Lowe’s Home Improvement Warehouse to allow
the retailer to demolish a former Levitz locations and build a new facility.
Sometimes no retailer is willing or able to retenant a location, that’s when
opportunities have to be created. The City of Ontario, CA acquired a former
Fedco big box location to convert into an expanded police station. The project
will be delivered for half of what the city had initially planned to spend on
the station and a potential blight has been taken off the market. Another
California municipality, Pomona Valley, leased the entirety of the failed Plaza
Azteca Mall located on Indian Hill Boulevard. The government converted the
center into different uses for The Pomona Valley Educational Foundation
including classrooms, school district facilities and even some teacher housing.
Developers have caught on, often coming to city planners and county managers
with vacant space. Al Summers owns a now-vacant Ames location in Winfield, WV
near Charleston. He is pushing the state to renovate and lease his property as
the home of the West Virginia Lottery Commission. The Putnam County Development
Authority has purchased an option on a parcel in Hurricane, WV with designs on a
business park for the state lottery. Developers have also caught the brunt of
local legislation as well. Buckingham, Bucks County, PA passed a rule that the
developer must return the land to its original state if any development sits
vacant for more than 12 consecutive months. The law has yet to be tested in the
commonwealth’s court system.
Private citizens are only involved in the extreme situations. Public opinion is
often feared by developers where more often than not land owners are portrayed
as mercenary money-grubbers who don’t care about the physical environment or
locally-owned businesses. Two more permanent anti-big box efforts offer web
sites to recruit members and promote their message. John Fix, III is involved
with his family’s business running the Cornell True Value Hardware store and the
Brew Shop at Cornell’s in Eastchester, NY. The company began its parody website
at www.bigbox.com in 1995. The site is a parody of national retailers, complete
with training films, corporate histories and expansion plans. The site is
humorous but also makes a point about the drop in customer service and the
effects of the big chain stores on locally owned businesses. Ironically, the
site was also created to help promote the hardware store, which has blossomed as
an online retailer. “The site was started from a concern that big box
encroachment would effect not only my business, but the community I live in,”
Fix said.
Al Norman also began as a concerned citizen. His organization “Sprawl Busters”
has grown into a grassroots support organization and Norman has published books
and given numerous speeches on how to stop big box development. After
successfully preventing Wal*Mart from building in his hometown of Greenfield,
MA; Norman set up his web site www.sprawl-busters.com and community activists
have been seeking him out ever since. Norman, who works for a coalition of
non-profits serving the elderly in MA, has been contacted by groups as far away
as Puerto Rico and Barbados. “All of these citizen groups are slowing these
developers down quite a bit,” Norman said. “I know that our work is effecting
these big corporations bottom line.” He says that the corporations are not
generally concerned with the wants or needs of the community. “The big
corporations are too arrogant to talk to citizen groups,” he said. “They are
watching the situation but they want to just blow the local groups away.”
Norman’s latest book is entitled Slam Dunking Wal*Mart and is available through
his web site.
Although he has never worked for or been contacted by a retail developer, Norman
insists that he is not anti-development. “I am for appropriate development that
is scaled right to the community it is in,” Norman said. He suggested “wind
tunnels to test airplanes in” when asked what might be done with vacant big
boxes. Recently Norman helped prevent Food Lion from building a store in a flood
plain in a small town in NC that is home to Andy Griffith. “To help the town
that Andy Griffith calls the closest thing to Mayberry was a thrill,” Norman
said. “It will always be more beneficial for me to help a town stay or become
what it wants to be, than it would be personally fulfilling to see through a
development project that improves someone’s bottom line.”
Filling vacant big box space is in the best interest of all parties, but the
only thing each group seems to share is blame; taking it and dishing it out.
Concepts that retrofit existing facilities or that will sublet from distressed
retailers are valued and scarce commodities. Keep looking to the DealMakers as
retailers like this are listed with regularity.
|