The life of a big-box store can be fleeting. And once one goes dark, it can sit empty for years.
A Home Depot opened around 2003 in Cottage Grove and closed within six years. It’s still empty. Now Rainbow Foods, located in the same strip mall, is shuttered.
Combined, that’s 160,000 square feet of empty big-box space at one of the east metro city’s gateway corners.
“We thought we’d solved the problem forever,” said Cottage Grove City Administrator Ryan Schroeder, describing the ebullient mood when the national hardware chain came to town. “Who ever hears of a Home Depot closing? It’s just not something you see as a possibility, given the strength of the business.”
Cottage Grove, Oakdale, St. Anthony, Shoreview, Columbia Heights, Savage and Robbinsdale are just a few of the cities competing to fill empty big-box space. A fluctuating retail market, the recent sell-off of the Rainbow Foods brand, and looming Kmart closures means even more empty sites on the horizon.
“The Supervalu-Rainbow deal was a game changer,” said Deb Carlson, president of the Minnesota Shopping Center Association. “Absolutely, there are more empty big boxes than we’ve usually seen.”
Other brands also have closed stores to reposition themselves. Wal-Mart closed its St. Anthony store and will shutter another in Blaine while opening superstores nearby with full grocery lines.
The most desirable locations will lure big tenants, Carlson speculates, but others may have to be divided into smaller retail spaces or razed.
Some cities take a hands-off approach, confident that market forces will fill the void, while others aggressively court new retailers.
Questions about the future of the empty Rainbow store on Central Avenue in Columbia Heights generate the most calls and questions to Joe Hogeboom, that city’s community development director. It’s been empty since January.
“Nobody wants to look at a vacant big-box store,” Hogeboom said. “It’s a community pride thing, especially when the economy is doing well.”
Even though the city does not own the land, Hogeboom has personally called nearly half a dozen retailers to gauge their interest in it, but so far there have been no takers. He’s called the craft store chain Michaels, Hy-Vee, Festival Foods, the Asian grocer Sun Foods and Big Lots.
“The Rainbow-sized business will be hard to fill. We either see stores get bigger — SuperTarget or Wal-Mart — or they get smaller,” he said.
There are additional challenges. Central Avenue is a busy corridor, but big-box retailers prefer locations on interstates. There are several other grocery stores nearby. Also, Columbia Heights allows only city-owned liquor stores, and many big-box retailers want to sell liquor.
“Municipal liquor makes money for the city, but it can be a bad thing when you are trying to court a business,” Hogeboom said.
Perhaps one of the biggest challenges is competition. Less than 2 miles away from the Columbia Heights site, a former Wal-Mart sits empty in St. Anthony. In 2005, it opened as an anchor tenant in the Silver Lake Village, closing nine years later so the retailer could open a superstore nearby.
St. Anthony officials are confident site owner Inland Commercial Property Management will find a tenant.
“We are fortunate it’s part of an overall development,” said St. Anthony City Manager Mark Casey. “We have that synergy. It’s not a stand-alone.”
Inland, which is currently seeking to fill big-box space in several Twin Cities suburbs in addition to St. Anthony, said there’s intense interest in several sites. The firm has letters of intent from new retailers for two former Rainbows in Coon Rapids and Maple Grove.
“There are still plenty of retail tenants out there to entice,” said Rick Plessner, vice president at Inland Real Estate Corp.
St. Anthony’s former Wal-Mart site has also generated interest, he said. “The site is a very, very strong site,” Plessner said. “We have targeted four or five great users. We have 10 years left on the … lease. … We don’t have to be in a big rush.”
To the south, Savage is also taking a more hands-off approach with its empty Rainbow store on Hwy. 13.
“There is a misunderstanding on the part of the general public on what role the city plays in filling big, empty buildings,” said Savage City Administrator Barry Stock. “Market forces are what drives business locations. It’s location, location, location.”
Other cities are more wary of market forces.
In Oakdale, where a Kmart closed in September, “Our economic development department is actively working with property management,” said Suzanne Warren, interim city administrator.
Across the street, the city is in the midst of a redevelopment of the former Oakdale Mall. For years, it limped along as a deteriorating retail site.
Four years ago, the city partnered with a developer to buy the mall, raze it and prepare it for redevelopment. Now there are new senior apartments on the site, and Hy-Vee is poised to buy part of it to build a grocery store that would include a restaurant, coffee shop, liquor store and gas station.
“There is a philosophical difference among cities — ‘Let the market carry it’ versus ‘Let’s get out in front of it and put some money into it,’ ” Warren said. “Redevelopment is not cheap. You do have to put in money up front, and there will always be a risk.”
But Oakdale does not want to see that corner go downhill again, she said. “That is kind of the entrance to the city,” Warren said. “Anytime you enter an area and your first impression is ‘ewww,’ it kind of sticks with you.”
Cities are often cautious when exploring what could go into an empty site.
“We had met with the property owner to … offer our help in attracting a new quality user,” said Shoreview Community Development Director Tom Simonson of the city’s empty Rainbow. “We want to make sure less-desirable reuses of the building don’t happen — dividing it up or discount retail. … The first goal of the city would be to secure another grocery.”
In Cottage Grove, city staff hope an uptick in the construction cycle will solve its empty big-box problem.
“There will be growth that will support retail at this location,” Schroeder said. “This corner will live again.”