Kmart store closings raise questions about future of retail vacancies at Washtenaw and Golfside
That all three survived the initial round of closings is a good thing for the county, since it preserves jobs at a time when we're still rebuilding from the economic downturn.
But it also raises more questions about the eastern corners of Washtenaw and Golfside, where the Ypsilanti Township Kmart has long resided.
Melanie Maxwell | AnnArbor.com
Every time I pass the area or stop at the Kmart, I can't help but think: This is one of the most obvious areas of retail real estate transition on the eastern edge of the county.
The reason: The 98,000-square-foot store is located in a shopping center with a long-vacant grocery store and across the street from a 38,000-square-foot former bowling alley. Both sit adjacent to wide expanses of parking spaces.
Those two vacancies already are striking near the corner of Washtenaw and Golfside, the western gateway to Ypsilanti Township. One reason is their sheer size and the slow pace of their transition; the other is the fact that a new building now under construction for a Happy's Pizza at the corner stands in contrast as a long-hoped-for redevelopment.
The co-anchor to Kmart is the former Farmer Jack store, which had been caught in litigation over the A&P bankruptcy.
The other building, on the south side of Washtenaw, is the former Ypsi Arbor Bowl, which closed in the spring.
Both that building and the ex-Farmer Jack are finally listed on the commercial real estate market. The grocery is for lease at $10 per square foot per year, while the bowling alley is for sale or lease at an undisclosed price. Based on its assessment, it has an estimated value of about $480,000.
Kmart, by contrast, has an estimated market value of about $3.1 million, based on its assessment (which valued it at about $3.7 million just a year earlier).
The size and cost of those buildings are likely to keep them on the market for some time in the current retail climate for development and predicted ongoing retail contraction.
Yet look across the street to see the optimism signaled by the construction of the Happy's Pizza building. The investment is a signal to the corridor that a business owner sees the risk as worth the cost. And it also represents the end to years of blight in the form of a former Dairy Mart building (and before that, Stop n Go) that was left to rot on its foundation.
If the Kmart closed, that move would leave the corner with nearly 200,000 square feet of combined and vacant commercial building space - much of it either obsolete or in desperate need of updating. And it would be just one of several options in an area that's been slow to absorb vacant commercial space.
What will be interesting to watch after the rest of the store closings are announced is how Sears Holding Co. handles its remaining stores. The Kmart brand has struggled to build brand loyalty among more favored discounters, like Walmart and Target, even as its merchandise quality has improved.
It's the shopping experience that suffers inside of its stores, many retail experts say. An investment in the aging stores in the chain - like the Ypsilanti Township one - could go a long ways toward improving the brand, store sales and the locations surrounding them.
Word on up to 50 additional store closings is likely to be released soon by Sears Holding Co. So far in Michigan, 7 stores will close, including Sears stores in Brighton, Adrian and Monroe.
Hear a report from MarketWatch Newsbreak: Kmart, Sears can't compete on price, service
Paula Gardner is News Director of AnnArbor.com. She can be contacted at 734-623-2586 or by email.