Repacking Boxes

Repacking Boxes

Repacking Boxes

Towns reclaim space vacated by closed big-box stores.

BY BAILEY BERG

The whole thing started with Toys“R”Us on Jan. 10, 2006. That day — an average, post-holidays Tuesday — the retailer announced it would close 87 stores as part of corporate restructuring. It was like a starter gun going off. In the eight years that followed, dozens of corporations have shuttered countless big-box outlets — those massive steel caverns of consumerism that dot suburban landscapes. Sears: 100 stores. Linens N Things: 371 stores. Circuit City: 567 stores. By the end of 2012 there was 870.7 million square feet of vacant retail space in the United States. Of that space, 35 percent — almost 300 million square feet — was empty big-box stores.

But communities are fighting back, repacking big-box stores with local stores, schools, libraries, community centers and more. Some are even preventing superstores from moving in. Cities are reconsidering how America shops — and what neighborhoods look like when the Going Out of Business sales are over.

Big Buildings, Big Problems

Sarah Schindler thinks about big-box stores — a lot. An associate law professor at the University of Maine, she spent time researching the impact empty retail outlets can have on American cities. She even wrote a piece for the 2012 University of Colorado Law Review titled “The Future of Abandoned Big Box Stores.” She said the empty behemoths cause a number of social and economic problems.

“People have their home, their office and their community or sidewalk space. So when people see closings in their community, it gives them a sense of foreboding,” Schindler said. “They think that because stores are closing, the area is on the downswing and people are fleeing.”

This mindset, Schindler said, furthers the ideas of economic downturn and a breakdown in social capital.

But it also causes jumbo-sized problems from an economic perspective, too. While the space was once full and bringing in revenue and sales tax, now it’s doing nothing for the surrounding community.

“It’s not a productive use of space,” said Dave Rippe, the economic developer for Hastings, Neb. “We’d much rather have the employment, the company paying property taxes and the square footage to generate sales tax. Otherwise it’s just vacant, deteriorating space.”

The empty buildings also solicit trouble, especially vandalism. Even minor signals of disorder, like weeds in the parking lot or a broken window, contribute to and accelerate the decline of the neighborhood.

“If the area looks good, people will treat it with respect, but as soon as you get one vacant building with one broken window, people get the idea that they can break another,” Schindler said. “When no one fixes it, it gives the impression that nobody cares about that community and it can lead to a rapid decline.”

Galesburg, Ill., Lieutenant Russ Idle has noticed some minor damage around a closed Walmart.

“Once you start to get damage to a specific property, it kind of grows on itself,” Idle said. “That can be a problem when you get areas that are abandoned.”

Empty buildings repel shoppers from stores in that area. Schindler said depending on where the physical structure lies on the vacancy and abandonment continuum, the effects can include blight, reduced property values, loss of tax revenues, decrease in social capital and environmental problems.

Putting the Brake on Big-Boxes

Knowing the problems that often come with empty big-box stores, communities are starting to combat the big-box-alypse.

Some cities are enacting laws that limit the size of retailers. Neither Turlock, Calif., nor Madison, Wis., will allow stores with floor areas larger than 100,000 square feet. Ashland, Oreg., and Skaneateles, N.Y., don’t allow stores larger than 45,000 square feet, while Damariscotta, Maine, bars stores larger than 30,000 square feet.

They hope preventing the stores from building means they won’t be stuck with them after they close.

Some cities make retailers provide money at the time of construction to be used to demolish the building in the event that it is abandoned. Not a bad idea, considering repurposing the immense stores is not easy.

Many big box leases expressly disallow a competitor from leasing the space after it is vacated. When Walmart sells a structure, it prohibits the property from being used as another large discount store, warehouse membership club, grocery store, pharmacy, large bowling alley, movie theatre or health spa in the future. Maybe that’s why Walmart currently has 620 outlet stores listed for sale.

In fact, a 2005 study by Texas A&M University researchers Harold Hunt and John Ginder titled “Lights Out: When Wal-Marts Go Dark” found former Walmarts in Texas remained unoccupied for approximately three years on average. One was empty for 17 years.

Beyond contractual limitations, Schindler said the structure itself is hard to recycle.

“They’re just these cavernous buildings that lack windows and interior walls,” Schindler said. “It’s not suited to many businesses, and it’s hard for people to come in and divide that space up. They’d have to install skylights and walls, which costs more than it is worth in many cases.”

The city council of Green Bay, Wis., recently denied Walmart’s petition to take the first administrative step in plans to build a 154,000-square-foot store in a historical area near downtown. Smart move considering an analysis by city officials found Walmart’s proposed store would be valued at $634,000 per acre. That’s less than half of the $1.4 million per acre the city could expect from a mixed-use development.

“We would get more tax revenue from a mixed-use downtown area,” said Bill Lockery, the principal planner for Green Bay. “The council decided to stick with smaller stores because we’d get more out of having several stores than we would have from the one big-box store.”

Second Lives of Big-Box Stores

While recycling these stores is not always easy, communities across the country are refilling or breaking down vacant big-box stores in their area.

Some switches were easy. Books-A-Million bought out a number of vacant Borders, and Ultimate Electronics moved in shortly after Circuit City moved out; some were replaced by locally owned stores.

Other changes were more inventive, like the SPAM Museum in Austin, Minn., which was once a Kmart.

After a devastating tornado in Joplin, Mo., in May 2011, a former department store building was turned into a high school over summer vacation. The school now houses more than 1,200 students in 96,000 square feet of space. Moveable walls divide the former warehouse building into six 200-person “learning communities.” Don’t feel too bad for the students — the new school has a coffee bar and an IT genius bar.

After 12 years of sitting empty, one Kmart in Hastings, Neb., was turned into a Head Start Child and Family Development Program building, which finally brought the organization’s many programs under one roof.

“Because of the size of the space, we’re able to offer all of our programs in this one building,” said the executive director, Deb Ross. “Everything from our ESL to our GED classes are here. It makes it much cheaper to operate. It means we can share things like copy machines and receptionists.”

In Wisconsin Rapids, Wis., an old Walmart became a senior center with a library, meeting rooms, a walking track, pool tables, a kitchen and computer center.

“That’s the real benefit of big-box stores closing,” Schlinder said. “It gives the community the opportunity to reimagine what their space can look like. I think a lot of people are realizing that maybe it’d be better to focus on the people and create a bigger sense of community with smaller stores.”