What to do with those empty big-box stores?

I was so happy to hear about enthusiasm for revitalizing North Avenue here in Grand Junction. Intended efforts are clearly under way as reported in the June 3 edition of the Daily Sentinel. The extraordinary transformations of downtown and the Horizon Drive corridors over the past decades were made possible with a lot of foresight and commitment by dedicated members of our community, so the North Avenue project looks promising. But it has three major challenges the other revitalized areas didn’t have.

North Avenue, as Highway 6, is owned by the state. And until recently, the City of Grand Junction has pretty much taken a hands-off approach.

North Avenue is about four miles long, covering considerably more commercial frontage area than downtown and Horizon Drive.

Third, and the point that most...

caught my attention, North Avenue has several huge empty big-box properties: Eastgate shopping center, the old Hobby Lobby and Valley Lumber buildings and Teller Arms Theater — all with big empty parking lots. What happens to those?

More than 3,000 big-box properties sit vacant across America, not including abandoned strip malls. These empty stores, or “ghost boxes,” are not a new problem. Chicago, for example, has been grappling with what to do with them since the mid-1990s.

Curious how other communities are bringing new life to the big empties, I went digging for ideas. The top six new-tenant categories are churches, libraries, schools, medical centers, recreation centers and museums. None of these entities even approach the tax revenues generated by their retail predecessors, so it’s hazy how cities and counties are covering the cost.

I came across proposals for mega indoor greenhouses and flea markets — but none that have become a reality. It just costs too much to renovate and operate these big spaces. Several indoor racetracks were created, including a pretty snazzy one in Texas, but the operating costs were overwhelming, and they didn’t last long.

More promising ideas include convention centers, concert arenas and skating rinks. It will be interesting to see how those proposals develop, if at all.

Nationwide, we’re overbuilt on retail space. We have about 25 to 30 square feet of retail space per person. According to reports from the Urban Land Institute, 11 percent of strip malls in North America “are derelict” and represent more than 300 million square feet of vacant retail space.

And now, except for Wal-Mart, many big-box retailers are downsizing, due primarily to increasing internet sales. (Amazon, according to several reports, is now considered the nation’s “healthiest retailer” and joins Wal-Mart as a global “superpower retailer.”)

Some communities are now requiring “demolition bonds” from big-box retailers as part of the permitting process before they can build a new store. They allow funds for demolition if the building remains unoccupied for a certain time after being vacated. I found tons of reports showing how the very presence of big empties or “ghost boxes” drags down entire urban areas with devalued property values, reduced traffic and scary crime statistics.

So much for comparative research.

But we live in Western Colorado, where tenacity and determination are second nature, so I called on a couple of local commercial real estate professionals with Bray Real Estate and Omega Realty to get their take. (They were most patient with their explanations, although I did get a bit lost when they got into explaining commercial property taxes. My goodness! I vowed to revisit the tax burdens on our local businesses in a future column.)

Turns out, even with creative ideas for transforming the empty big boxes, doing so is way more complicated and expensive than I imagined. There are HVAC system considerations in terms of cost to run and directing the air flows if the space is walled and sectioned, the number of bathrooms needed if the space is used by multiple tenants, ratio of windows to wall and floor space). And those are just for starters.

I was relieved to hear, however, that our local commercial guys are reasonably optimistic about finding new tenants for the big empties, even if it means partitioning them into smaller spaces for multiple tenants. And several large retailers are giving Western Colorado a longer, closer look these days.

The whole “supersize-me and bigger-is-better” craze of the 1980s and ‘90s may have run its course, but that doesn’t mean our problems are any smaller. Big ideas are still needed (yes, even more than New York City Mayor Bloomberg’s silly outlaw of Big Gulp sodas). I have no doubt that our local business and civic leaders, with the support of our tenacious citizenry, can and will step up to revitalize North Avenue — including new life for the big empties. We can do this, right?

This post is excerpted from my weekly column in The Daily Sentinel as published in the Sunday, June 10, 2012, edition of the newspaper.