What will happen to vacant big-box stores?

Story from the archives by Amanda Hurley / Jan. 16, 2004

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Northern Virginia strip malls (Constance Beaumont)

Two years ago this month, giant retailer Kmart filed for Chapter 11 bankruptcy protection, and within months the Troy, Mich.-based company announced it would shut the doors of 284 of its 2,000 stores. In 2001, Montgomery Ward and Service Merchandise also went bankrupt; Caldor discount stores closed in 1999. Will tens or even hundreds of these "big-box" stores—some of which cover more than 100,000 square feet—be left to stand empty, as boarded-up blots on the landscape?

James Howard Kunstler, author of the 1999 book The Geography of Nowhere, says that Kmart's woes are symptomatic of a seismic shift in American commerce. "National chain retail is going to be in trouble, sooner rather than later," Kunstler says. "These companies are enjoying economies that are only possible with an endless supply of cheap oil and cheap labor on the other side of the world. I'd urge the public to think of big-box retail as a historical anomaly, rather than a normative thing."

Kunstler isn't optimistic about the stores' prospects for reuse. "Often these buildings sit without being reused for a decade," he says. "By then, the flat roofs have started to leak, and the buildings end up being derelict. Or sometimes they're taken over by marginal businesses, like permanent flea markets."

While some residents worry about these types of businesses moving into their local megastore, others worry they won't be able to attract any business at all. Caesar Carrino, mayor of Wadsworth, Ohio, a city of 21,000 located 35 miles southeast of Cleveland, says that if the Kmart in Wadsworth closes, local shoppers will sorely miss it, and the town will have trouble finding another tenant. "It's too big for a Kohl's. It's too small for Wal-Mart. Target hasn't talked with anyone in Wadsworth. And no one seems to be moving, because of the economy," he says.

The problem isn't confined to small towns and cities. Charlotte, N.C., has about two million square feet of vacant retail space, and residents are growing increasingly concerned. "People have suddenly gotten very interested in this issue," says Mary Hopper, chairperson of the Charlotte-Mecklenburg Planning Commission. "It comes up a lot in community meetings." Problem areas in Charlotte, she says, include strip malls on inner-city corridors, where there is little or no growth.

To find a solution, Hopper recently wrote a report on the reuse of big-box sites. She studied some of the measures adopted in other cities, and now plans to launch pilot redevelopment projects in Charlotte. "We should just scrap some of the sites," Hopper says. "But if you can reuse a building, let's figure out how to make it cost-effective to do so. In a lot of cases, the reuse will not be retail."

In 1998, Calthorpe and Associates, an architecture and urban design firm based in Berkeley, Calif., transformed a struggling strip mall in Mountain View, Calif., into a successful mixed-use, pedestrian-oriented neighborhood. The mall was completely demolished and recycled as foundations for new homes and parks.

First Grade, Aisle Five

One Charlotte Kmart whose blue lights had flickered out has become a charter school, managed by Mosaica Education Inc. According to CEO Michael Connelly, the K-7 Sugar Creek Charter School is not Mosaica's only big-box classroom: The company's George Washington Carver Academy in Highland Park, Mich., was formerly a supermarket, and its Kalamazoo Advantage Academy used to be a J. C. Penney.

Yet converting big-box stores to modern schools poses challenges, Connelly says. Schools have different heating and air circulation requirements and need more sinks and lavatories, so a plumbing overhaul is usually necessary. Mosaica also introduces skylights, to give the classrooms natural light.

Cheryl Ellis, director of Sugar Creek, couldn't be happier with her school's unusual home. "It's beautiful," she says. "We have large classrooms and windows looking in from the hallway. It works great." The two-year-old school is growing, and fortunately it has plenty of space to expand into. "We're probably using about a third of the building right now," Ellis estimates. "We could add another 15 or 20 classrooms." But does the old Kmart ambiance still linger? Definitely not, says Ellis: "When you walk in the door, this is school. There's no doubt about it."

Ellis says local business owners and residents are "thrilled" the school has moved in. But real-estate analyst Tom Dwyer of Reis.com, a company that tracks real-estate trends, points out that using retail space as a school isn't ideal: Although a school may support some nearby businesses—food vendors, for example—and keep real estate values from plummeting, it doesn't generate income or foot-traffic like a big retail establishment.

Still, Dwyer doubts many of the defunct Kmarts will remain vacant long-term. "Some [Kmart stores] are going to be snapped right up, because they're great locations that would perfectly fit someone else's shoppers; Home Depot and Lowe's would be prime candidates," he says. "The other locations are going to be the tough ones. Those could sit for years."

Dwyer draws a parallel between Kmart and Montgomery Ward. "About 60 percent of Montgomery Ward stores got snapped up fairly quickly, and there aren't many vacant now," Dwyer says.

Richard Longstreth, director of the graduate program in historic preservation at George Washington University in Washington, D.C., also takes a sanguine view. "Large-scale retailing is not going to go away. Even in the Depression, there was chain-store expansion," he says. "The arterial strips where these stores are located are remaking themselves all the time. That's just part of the fluctuating world of retail."

This story was originally published in Preservation Online on March 15, 2002.

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