Leasing agents seek new uses for space vacated in Dillons closings

08/20/2014 5:32 PM

08/21/2014 9:15 AM

On Thursday, a Minnesota-based firm will auction the shelves and other equipment that remained after Dillons closed two of its longtime Wichita stores last month.

The stores at 13th and Woodlawn and at Broadway and Harry were, like most grocery stores, neighborhood mainstays.

Grafe Auction said on its website that the public auctions – 10 a.m. at 1640 S. Broadway and 2:30 p.m. at 6297 E. 13th St. – include refrigerated cases, shelving, checkout lanes and steel tables.

After the equipment and furnishings are sold, the next step in the life of the buildings is unclear.

Filling spaces that big in older business districts and neighborhoods isn’t always easy – or quick – as evidenced by recent history.

At least some of the buildings that Hutchinson-based Dillons, a subsidiary of Kroger, has vacated in the past six years remain empty today, including one at Central and Oliver and another at Lincoln and Hydraulic, both of which were closed in 2008.

The Broadway and Harry building was opened as a Kroger store in 1953. The store at 13th and Woodlawn was opened as a Dillons in 1963 and in recent years had served as the anchor to the 85,623-square-foot Prairie Village Shopping Center.

Dillons spokeswoman Sheila Lowrie said both of the buildings were leased by Dillons “and have been turned over to the property owners.”

Customer demand for more products and amenities made the two stores obsolete, and it wasn’t feasible to expand or renovate them, Lowrie said when the stores were closed. Plus, they were in proximity to larger Dillons stores that had been renovated, expanded or both, she said.

The owner of the Harry and Broadway building is Gary Ruedebusch, according to Sedgwick County property records.

Ruedebusch couldn’t be reached at his home on Wednesday.

Heath Glasscock, manager of the Broadway Pharmacy at 1610 S. Broadway that sits on the east side of the former Dillons parking lot, said his store was “turning (the closure) into a positive” by offering more over-the-counter medicines. But Glasscock said he has noticed a decline in foot traffic to his pharmacy following the Dillons closing, mainly by customers who would stop in before or after shopping for groceries.

“That aspect of it is going to affect us,” he said.

Alternative use

NAI Martens is the leasing agent for the Prairie Village center.

Steve Martens, CEO of Martens Cos., said he is optimistic that there will be a replacement tenant or tenants for the 35,000-square-foot space Dillons has vacated.

“We have had several inquiries as to that space and are working through different proposals on possible uses of the space,” Martens said. “That 13th and Woodlawn location continues to be a viable location and one that will have a great alternative use, or possibly (another) grocery store.”

“We conducted some primary market research … we find that’s still a strong location for a grocery store,” he added.

Martens said the Dillons space could also end up being divided to accommodate two or more tenants in that space. “The location does make it very attractive to be divided,” he said. The Dillons was on the east end of Prairie Village’s largest building.

Martens said there are several regional retailers that often choose older, neighborhood retail centers over newer centers that are close to highways or interchanges. “Furniture stores or home furnishings, those types of things,” he said. “Tuesday Mornings is an example. So I think there’s opportunities like that.”

He said in May, before Dillons announced the closing of its 13th and Woodlawn store, he met with two or three retailers at the International Council of Shopping Centers convention about some other vacant space at Prairie Village, whose other large tenants include Hart Pharmacy and the Candle Club.

“They looked at the demographics and they liked what they saw,” Martens said. “So there was some interest and we’re still pursuing those conversations.”

Martens points to other area neighborhood retail centers that remain viable today such as Normandie Center at Central and Woodlawn and Lincoln Heights Village at Douglas and Oliver.

“Quite frankly that’s what I hope to see at Prairie Village,” he said.

Normandie Center suffered a big setback when Star Lumber & Supply left the shopping center between spring 2007 and January 2008, when its lease there expired. That space was eventually filled in 2012 by a Planet Fitness.

“Its kind of that junior box size, if you will, and I think a hardware store or a fitness concept are two good examples of back-fills that can use those spaces,” said Scott Harper, an associate at Landmark Commercial Real Estate who handles leasing at Normandie Center.

Joe Verbeckmoes, owner of Benchmark Real Estate, manages leasing at Lincoln Heights Village. He said neighborhood retail centers “kind of ebb and flow” in terms of retail tenants.

He said he doesn’t know if there is a successful formula for keeping or attracting retail tenants large or small. Verbeckmoes said his center has never had a grocery store tenant as large as a Dillons.

“Lincoln Heights has been successful because of long-term local merchants,” he said. “They are there every day. They know their customers, their neighborhoods.”

Verbeckmoes said he does know of other neighborhood retail centers that have successfully rebounded following the loss of a large tenant. He said years ago Dillons had a store in the Westlink Shopping Center at Central and Tyler. The space there was eventually filled by Westlake Ace Hardware.

“That hurts for that size of a center to lose a grocery or something that’s a traffic generator,” Verbeckmoes said.

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.

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