Like it or not, big-box stores, some of them anyhow, seem to be going the way of the typewriter and the LP record.
Already, oodles of them have disappeared.
Toys “R” Us kicked off the trend, shutting dozens of stores in 2006. In 2007, CompUSA, which (after bitter experience) I came to call “Incompetent USA,” shuttered all 103 outlets. In 2008, Linens ‘n Things went under, leaving behind 371 stores.
Then came — or, rather, went — Circuit City, with nearly 600 stores. In 2011, Sears shut 80 stores. And, of course, this year, heavy losses forced our very own Best Buy to put the kibosh on 50 stores, five in the Twin Cities metro area.
SuperValu is also facing dire problems; presumably some of its enormous Cub supermarkets could also be shuttered. Call it the “Big Box-alypse Now.”
(And, just so you know, Neiman Marcus has announced that it will close its downtown Minneapolis store next year. “That’s another big box — of a different kind — that’s going to be empty,” says Jim McComb, president of the Minneapolis-based real estate and retail consulting firm the McComb Group.)
Some still thriving
Some BBs are going strong, of course.
Walmart, Target and Costco seem unassailable by anything but nuclear attack. But it’s likely that the coming years will see more giant emporia disappear. The Internet is gradually but relentlessly drawing away customers, particularly those who like to shop at home in their jammies, by offering them greater choice and lower prices.
More crucial perhaps is the law of supply and demand.
“There is simply an overabundance of square footage of stores these days, perhaps twice as much as would be sustainable even in a healthy business environment,” according to Robin Lewis and Kurt Salmon, authors of “The New Rules of Retail.”
So we have to start asking: What are we going to do with those 50,000-square-foot buildings and their immense parking lots?
I first started thinking about this when I visited New Orleans two years post-Katrina. The family I was assigned to write about drove me around their neighborhood on the east side of the city. Most striking were the dozens of empty big-box stores surrounded by acres of weeds. The Home Depots, Staples and PetSmarts were not coming back because there were no longer enough people in the area to support them.
The abandoned big boxes were, in a way, more devastating than the loss of homes. Houses, after all, stand on small lots. But big-box stores are by definition big. And, when they sit derelict, as they did in New Orleans, they ruin the entire landscape. (Not that they were architectural gems to begin with, but they certainly look better when they are in use.)
Nobody can say with any precision how many big boxes in the Twin Cities are lying empty. But Dara Rudick, executive officer of the Minnesota Commercial Association of Real Estate, or MNCAR, says that 68 big boxes across the state are looking for tenants. Because of the way the organization collects data, she says, “That’s a minimum.”
Repurposing big boxes won’t be easy.
Past practice has been to bring in a new big-box retailer. When Circuit City shut down its local stores, for example, Ultimate Electronics moved in. But then last year, it went under, too.
These days, there aren’t many retailers capable of supporting a huge store. Keeping a large inventory on hand to fill shelves in a 40,000- to 60,000-square-foot store is expensive and possibly futile when consumers can use their smartphones to compare prices and in seconds find a better deal elsewhere.
So, more retailers are thinking small.
That means dividing up a big box and leasing it to several tenants to share. Such a project can be very complicated and expensive.
John Johannson, senior vice president with the Welsh Cos. (now affilated with Collier International), ticks off what he and his partners had to undertake to transform the former Circuit City Plaza at I-494 and France Avenue (built in 1993) from a four-store development to one housing seven: separating utilities, not just for billing but for control; creating distinct heating and cooling systems, installing more doors; constructing shared loading docks and trash disposal and regrading the parking lot. The new strip, to be called the Southdale I494 Center, has already leased spaced to Michael’s, Staples, Total Hockey and Trader Joe’s.
Johannson wouldn’t divulge how much the renovation cost but says, “It’s a significant amount, considering that rents are not increasing.”
Across the country, there have been even more creative repurposings. One is the Spam Museum in Austin, Minn., which was once a 33,000-square-foot Kmart. Architects renovated both the inside and outside to create the museum, which hosts 100,000 visitors annually, and Hormel corporate offices.
According to Julia Christensen, who describes how several communities transformed big boxes in her book, “Big Box Reuse,” during the years when the Kmart sat empty, the surrounding area went into decline. After the renovation, it came back to life.
• Wisconsin Rapids redeveloped an old Walmart into a senior center that houses a library, meeting rooms, a walking track, pool tables, a kitchen and computer center.
• McAllen, Texas, took another abandoned Walmart and, with the help of Minneapolis architects Meyer, Scherer & Rockcastle, transformed it into the country’s largest single-story public library.
Another possibility: Redesign the big boxes into mini-malls. I could see developers adding a second story, creating more entrances (instead of just the one big boxes now have to guard against pilfering), lining the walls with small boutiques and opening up the centers for eating and schmoozing, drinking coffee and working on laptops.
Eventually, as the population grows and the density around big boxes increases, as it’s bound to do in some areas, developers could add new structures in the parking lots and install pedestrian walkways to connect the former big box to them. Towns and cities should encourage such development because denser, more downtown-like development produces more tax revenue than plain, old big boxes.
Not every big box will be capable of transformation, however. No doubt some will have to be torn down and their parking lots returned to nature or built on once again.
I like to think that when people — architects, developers or whoever — put up a building, they’re planning for the long term — that the structure will stay useful, maybe not for hundreds of years like Gothic cathedrals, but at the very least, for the 39 years the IRS allows for depreciation.
So, maybe it was a mistake for towns and cities to allow so many big boxes to be built. Then again, anticipating needs 30 or 40 years out isn’t all that easy.
Maybe the solution is to ponder, when we go on our next building jag, how else could we use this structure if, as is likely, everything changes?