Reusing is in for businesses

By Melissa Westphal

BusinessRockford.com

“Bigger is better” takes on new meaning when it comes to big-name retail outlets and where they decide to set up shop.

But it’s not just bigger. Add newer, closer to the competition and not being afraid to leave an old building behind.

A few recent announcements in the Rock River Valley:

A Toys “R” Us/Babies “R” Us superstore is moving into the old Media Play at Forest Plaza in Rockford while the Toys “R” Us store near Perryville Road will close.

Two CVS stores, one on East Riverside Boulevard and one on East State Street, are leaving sites within retail developments to construct larger, free-standing buildings with drive-through pharmacies.

Discount retailer T.J. Maxx left its Rockford location to open a larger store and join the burgeoning Illinois 173 corridor in Machesney Park.

So while empty buildings are becoming increasingly common in the region, business leaders and municipal officials are working together to find the best use for the sites. How long those buildings sit empty, though, is the real unknown.

Moving to grow
A company relocates for several reasons.

Perhaps it has outgrown its location and is landlocked, or a municipality puts certain restrictions on individual outlots.

A larger tenant also wants to maintain visibility from larger rights of way, especially if development that’s closer to the road or intersection has built around them.

Then there’s the tendency of big-box stores to look for for larger sizes, such as Wal-Mart Superstore and SuperTarget.

“Most companies want to diversify their product mix, meaning they need more space internally to do that,” said Roger Dahlstrom, a senior research associate with the Northern Illinois University Center for Governmental Studies. “The larger demand for parking goes hand in hand.”

And while the adage of moving toward the rooftops remains true, companies are using more sophisticated methods to determine placement.

“It’s not just how many rooftops but the types of rooftops,” Dahlstrom said. “There are analytical procedures out there that can reasonably pick out disposable income from household income.”

Visibility from a drive-by standpoint is an important factor for location, and businesses look at traffic flow during morning and evening commutes and weekend travel. Sophisticated travel studies will recommend which quadrant of an intersection a company should buy.

Walgreens has created a formula of building near corners of busy intersections with easy access to drive-through pharmacies, but Dahlstrom also pointed to McDonald’s for its easy-access construction and high visibility.

The ‘mega store’ format
Menards spokesman Jeff Abbott said the company made a commitment several years ago to expand the size of its stores to include garden centers and larger, full-service lumberyards. The store at 10253 N. Second St. in Machesney Park, built in October 1995, didn’t have enough land available for expansion, so officials decided to replace it with the “mega store” format less than a mile away, 1600 W. Lane Road.

“We are able to carry the materials and tools for all home-improvement projects, from just needing a light bulb to building a house,” Abbott said.

The new store also carries appliances, pet products, lawn and garden supplies, and some groceries for one-stop shopping. The old store had 144,000 square feet of space; the new one has more than 200,000 square feet, including the 26,000-square-foot outdoor garden/storage area.

Abbott said the company didn’t hesitate to build a short distance from the old store because officials knew the area had “excellent guest traffic.” The company plans to sell the old building, but a buyer has not been identified.

A steady pace
Chad Atkinson, director of Machesney Park’s planning and zoning department, said there was some concern from the village about what would happen with the old Menards building, but officials also were excited that the company saw an even bigger investment in the region.

Menards “saw the limitations at that site, but they were also doing well enough to build a bigger store,” he said.

The old Menards site is zoned commercial, so the use should stay consistent, Atkinson said. Village residents have told officials they would like to see a grocery in that central location, and possibly a bookstore or electronics store.

Machesney Park has seen its share of businesses leaving old locations to build new. The best example is Machesney Park Mall, once filled with retail outlets and anchor stores.

Osco, now known as CVS, left the mall and built a freestanding building at Illinois 251 and Harlem Road. Kohl’s department store left the mall and built along Illinois 173. Village leaders hope a tax increment financing district that includes the mall will bring back some of its glory days. A TIF district approved in 1991 helped spur development along 173.

Rubloff Development Group owns the mall property, and Atkinson said the company has permits to do interior demolition work and is working with the village on uses for the mall.

“We’re pretty pleased with the steady pace of development, especially when you hear so much with the downturn in housing,” Atkinson said. “The pace has slowed somewhat, but it’s still very steady.”

Pete Maratos bought the former Del Taco building, 1555 W. Lane Road, in the middle of the 173 district when it closed late last year. The restaurant reopened two weeks ago as Pete’s Tom & Jerry’s, serving such menu items as gyros, hamburgers and hot dogs.

Maratos, who also owns the Tom & Jerry’s in Rockford and Belvidere, said the location is perfect.

“When this became available, I couldn’t pass it up. I was on the phone a few days after I heard it closed.”

Think about the value
Dahlstrom talks to communities about the economic geography of retailing, warning that with the characteristics of depreciation and the life span of retail marketing, communities should have plans for commercial buildings beyond eight to 10 years.
“Communities should be thinking about what the next use is going to be,” he said. “Essentially, the buildings have economic or functional obsolesence.”

Consider retail value versus community value. Dahlstrom said the Rockford Public Library’s purchase of the old Barnes & Noble building, 6685 E. State St., is an example of “adaptive reuse.”

Barnes & Noble opened its new store last year at The District at CherryVale, opting for an additional 8,000 square feet.

Some residents and officials were concerned that the tax-exempt library’s move will crimp the sales and property taxes that came from Barnes & Noble. But Dahlstrom emphasized that the library has community value rather than retail value.

Executive Director Frank Novak said the light bulb went on when he heard the rumors about Barnes & Noble leaving its 23,000 square feet of space on East State. Officials hope to open there by spring 2009; they also will close the 7,9000-square-foot northeast branch on North Alpine Road.

A new beginning
The CVS project at South Alpine Road and East State Street is a win-win for the neighborhood, said Pete Roche, executive vice president of Riverside Community Bank, 4048 E. State St., which sits along the area dubbed the “Miracle Mile.”

Roche heads the nonprofit group of business leaders and residents called Miracle Mile Rockford aimed at revitalizing the stretch of East State from SwedishAmerican Hospital to Rockford College and north to Morsay Drive.

“We were able to keep CVS in the area,” Roche said. “They’re going to move up to the corner of State and Alpine and make that corner 100 times better.”

Roche said keeping CVS in the neighborhood — it’ll move to the spot where Entre Computer Solutions used to be — should spur development. CVS owns the retail plaza at its current site, 3915 E. State St., which also housed the former Magna grocery.

The company is working with the city and the nonprofit group to bring mixed use of retail/office space to the site, which will be torn down. Roche said there’s been some interest in the site, which is in a TIF area.

“It’s a beginning to help redevelop this area,” he said.

Reach staff writer Melissa Westphal at 815-987-1341 or mwestpha@rrstar.com.

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What the heck is adaptive reuse?
Communities can encourage more investment or reinvestment of vacant or underutilized buildings and lots. It also can encourage efficient use of infrastructure resources, improve streetscapes and further economic development opportunities.

The practice is seen as a factor in land conservation and reducing the amount of sprawl. It is often more efficient to redevelop buildings where infrastructure — water, sewer and roads — is in place, rather than build new on faraway greenfield sites.

Rick Gonzalez has focused on adaptive reuse for more than 20 years in West Palm Beach, Fla. He founded REG Architects Inc. there in 1988.

Gonzalez says downtown sites are more conducive to adaptive reuse because they’re historical and adjacent to other buildings, while suburban shopping centers with big parking lots often require more infrastructure work.

Business leaders looking to take over a building should bring in professionals familiar with the work, and they should meet with stakeholders in the region — residents, other local business owners and city officials — to analyze the property and brainstorm ideas for what fits the region best.

Municipalities often will “bend over backward,” offering tax breaks and other incentives to help developers implement their vision. From there, the focus should be on marketing that vision to the outside world, he says.

 

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