Retail Boom Hits Valley National Chains Staking Out Sites On Fast-Growing Sullivan Corridor
It’s the All-Star game of retailing, and the heavy hitters are coming to town.
Development is booming in the Spokane Valley’s Sullivan corridor as some of the nation’s leading retailers begin to build stores or finalize lease agreements.
More than one million square feet of retail space are due to open within the next year in the area surrounding Sullivan and Interstate 90, changing forever the way the region’s consumers shop.
“It’s the most square footage ever built at any one time that this county has ever seen,” said John Morrow, a commercial real estate broker.
Consider:
On property owned by Hanson Industries east of the Spokane Valley Mall, Circuit City, Gart Sports, Barnes and Noble, and Staples - all leaders in their industries - intend to build new stores, said Dave Carlsen, Hanson’s real estate director.
Morgan Stewart, a spokesman for Virginia-based Circuit City, confirmed that the company has signed a lease for the Hanson site. The electronics retailer has 447 stores in 41 states. Circuit City’s first Spokane-area store - about 30,000 square feet - is under construction in Costco’s parking lot on the city’s North Side.
None of the other retailers on Hanson’s site have signed leases, but Gart Sports confirmed that the company plans to build a store there. Spokespeople for Barnes and Noble and Staples would not comment on the development.
Gart Sports operates 62 stores in six states. By year end, that will leap to 67 stores in eight states. The two Spokane stores will be Gart’s entrance into Washington state. The North Side store, at NorthPointe Plaza, is the bigger of the two, at 45,000 square feet.
“We think it will be a great project,” said Doug Morton, president of Gart, of the Spokane Valley site. “The combination of the freeway visibility and the inherent traffic from the mall makes it a winner.”
Barnes and Noble, one of the nation’s largest booksellers, has more than 1,000 stores nationwide. The company has considered the Spokane market for years, seeking the right site. Staples, which has about 570 office supply superstores nationwide, already is aggressively expanding in the Spokane area. Stores opened on the North Side in November and Coeur d’Alene in February.
The four new stores on Hanson’s property would range in size from 24,000 to 33,000 square feet, for a combined total of more than 100,000 square feet.
When the Spokane Valley Mall opens in August, it will add 750,000 square feet of retail space, with room to expand an additional 350,000 square feet.
A tour of the mall last week revealed that such national chains as Victoria’s Secret, Bed and Bath, Ben Bridge Jewelry, Lane Bryant and Athletic Fitters already are building stores. A free-standing Tony Roma’s restaurant is under construction on one of seven retail pads surrounding the mall.
Tenant Coordinator Kevin Korthuis said a dozen more tenants should begin construction on their stores within two weeks.
Work on the three major anchors, The Bon Marche, Sears, and J.C. Penney, also is well under way, as is construction of a 12-plex cinema, built by ACT III of Portland.
Wal-Mart, the nation’s largest retailer, will open a 135,000-square-foot store June 18 in Metropolitan Mortgage and Securities Co.’s Spokane Valley Plaza development, south of I-90 near Sullivan and Broadway.
Toy industry leader Toys ‘R’ Us is considering purchasing land and building a 32,0000-square-foot store next to Wal-Mart.
Though the agreement is tentative, Michael Miller, senior vice president of real estate for Toys ‘R’ Us, said, “We’re shooting to start construction by June 16.”
Numerous smaller tenants, such as Granny’s Buffet and 50% Off Card Shop, are considering spots on Metropolitan’s property.
There also is space for four other 30,000-square-foot stores next to Toys ‘R’ Us. Kyle BrinJones, retail manager for Metropolitan, said he has letters of intent from two other big-name retailers which he declined to reveal. The total project comprises 300,000 square feet of retail space.
Future development will continue to spread along the I-90 corridor. Hanson owns additional land east and west of the mall which will be developed, Carlsen said.
Black’s Valley Mall, a 31-acre parcel east of Wal-Mart, also will be developed, possibly with a hotel and another multi-plex cinema, said Dave Black, president and CEO of Tomlinson Black Group of Cos., and a partner in that development.
“Keep in mind that both sides of I-90 are going to go crazy,” Black said. “All the retailers have been hovering around the Valley and they’re finally landing. And they’re going to land all at once.”
Along and near the Sullivan corridor, other retailers have rushed to lease space, drawn to the burgeoning retail development along the freeway.
“The focus for these big-box users is tremendous. It has a draw that goes for miles,” said Denise Harfield, a sales associate for Clark Commercial Real Estate Co. “It’s not like your neighborhood grocery store that draws within a mile.”
Future Shop, Canada’s largest electronics dealer, opened in November and will compete head to head with the Circuit City slated for Hanson’s property.
Petco and PETsMART, the nation’s two largest pet supply companies, opened on and near Sullivan during the past year.
Other smaller stores and fast-food restaurants, such as Hollywood Video, Taco Bell and Schlotzsky’s Deli, have opened stores on Sullivan. A 35,000-square-foot Huckleberry’s Fresh Market opened in April.
Some retail experts say that the market will be quickly over-saturated. As examples, Morrow points to the empty Smith’s Home Furnishings building on Sullivan and the vacant Best store at Sullivan and Sprague.
“I think it’s going to get over-built really fast,” Morrow said. “There are only so many categories.”
The Valley’s retail focus has shifted east to Sullivan over two decades, Harfield said. In the 1980s, University City Shopping Center was the main attraction.
“U-City was the place to be,” Harfield said. U-City recently has lost many of its stores to bankruptcies and to the Spokane Valley Mall. However, redevelopment plans are under way to revitalize the aging mall.
Best and Kmart were pioneers when they opened stores near Sprague and Sullivan in the early ‘80s, Harfield said.
Sewers were extended to the Sprague and Sullivan area in the mid-1980s, and in the early 1990s, big-box discounters such as Target, ShopKo and Fred Meyer arrived, around the same time those retailers opened stores at NorthPointe Plaza on Spokane’s North Side.
Two other Valley arterials, Argonne and Mullan, had developed as business centers, so the focus for retail was on Sullivan, she said.
The explosive retail growth has created fierce competition among leasing agents who are after the same big-name tenants.
Though representatives of Circuit City and Gart Sports both have said they plan to open stores on Hanson’s property, a preliminary site plan for Metropolitan’s property also shows those stores as tenants.
“We’re going after everyone,” said Carlsen, leasing agent for Hanson. “For over a year now, we have had continuous contact by tenants. We have had a slam-dunk situation, if you will. No one has come to town that hasn’t contacted us.”
BrinJones, retail manager for Metropolitan, agrees that Hanson’s property has an incredible draw because of its freeway visibility and proximity to the mall.
“It’s been a long struggle to pull people away from the Hanson site,” BrinJones said.
Still, he said, some retailers prefer to be next to Wal-Mart because they also offer discount merchandise. Also, some, like Toys ‘R’ Us, want to be able to purchase, not lease, property, he said.
Hanson’s property also is somewhat encumbered by traffic problems, BrinJones said. Further development there hinges on construction of an additional freeway interchange at Evergreen. It is not clear when funding will be available for that project, nor when it will be built.
“There are a lot of retailers that would prefer to be out in front of the Spokane Valley Mall. But as time goes by, by default, they’re going to look elsewhere,” BrinJones said.
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