City's retail 'target' has grown

(Photo by Randy Cauthron) The former Kmart building, across from the Southpark Mall, remains vacant. A retail task force is in place to match properties with retail that will fill a need in the region. [Order this photo]

Its members recently toured buildings vacated when Kmart and Ace Hardware left town. Hy-Vee expanded and moved north on Grand Avenue, making a third "big box" available along Highway 71.

"We just don't want people to think we are just sitting back," said task force member Bill Campbell. "There is a committee of concerned citizens that are out there wanting to (see them in use), and noting that these are buildings are sitting there. We're hearing what people are saying: That they want an option of more than just one big-box store. They want an option of others."

The city had a specific company in mind when it established the "Targeted Retail Task Force" in November 2005. There was hope Minneapolis-based Target would expand to rural northwest Iowa -- Spirit Lake and Estherville also were high-profile suitors for company.

Dean Torreson, Spencer's city manager at the time, recommended an orchestrated effort among city leaders, county leaders and members of the Spencer Chamber of Commerce to attract the store.

"From what I've picked up, it really does come down to the demographics," Torreson said, at the time. "Population, your average income, the buying power of the community in terms of retail sales -- those are things that we have no impact or power over. They are what they are."

In September 2006 Torreson confirmed that the city was maintaining "regular contact" with Menards about marketing a neighboring lot in south Spencer for a Target big box store. Torreson also confirmed at the time that Target officials had been in the community and talked with Menards representatives during their stay. Talks apparently didn't advance past the preliminary stage.

Target officials told the city it was focusing on additional stores or expansions in metropolitan cities for now. The word brought an end to some speculation, but the task force remained intact.

"It went beyond that because we hated putting all of our eggs in one basket," Campbell said. "There are other entities out there."

The city commissioned a retail analysis study to find good fits for the city and region.

"We're confident, knowing the draw of Spencer and knowing there are studies out there that show that Spencer has the number one pull factor of any city in the state, that we can lure some of these types of businesses in -- other than the one big box store that we have now," Campbell said. "We think there's room for others."

Walmart lost a competitor for general merchandise sales when Kmart filed for Chapter 11 bankruptcy in January 2002. The Spencer location, across from the Southpark Mall was closed in July of that year. It reopened as a storage and distribution warehouse, but is now vacated again.

"I think, now, with the old Kmart across from the mall available again, we identified that needs to be retail," Campbell said. "That is what it was built for. That's in an area of retail. That's what it needs to be."

Retail analysis suggests Herberger's, an offshoot of Younkers, was a good match for the city, according to Campbell. Three restaurant chains: Applebee's , Golden Corral and Culver's were a "perfect match," according to the task force member.

"To a couple of the restaurant matches that were on the list, we have already sent out proposals to them," Campbell said. "We believe there is one chain that is already in the works of looking at Spencer, and maybe this (the proposal) will kind of push them over the edge, so to speak."

About 70 percent of the matches on the list were food chains. A couple of sporting goods stores were considered matches. A Payless Shoesource store was once at the Southpark Mall. Campbell's numbers suggest Payless, or other foot apparel stores, were a match.

ShopKo, an anchor store at the Southpark Mall was one of 23 stores to close as part of restructuring in 2001. Campbell said the retailer's return to the city isn't out of the question.

"ShopKo is on the expansion mode," he said. "I went into one of their new prototype stores just a couple of weeks ago. They are in the expansion mode and they have a history of Spencer and that history was good -- even though they did close. There's a little misconception there of why they closed."

The very moment they got the letter that the store was closing, they were negotiating with the mall to expand, according to Campbell.

"That store was doing well," Campbell said. "But, there was a list of ShopKo stores that were closing and somehow Spencer got on that list and it got too far down the pipeline and they couldn't get out of it."

The focus isn't locked exclusively on the large empty buildings on the south end of town. The Spencer Retail Task Force Committee is also looking at the vacated Twetten's Interiors building at 120 East Fifth Street. A subcommittee, led by Kathy Fueston and Curtis Dean is trying to find an occupant for the historic, five-story Tangney Hotel at 605 Grand Avenue.

The empty building tours are part of an effort to establish ways for the city to help market the properties to potential occupants.

"There is a couple of different ways you could go," Dean said. "Everybody would love to see a company like ShopKo decide to come back to Spencer -- or another big box retailer, like a Target or something like that. We don't know if that's in the cards -- that may not be realistic, so one of the ideas we looked at is: Rather than trying to fill up the whole building, like the former Kmart facility, with one business, perhaps a facility like that could be divided into different types of businesses."

Dean said the Spencer Retail Task Force would like to expand the think tank to get suggestions from other members of the community.

"The old Hotel is a great example of how many different ways you could go," Dean said. "That could become a hotel again. It could be a combination of a hotel and private residences. That could become an office facility. It could become a restaurant and a bar, like it used to be, but then some other uses for the other pieces of it. There's just a million different ways you could go with a facility like that."

Anyone with ideas for building uses should contact members of the retail task force. Robyn Larsen at Spencer City Hall is also a good contact.

"Good things tend to happen in groups and I think if we could get movement on one of those facilities, it might break loose the logjam to get some of those other facilities used," Dean said.

THE RIGHT FIT SERIES

PART TWO: THE EMPTY 'BIG BOXES'

BIGGEST DRAWBACK

Big box, giant retailers are tough to attract: Spencer, Estherville and Spirit Lake tried to attract Target to the area in 2005. Talks didn't advance past the preliminary stage because the company wanted to continue development in the larger metropolitan areas where Target already had a presence.

BIGGEST ADVANTAGE

Spencer doesn't necessarily have to land a retail giant. Many of the former big box store buildings could be subdivided to accommodate multiple businesses.

ABOUT THE SERIES

A handful of high-profile retail properties are unoccupied and a group of Spencer citizens are looking for ways to change that. The Spencer Retail Task Force includes 15-20 contributors who hope to bring new stores to town. This series will look at their work as they match available buildings with potential occupants.