What’s Up with Walmart?
The topic of the month seems to be what should be done with the Walmart site. I’m hoping that this piece can shed light on the situation. To start, some history may be relevant.
When Donna and I moved to St. Anthony in 1989, the Apache Plaza shopping center was attempting to rebound from a tornado. Residents who have lived here longer than I have can give more color, but I remember that anchor tenants included Herberger’s, JCPenney, and Montgomery Ward.
Over the next few years, the retailers gravitated towards Rosedale, which is understandable given the larger mall offered easy access to 35W and Highway 36. In hindsight, Apache Plaza’s fate was inevitable. The project deteriorated to a blight stage. I recall City Pages putting Apache on the list of “the 10 worst places to get dumped.”
Redevelopment efforts began in the mid-1990s. Apache was then owned by U.S. Bank via foreclosure. Knox Lumber was a suitor at one point, as well as Liberty Check company, which would have required a rezoning to light industrial and semi storage on the site. Kudos for the city council in 2000 for denying that request.
The city then played a unique role by assembling several small parcels nearby Apache. Thus, it had a bigger stake at the table than in most redevelopment situations. Around 2001–2002, 4 developers responded to requests for proposals (Centex, Sherman, Opus, and Pratt/Ordway). Pratt/ Ordway was selected as the master developer, with Dominium to build multifamily housing and Doran Companies to build retail. Pratt/Ordway was to build the cottages and the condominiums. The entire project was named Silver Lake Village.
The plan evolved, and in 2002–2003 the city council was told the project needed a big box economic engine for it to succeed and Walmart was to be the likely tenant. Eventually, Walmart signed a ground lease with Doran Companies with the expiration date of 2025. Walmart’s investment into the site by committing to this long-term lease and paying for the vertical costs were both significant contributions to Silver Lake Village.
Silver Lake Village initially thrived. The project won awards for walkability, design and innovation. Two condominium buildings were built, with plans for two more, until the housing crisis in 2008 put a halt to further development. We were left with 90,000 square feet of retail, the Landings apartment project, the Cottages, and the Walmart. Later, Dominium would build a senior affordable multifamily project instead of phase II of the condominiums.
Despite the change in product, the project was considered successful. Doran Companies sold its retail portion to Inland Real Estate, who then sold the entire company to IRC Retail Centers, the current owner.
Meanwhile, despite solid sales, Walmart closed doors, opening a new location in Roseville in April 2014. I have not seen the lease but have been told that as of April 2017, Walmart had control of the property. IRC is now in a position to cancel the lease, but doing so would eliminate lease payments from Walmart. Common sense says that IRC will likely not cut ties with Walmart until they secure a better offer for the site.
Having said this, I think that IRC will need to balance the success of the other tenants with whatever is backfilled into the Walmart space. One the plus side, the property is assessed at just under $13,000,000 (equivalent of 52 $250,000 single family homes) and has a lot of potential.
What is the city supposed to do?
The city has very limited resources to enhance vitality in the Silver Lake Village site. Discussion surrounding our new comprehensive plan may include the option of more multifamily housing in Walmart’s place. I think it makes sense in that there are already great amenities: access to public transportation, Salo Park, Silverwood, and Cub. Weaving workforce housing within this hypothetical project would also be an option. More “rooftops” would help support surrounding retail. Walmart’s sea of parking can also be put to better use.
What does not make sense is for the city to provide significant monetary assistance to the Silver Lake Village. It is not wise or even possible to invest tax dollars directly in a project such as this in order to create or manipulate a market for the city’s (and developer’s) benefit. IRC has incentive to create value—that is their business, and my discussions with them indicate just that. It is not the city’s role to procure a future tenant. Rather, it is the city’s job to ensure that the appropriate zoning in place for the highest and best use of the property as prescribed in the city’s zoning code of allowed uses. The city needs to approach the situation from a mentality of “we zone, not own.”
I am confident that this space will thrive in the future. The first-tier suburb location is highly desirable. IRC has a vested interest in repositioning/retenanting the site and the market will largely dictate its future. As a community, we need to be patient and realize our limitations. We all look forward to the day when we can refer to the area as “the site, formerly known as the vacant Walmart.”