On February 12, 2008, Sprawl-Busters reported that a company called U.S. Properties Group (USPG) was busy buying up dead Wal-Marts, this time a 99,364 s.f.store in Collinsville, Illinois. Wal-Mart had 15 dead stores for sale in Illinois at the time — not counting Collinsville. The Wal-Mart discount store in Collinsville was shut down in June of 2007, when the company received permission from the city to build a supercenter. The 204,000 s.f. Wal-Mart Supercenter opened at the 53-acre Collinsville Crossing retail development. USPG says it is not recycling these empty stores, but “upcyling” them instead. USPG owns, manages and develops shopping centers in ten states, and has brought numerous big-box retailers to dead stores. This is the company’s first venture in Illinois. “They have a good reputation of bringing in tenants,” the Collinsville Community Development Director told the News Democrat. “The typical life span for a Wal-Mart to be on the market is a year-and-a-half, so we’re way ahead of schedule.” A spokesman for USPG referred to the Wal-Mart store as a “ghost box.” This week, the Belleville News-Democrat announced that a Kohl’s department store will be the tenant at the old Wal-Mart site. The Collinsville City Council has to vote on September 22nd on the site plan, which has already been OK’d by the Planning Commission. It turns out that the ‘old’ Wal-Mart store was not recycled at all — it was torn down to the ground, and a new building will be erected — a new 93,000 s.f. store plus parking lot for Kohl’s. Another 6,000-s.f. area has been created for a second potential retailer. Kohl’s will lease the space from U.S. Properties Group. It could open before the end of next year. This retail musical chairs has excited local officials, who were thrilled to see the Wal-Mart store torn down after nearly a year and a half of sitting empty. “It’s a home run for the city,” the Community Development Director told the newspaper. “No doubt about it. It’s a home run for Belt Line Road.” The city proudly added that it is not giving USPG or Kohl’s any tax incentives for filling the old space. “Everything takes time,” the Director said, “but in general, the time it took till we could fill that site after Wal-Mart left was quick. This was record timing. It’s usually three to four years. This took a year, a year-and-a-half. We are able to secure new business in there in record time. We were beating the bushes and being proactive.” The Community Development Director said Kohl’s will be “a catalyst for future interest in Belt Line. There is a lot of excitement and a lot of interest by potential developers and retailers.”
To USPG, “upcycling” means the company leverages its relationships with retailers to revitalize communities by renovating dead stores. “We get real estate off the books,” the company’s vice president of leasing told the newspaper. “We get it back to productivity as fast as we can because we don’t make any money until we do it. It’s a pretty simple business model.” People in this part of Illinois are familiar with ‘ghost boxes.’ Another Wal-Mart was emptied out in Belleville, Illinois. That 126,486 s.f. store is still listed as available for lease by Wal-Mart Realty. The empty Wal-Mart in Belleville was built in 1993 — so its only 15 years old. It is wasting 12 acres of land. Officials in Collinsville think they hit a home run compared to what has happened in Belleville. The process of building and abandoning stores has reached unprecedented heights with Wal-Mart. No other retailer in the history of America has ever built and then left so many actively productive stores. Wal-Mart has been criticized for the environmentally reckless business plan it began in the mid 1990s, when the company began replacing perfectly useable discount with a larger format superstore. The format change was made simply because supercenters generate more customer traffic and profit — not because the discount stores were failing. This paradigm shift has resulted in the closure of more than 1,000 discount stores since 1995 — one of the most wasteful uses of land ever seen in the commercial sector. Wall Street analysts have criticized the company for carrying all these dark stores on their books. In recent years, Wal-Mart has made a super effort to dump these stores — even giving them away or selling them at low, everyday prices. At its high point, Wal-Mart Realty was trying to dispose of as many as 350 dead stores. Today, the total stands around 200. At least one-third of these stores are over 100,000 s.f., and many remain on the market for three years or longer. USPG is basically acting as a real estate bottom-feeder, buying up abandoned stores at an everyday low price, and remarketing them. The problem is, many retailers don’t want someone else’s abandoned floor plan. But USPG says it has sold stores to Target, Kohl’s and other companies looking to avoid the lengthy development process, and just find a turnkey location. The fact remains, some empty Wal-Marts have become such a blight, that the deteriorated stores had to be torn down — usually at the expense of local taxpayers. Tens of thousands of acres have been blacktopped for the temporary occupancy of Wal-Mart. The retailer has demonstrated that it arrives in a new community with its bags already packed. For earlier stories, search Newsflash by “dark stores.” Readers are urged to contact Collinsville Mayor John Miller at: [email protected] with the following message: “Dear Mayor Miller, Your vote to accept the Kohl’s site plan for the old Wal-Mart site is a fait accompli. But this is no ‘home run’ for Collinsville, as your Community Development Director has described it. Step back and look at what has happened: A Wal-Mart store closed, and a bigger one was built. The bigger one takes more sales and jobs from Collinsville merchants than the smaller one did. The smaller store will now be torn down, and another national chain store constructed. It will share some sales with the new Wal-Mart — but most of its sales will come also from smaller existing merchants in the trade area. Is this really economic development? All this ‘home run’ has done is solidified the base of national chain stores, to the displacement of local businesses. All this new national retail space does not change the fact that Collinsville only has a population of 25,893 people as of 2007 — that’s only 3,447 people higher than your population 17 years ago in 1990. The city has been adding only 202 people a year to your consumer base. Dramatic expansion of retail supply is not only not necessary, it cannibalizes the merchants you already have. Having a Wal-Mart and a Kohl’s is not hitting a ‘home run.’ For many local merchants, it’s a strike out. If you vote to approve the Kohl’s project, just understand that you can fill an empty building, and create two more empty ones at the same time.”
