City officials admit it may be a while before the now-vacant Walmart store building at Hatch and Mitchell roads finds another use.
Friday’s opening of the new Walmart Supercenter at Service and Mitchell roads means yet another vacant store – this one at Ceres’ most travelled and visible intersection.
As a condition of approval when the city approved the new store in September 2011, Walmart agreed to a “Reuse Strategic Plan,” which calls for Walmart to post a $25,000 maintenance bonds to keep the building free from blight as well as incentives for the corporation to quickly find new uses for the old building.
“I think all options are on the table,” said Christopher Hoem, the city’s Community Development Director. “We’re most interested in having it sell for a retail use. We’re looking at anything that will provide amenities or business to our local economy.”
Walmart has not indicated to the city of any potential specific users.
“They have said that they’re working on it and that they had a potential tenant in mind they were working with that has backed out,” said Hoem. “I’m still trying to find out who that is. I don’t know who they’re planning on bringing in and I don’t when but I do know they’re working on it in good faith. It’s an important thing for the city to have that building used for commercial purposes.”
Steve Hallam, the city’s Economic Development Manager, doesn’t think finding a new use will be as difficult as it has been to fill the larger vacant stores on Hatch Road.
“I haven’t gotten the impression that they’re inclined to just sit on it like so many Walmart stores that have closed or other box stores have closed,” said Hallam.
The reuse plan places more pressure on Walmart to re-tenant the building, said Hallam. According to Hallam, the bonds say: “Hey, Walmart, this isn’t just like every other store where you can just walk away and hope for the best on a future tenant. You need to be actively involved in marketing it.”
Before he left, then City Manager Tom Westbrook had suggested that the former Walmart building would be perfect as a membership-only Sam’s Club warehouse.
“From where their other stores are in the Central Valley, I could argue a case,” said Hallam. The nearest Sam’s Clubs are located in Fresno and Sacramento.
The reuse plan indicates that the old Walmart building would provide an excellent opportunity for a big-box user or be subdivided to create smaller spaces. The Mitchell Corridor Specific Plan allows a wide range of office and commercial uses as of right, such as department stores, furniture stores, hardware stores, sporting goods stores, banks, medical clinics, and restaurants. Recreational uses such as a bowling alley or movie theater are also permitted through the Conditional Use Permit (CUP) process.
The goal of the plan is to have the building in a new use within 18 months. But that could be a tall order given the changes in online shopping habits.
The reality is that in the age of Amazon online business, filling large vacant retail spaces has become a difficult task for owners and city officials.
“From an economic development standpoint, large retail space or big box stores seem to be on a holding pattern right now in the current economy,” said Hallam.
Fresh in their mind is the example of how the closed Kmart store was unable to attract a new retailer after three years of collecting cobwebs. A developer recently won approval to turn the old Kmart into a Public Storage while adding new business skirted around the property that includes a new Quik Stop, Dutch Bros coffee shop and Raising Cane’s Chicken and potentially a new quick lube service.
Many in Ceres have clamored for recreational businesses which could fit inside the old Walmart building. Converting the building into a bowling alley and arcade might prove economically impossible given that the Ten Pin Fun Center opened in north Turlock just six miles away. The Turlock facility was approved in 2010 but didn’t open until 2019 because of funding difficulties.
Hallam said in his eight years with the city he’s never been approached by anyone interested in opening a recreational facility or movie theater in Ceres.
In 2011, some expressed concerns that Walmart will not allow competitors like Target or WinCo to use its building. Walmart representative Amelia Neufeld said selling the building to competitors would present an unfair advantage against Walmart.
“We don’t feel believe we should be obligated to subsidize our competitors’ entry in the marketplace,” said Neufeld. “Our current store and the land it sits on is worth millions of dollars and utilizing our existing building at a much lower cost than having a ground-up development would offer them an unfair competitive advantage.”
Mike Lyions, the city attorney at the time said the city could not legally force Walmart to offer the building to direct competitors like Target, warehouse clubs, pharmacies, and grocery stores (such as Raley’s, Food 4 Less, and Save Mart).
A decade ago Walmart store representatives pointed out that nationwide vacated stores have been filled by such companies as Kohl’s, Petco, OSH, Ross, Pier 1 Imports, PetSmart, Sears, Lowe’s, Dick’s Sporting Goods, Bed Bath & Beyond, Hobby Lobby, Marshalls, Macy’s, Office Depot, Fry’s, Jo-Ann, BevMo!, Dillards, T.J. Maxx and Cost Plus World Market.