Economic Development and Real Estate & Retail

Wal-Mart nears deal on city's northwest side: Neighbors hope retail behemoth will revive corridor

January 3, 2005

Wal-Mart Stores Inc. is said to be getting closer to selecting a site in the Lafayette Square area for a SuperCenter, a move retail experts say would be a boost for the struggling commercial corridor.

The world's largest retailer has scouted the area around 38th Street and Lafayette Road for at least a year, but a decision on a site could happen in the next few months, according to several real estate sources.

Unlike the situation surrounding a proposed SuperCenter in Johnson County, community officials and residents in the Lafayette Road/38th Street area are poised to welcome the Arkansas-based retailer-and the smaller retailers that usually follow it-with open arms.

"We think it would be a good fit for the Lafayette Square area," said Susan Blair, president of the Pike Township Residents Association. "We know they bring in a lot of customers. We feel and hope they would bring in people to other businesses in the area."

The retailer probably wouldn't be as welcome in other parts of Pike Township, Blair said, because of land-use issues and some past zoning problems with Wal-Mart's existing Pike Township store on West 86th Street.

However, the Lafayette Road area is already heavily commercial and the roads are designed for heavy traffic flow, she noted. Plus, any minor problems would be worth the boost Wal-Mart could give to the area, she said.

Blair and others said they sympathize with residents of Johnson County who are opposing Wal-Mart's attempt to build a SuperCenter near State Road 135 and Smith Valley Road, an area with more residential development and more restricted access than Lafayette Square.

The Greenwood Plan Commission recently recommended denial of that store, Wal-Mart's second attempt to put a store in the S.R. 135 corridor. The Greenwood Common Council is scheduled to consider the store at a Feb. 21 hearing, said Stephen L. Huddleston, a Franklin attorney representing Wal-Mart at that location.

Near Lafayette Square, speculation on Wal-Mart's preferred location is centering on a handful of sites, including vacant land east of Lafayette Road on the south side of Interstate 65 owned by locally based Centre Properties, and land near Lafayette Square Mall.

Representatives of Wal-Mart and the landowners could not be reached for comment.

Sources said all sites being considered are within the boundaries of the Commercial Revitalization and Enhancement District, created in late 2003 to provide incentives for redevelopment in the area.

Having Wal-Mart locate in the district could be a boon because the CRED designation allows a portion of sales tax generated in the area to be returned to the city for infrastructure and other improvements within the CRED boundaries.

The SuperCenter also could draw other retailers who want to be near the crowds Wal-Mart typically attracts.

"Any new construction in an area is almost always good, especially when it's a 200,000-square-foot retailer who will provide many jobs and bring flocks of people and new life to the area," said Connie Niessink, owner of locally based Niessink Commercial Real Estate.

The area is already home to a Meijer superstore that lies between 38th Street and Pike Plaza Road. But having a Wal-Mart in addition to the Meijer could cause other retailers, many of whom have been fleeing the area for suburban centers to the west and northwest, to take a second look, Niessink and other retail experts said.

The residential areas around the mall are still densely populated and the roads are heavily traveled, but retail experts have said a changing population mix and obsolete retail centers are driving businesses away.

The chief aim of the CRED is to reverse that trend. Several developers have expressed interest in learning more about the state program, and the first project to receive incentives through the CRED was recently approved, said Gordon Hendry, director of economic development for Mayor Bart Peterson.

The approved project will bring a 14-screen movie theater, owned by Bardstown, Ky.-based Republic Theatres, to part of a former Cub Foods building near 38th Street and Lafayette Road. The building's owner was approved to receive tax credits worth about $450,000, or 25 percent of an investment in the building of $1.8 million.

The landlord had asked for credits on investment of $2.2 million, but the state board overseeing the CRED deemed some of that money didn't qualify as eligible investments, said Clint Fultz, a principal in Prime Site Brokers and a member of the partnership that owns the building.

"The state is picky but fair, I thought," Fultz said. The incentives pave the way for the theater to open as soon as late January or early February, he said.

The approved tax credits can be used to offset various types of state tax, including individual or corporate income tax. They also are transferable, meaning a landlord would have the option of working all or a portion of the credits into a lease deal.
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