As Retailers Leave, What To Do With Empty Space?

Dec 14, 2018

Illinois continues to see big box stores close. That means lost jobs, less tax revenue and often empty store space.

Still, Joe Fackel – with the Canvass Group – says he’s optimistic about the future of retail. The city of Springfield recently hired his firm to look at vacant shopping space in the capital city.

NPR Illinois talked with Fackel about the retail trends he’s seeing.

Below is a lightly edited transcript.

NPR Illinois: What’s the problem you’re trying to solve?

You pick up a newspaper, you hop on any news website any day of the week, [and] you see stories like Toys R Us shuttering hundreds and hundreds of locations. You see Kmart and Sears closing. And so that creates concern for city leaders who rely on those retailers to drive local option sales tax. So, from an economic development standpoint, retail is critically important to the city of Springfield and every other city in Illinois that lives and dies on local option sales tax. And so what we're trying to do is look at the market objectively, honestly, and identify sites and opportunities where we think there's development or redevelopment possibilities.

What are some of the challenges that you see here in Springfield in terms of retail space?

Well, the challenge for every city in the Midwest is perception. The perception that you've got declining population bases, you've got people leaving in droves. And those perceptions, more often than not, are not based in any kind of reality. So you're competing with not only Peoria right down the road or St. Louis, you're also competing with rapidly growing cities in the Sun Belt. Retailers see [those cities] and they know that those high growth markets represent really good opportunities to expand their operations. That doesn't mean that Springfield is not a great place to locate. It just means that you've got a you got to sell it a little bit harder, and it might take a little bit longer to have those retailers see the light.

When you visited Springfield, around that time, Kmart announced that it was closing its store on Clear Lake Avenue. What do you see as the potential future for a building like that?

There's no single tenant that's going to backfill a vacant Kmart. At least I haven't seen one that is retail, that's generating sales tax and property tax. You know, the cold hard reality of that is there are vacant Kmart boxes littering the countryside, and some of them have been vacant for 30 years. So, it takes an enterprising property owner or developer. It’s likely going to take public participation to finance the redevelopment of that in some form or fashion, and it's going to take a couple of retail or several retail tenants that find that site attractive in order to re-tenant that.

What do you expect to see in Springfield in the next five years?

The retailers that are really growing and expanding today are in the restaurant space, the fast casual restaurant players. I think those are going to continue to grow, and a lot of those are not in Springfield ye. But they will be I think the low-hanging fruit is on the on the on the restaurant side.

If you look at White Oak’s Mall, what a lot of traditional enclosed regional malls have done - I don't know whether or not this is in the plans for White Oaks - adding a housing component. If you look at a lot of shopping centers on the west coast, you'll see multi-family developments literally connected to a shopping mall.

I think the fact that the health care in and around Springfield, especially downtown, how that’s growing and expanding. You’re going to see young professional wanting to move in, live downtown, shop downtown, work downtown. And in order to facilitate that development, you’ve got to have amenities. And at the end of the day brick-and-mortar retail is an amenity.

But those are some of the things that we're seeing. There's a lot positive that's going to happen. Once this kind of retail correction is over and people are really looking to expand rapidly, I think Springfield's going to be a good place to land.