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Kmart SuperCenter Waco (past)

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Stores Closed During Bankruptcy

Levcor, INC. has bought the Waco Kmart SuperCenter and is splitting it up into a multi-tenent shopping center. As of 10/3/04, they were seen tearing stuff out of the building and pileing it onto a trailor. So, We will see what happens.
 

Waco, Texas Buiness update CLICK HERE

Business

7/18/04 Changes in Waco retail market a boom for some, challenge for others

By MIKE COPELAND Tribune-Herald business editor

Jaime Colon, the manager of Waco's new Belk store, watches and waits. Business is "pretty good," says Colon, but he expects much more. He believes the shopping center where Belk sells merchandise with names like Polo and Tommy Hilfiger is about to explode.

"This absolutely is going to be a great center," says Colon. "Best Buy is under construction; the second phase is taking shape. By next spring, this place is going to be booming."

He's talking about Central Texas Marketplace, the new kid on Waco's retailing block. Belk, Kohl's, Oshman's and several other retailers do business there already, but more stores are coming. Counting restaurants, the center at I-35 and West Loop 340 could approach 1 million square feet.

The marketplace is the "known" factor in Waco's retail scene.

The unknown resides at Franklin Avenue and New Road, and looks suspiciously like an old Kmart. Levcor Inc., of Houston, has bought the building and is heavily courting Academy Sports & Outdoors. It would like to place three large tenants in that 200,000-square-foot box.

To say retail activity in Waco is hot would be an understatement.

But some wonder if Waco can handle the boom without fallout, without the loss of stores that can't compete. SteinMart closed its clothing store on Waco Drive, blaming poor performance; and CompUSA recently shuttered its computer store in Franklin Village.

What about the potential battle between Oshman's and Academy, two sporting goods chains?

Jeff Rouzie, leasing agent for the marketplace, says he believes both can survive and thrive.

"I think Waco certainly can support two fine sporting goods stores," said Rouzie, speaking by telephone. "People in Texas, like the people here in Alabama, like their guns and like their rods and reels."

Some retailers worry that Waco's retail pie is being sliced into too many pieces, and that all stores will suffer.

Rouzie, though, believes the marketplace is enlarging the Waco market.

"Merchants have told us they are getting a lot of regional traffic and shoppers into Waco, which is exactly what we had hoped for," he said. "When it fills out, I think the marketplace will become a real focal point, a place to go and spend the day."

A brochure AIG Baker prepared to tout the marketplace says the primary trade area, McLennan County, will have a population of 263,862 by the year 2007. But it also says the marketplace is not content with drawing only from McLennan County. Developers see it drawing from a population pool of several counties that will grow to 648,192 in three years.

Jon Spelman, a Waco real estate agent who sold land to AIG Baker, said the marketplace "was a $70 million dice roll." AIG Baker was betting it could put together a retail package that people outside Waco would check out. So far, so good, said Spelman.

"(AIG Baker) has done ZIP code analysis, and though it is very preliminary, it is showing that shoppers are coming from an expanded trade area," said Spelman. He believes the center will attract more traffic when the new I-35/West Loop 340 frontage road is complete.

The Texas Department of Transportation expects a finished product by year's end, said spokesman Ken Roberts.

By becoming a regional draw, the marketplace won't necessarily siphon shoppers away from Richland Mall. Still, the marketplace has stolen a prime tenant from the mall in Old Navy; and electronics giant Best Buy is leaving a site near the mall to build near the marketplace.

Strip centers like the marketplace "are the more popular format today," says David Szymanski, director of Texas A&M University's center for retailing studies. "The idea is giving customers easy access, no longer having them walk through the whole mall to find a store."

Richland Mall is not taking the marketplace's arrival lying down. It has launched an advertising campaign "that says we're one huge, air-conditioned shopping center all under one roof," says mall manager Kandace Menning.

As for the store makeup of the mall, she says, "we have as much variety as they do."

The marketplace is not a finished product, so several sources say it is too early to pass judgment on it. Not a single restaurant has opened, though several are planned. The second phase will have a Books-A-Million bookstore and at least one other "lifestyle" retailer, Rouzie said.

Most store managers at the marketplace say company policy forbids them from commenting on sales.

"Traffic keeps increasing little by little," says Belk's Colon. "We're anxiously awaiting some of the dining places, and think they will increase traffic to the center. Some people still don't know a lot about us (Belk), that we carry some of the better brands. We're concentrating on providing great service, hoping customers come back when we're completed 100 percent."

Amanda Earl, part-time manager at Dressbarn, said the store managers she speaks with are pleased with the marketplace.

"We need more restaurants and more public restrooms; we have a lot of customers asking about both," says Earl. "Around noon it gets real dead around here because people are leaving for lunch."

Sales tax rebates to the city of Waco show an increase in retail spending during the first few months of 2004, either because of the marketplace's arrival or a generally improving economy. For example, the city in May received a rebate of $2.52 million from the State Comptroller's Office, which is 13.9 percent more than the rebate it received in May of last year.

That's significant because May rebates reflect sales in March, which is when the first stores began opening in the marketplace. In June, Waco's rebate again was higher, but only by 2.3 percent from June of 2003.

June Skerik, Waco's program manager for budget and audit, says she's cautiously optimistic about the impact of the marketplace.

"I think it's going to be good for Waco. It has wonderful stores and a great location," she said. "But it's kind of like election returns: too early to tell." She said she'll know more about its impact on sales tax revenues after its first Christmas and after it is fully developed.

Elsewhere, shopping centers are dealing with losses and vacancies. At Brazos Place Center on Waco Drive, SteinMart and Benny's Bagels have closed, while Blockbuster Video has moved to a new location. Center owner Kenneth Young is trying to fill the holes.

"If he can't find an immediate tenant for the Blockbuster space, he'll knock it down. That would be a premier location for a restaurant," said Spelman, adding: "Kenneth has done an excellent job of tenant selection over the years. He has not lowered his standards due to vacancies."

Across town at Bosque Boulevard and Wooded Acres Drive,, the small shops around Target Greatland and Dunlaps are gradually filling. New tenants include The Cash Store and Smarty Pants, which are hosting grand-openings, and Pizza Patron, which is coming soon.

"We're about to go to lease on four other deals," says Andrew Scroggie, a leasing agent with Venture Commercial in San Antonio. When those deals are signed, said Scroggie, he'll have about 45,000 square feet still available around Target and Dunlaps.

Franklin Village, located at Franklin Avenue and New Road, lost its Pier 1 Imports store to the marketplace and recently saw CompUSA close.

But the shopping center remains anchored by Goody's Family Clothing, which reportedly is doing well.

"You hate to see anybody move because the more the merrier, but (the relocations and closings) really haven't deterred us any," said Donna Humphrey, the acting manager at Goody's. "We have a real good following, even people from Austin and Dallas who like our prices and quality of merchandise. We don't put Goody's in metro areas, so they don't have a Goody's."

As for stores in the marketplace, "Everybody goes out there and tries them, but they come back to us."

Mike Copeland can be reached at 757-5736 or at mcopeland@wacotrib.com.

 

6/30/04 Houston retail developer working to get Academy in Waco

By MIKE COPELAND Tribune-Herald business editor

Academy Sports & Outdoors, the sporting goods chain, may occupy part of Waco's vacant Kmart building, according to promotional material being circulated by a Houston company that hopes to buy the building.

Levcor Inc. of Houston is talking with Academy about taking space in the old Kmart at Franklin Avenue and New Road, said Scott Gordon, a leasing and sales associate with Levcor, during a telephone interview on Tuesday.

"It is not a finalized deal, though," Gordon said.

The deal may be pending, but that has not stopped Levcor from mailing promotional material mentioning Academy to real estate agents, soliciting their help in finding tenants for the building. A map shows Academy occupying 64,000 square feet in the side of the vacant Kmart nearest Waco Drive. It shows 63,086 square feet for a tenant on the side near Franklin Avenue, and 60,034 square feet for a tenant in the middle.

Academy is the only retailer identified on the map. An accompanying data sheet identifies Academy Sports as a tenant.

"That's just a site plan," said Gordon, who added that Levcor would like to place three to five retailers inside the vacant Kmart. Levcor also envisions placing a small retail shop and two restaurants on the parking lot.

Levcor, formed in 1980, typically focuses on developing retail centers 50,000 to 500,000 square feet in size. Most of its shopping centers are in Houston, Gordon said, but it has signed contracts to buy vacant Kmart buildings in Waco, San Antonio and Sherman.

The company liked the Kmart in Waco because of its frontage on Franklin Avenue and New Road, and its proximity to Waco Drive, Gordon said. Wal-Mart, Lowe's, Petsmart and Goody's Family Clothing are among the companies that do business on corners near the vacant building.

Bland Cromwell with Coldwell Banker Jim Stewart Realtors said his office received a copy of the promotional material Levcor is circulating.

"That's standard procedure for developers, soliciting help from experts in the market," Cromwell said. "Certainly the building is in our market, and we'll do everything we can to help them fill it."

Real estate agents who secure prospects for developments such as this are compensated, usually by commission.

Cromwell said he understands that Levcor has not yet closed on its purchase of Waco's Kmart building. Gordon said that is correct.

"I believe Levcor is going to close on the property and that Academy is probably going into that location, from what I understand from my sources," Cromwell said. "Academy would be a start, and there should be a lot of folks wanting to be in the same building with them."

Mike Copeland can be reached at 757-5736 or at mcopeland@wacotrib.com.