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Web posted Monday, January 27, 2003

Broker: Stores won't be dark long

By Regan Foster
Alaska Journal of Commerce

photo: local_news

 
The closure of Alaska's five Kmart stores, including the store in South Anchorage, will put some of the state's most valuable real estate on the market.
PHOTO/Regan Foster/AJOC

The announcement that the Kmart Corp. would close all five of its Alaska locations and lay off about 875 full and part-time workers has raised questions as to the future of the existing storefronts, located in Anchorage, Fairbanks, Kenai and Juneau.

Bill Bredsen, an Anchorage real estate broker who was involved in the location selection and sale of all five Alaska Kmart locations, said he was confident that the five stores will not sit empty for long.

"I'm very optimistic about all of the sites, it'll go dark for a bit but not for long," he said. "I've been getting calls about Kmart for six months, now."

The jewel of the Kmarts, he said, is Juneau's 150,000 square foot Super Kmart, punctuated by a 755-capacity parking lot. The lot, as well as the store, was built just off of Egan Drive and on top of filled-in wetlands.

The fill was completely legal, said John MacKinnon, Juneau's interim city manager, and he didn't anticipate any ecological concerns for the next company to lease the 14-acre property.

Bredesen said the Juneau property was purchased by Kmart, built up, sold to a private owner and leased back by the corporation.

He also said the property is some of the best in Juneau, and would only increase in value over time.

"It's a gorgeous, gorgeous site," Bredesen said. "It will be the best shopping center site in Juneau."

But, he added, the site is not strictly limited to shopping possibilities.

"The state of Alaska is always looking for new places to put its office buildings," he said. "It's a very well built building, it's very, very difficult to find real estate that's more than an acre in Juneau, and it's got that enormous parking lot. That's an absolute asset."

Susan Schrader, the past-president of the Juneau Aubudon Society, however, said otherwise.

"We were all quite amazed by the size of the parking lot," she said. "It's truly absurd."

A city ordinance dictated the size of the lot, Schrader said.

"It begs the question of should we examine the city code, when we're filling valuable wetlands to build a parking lot that, even two days before Christmas, is only a quarter full."

The surrounding community, however, has not been concerned about the ecological repercussions. That's according to Debbie Saddler, the director of the Juneau Super Kmart.

Saddler, who joined the Juneau store in June, said she hadn't received a complaint about the location since her arrival, and she didn't know of any prior. That's due to Kmart's environmental policy, she said.

"Kmart must have done what was right to have done," she said. "There were a lot of measures that Kmart went to."

The corporation built a retaining wall between the property and the neighboring wetlands, she said, to minimize the effect development would have on the ecosystem.

"We're environmentally friendly, doing what we can to protect Alaska's resources and wetlands," she said.

She did concede that the parking area might be a bit large.

"It's a huge parking lot," she said with a laugh.

MacKinnon said the jumbo-sized space was built with a vision that had not yet been realized.

"I think they oversized the parking lot with the hopes of putting a retail piece on the opposite side," he said.

MacKinnon added that the city was looking into ways in which to use the property. Among other possibilities, he said, is moving another box store such as Wal-Mart into the location.

"For a community like Juneau to lose a retailer like Kmart is pretty devastating," he said. "It leaves a void there."

MacKinnon noted that suggesting who would fill the space would be premature, since Kmart still has to finalize the closings in bankruptcy court.

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