CRE Spotlight: Squeezed in the middle

The Sheboygan area has attracted several new retail developments along the Interstate-43 corridor in recent years. Wal-Mart built two new stores, one opened this year southwest of I-43 and Highway 42 north of Sheboygan and the other opened in 2006 at the southeast corner of Taylor Drive and Washington Avenue (Highway 28) on the south side of town.

Menard Inc. built a new store that opened this year near the Wal-Mart at I-43 and Highway 42.

Back on the south side, the Deer Trace Plaza development, located southwest of I-43 and Highway 28 in the Village of Kohler, brought several new retailers to Sheboygan County, including Target, Pier1 Imports, TJ Maxx, Elder-Beerman, Home Depot and Best Buy.

But in between the booming north and south ends of Sheboygan’s I-43 corridor, the middle of Taylor Drive, once a major retail hub for the area, has struggled.

Memorial Mall, anchored by Kohl’s, Bed Bath & Beyond, Hobby Lobby and Sears, has numerous vacancies. However, the biggest problem is on the other (east) side of Taylor Drive.

The Taylor Heights shopping Center lost its anchor store, Piggly Wiggly, in 2005. It remains vacant. Wal-Mart closed its store next to Taylor Heights when it decided to build the south side store, and later the north side store. A Sentry grocery store near Taylor Heights closed in 2000, less than a year after being opened, and is still vacant.

Despite the loss of those anchors in and around Taylor Heights, most of the smaller stores in the shopping center have hung in there and stayed. However, a Blockbuster video store in Taylor Heights closed and New China 8 Buffet plans to move out of Taylor Heights to a former Hardee’s restaurant at 571 S. Taylor Drive. New China 8 will add a 1,200-square-foot addition to the 3,800-square-foot former Hardee’s building.

Alarmed at the number of retail space vacancies in the Taylor Drive retail corridor, the City of Sheboygan is crafting a master plan to revitalize the portion of Taylor Drive between Kohler Memorial Drive and Indiana Avenue.

“We want to get the word out that space is available on Taylor Drive and city officials are committed to revitalizing the corridor,” said Steve Sokolowski, manager of planning and zoning for the city.

City officials hired Appleton-based consulting firm Omnni Associates Inc. to help them create the master plan for revitalizing the Taylor Drive corridor. Recently, Omnni presented city officials with three “design and development alternatives” for the Taylor Drive District Master Plan. City officials will select one of the three, or create a hybrid with parts of each, and direct Omnni to craft a final master plan.

The focus of Omnni’s three design and development alternatives to revitalize Taylor Drive are:

City officials want to see some of the Taylor Drive corridor preserved naturally, especially parts of the vacant Schuchardt Farm property, located along the west side of Taylor Drive between Erie Avenue and Indiana Avenue. All of Omnni’s recommendations call for some development of the Schuchardt Farm property, but also preservation of much of the site, including wooded areas and the Willow Creek area.

Omnni’s first design and development alternative calls for a park with a festival or event grounds to be created on the Schuchardt property. People using the festival or event grounds could use a small hotel, banquet or conference center built along Indiana Avenue, Omnni says.

The event grounds would provide a community gathering place for weddings or other outdoor events. The hotel would compliment the grounds, but would not be large enough to compete with the Blue Harbor Resort and Conference Center, in which the city has placed a substantial investment, Sanders said.

Omnni’s second recommendation calls for an office park on part of the Schuchardt Farm property. Indiana Avenue could be the gateway to a new development of retail and specialty stores with access to the office park.

The third recommendation is for senior housing development on part of the property, would create a substantial demographic that would attract retailers to serve those residents, Sanders said.

Any development of the Schuchardt Farm property that brings more people to the Taylor Drive area will also help the existing businesses in the corridor attract more customers, Sokolowski said.

“A lot of it would be helped by any type of development on the Schuchardt property,” he said. “I think that is going to be a driving force for that corridor.”

All of the alternatives recommended by Omnni call for mixed-use development on the Taylor Heights site, the former Wal-Mart site and the former Sentry store property. That would likely require the demolition of the existing buildings.

“These types of buildings aren’t as suitable for adaptive re-use as many of the old industrial buildings were,” said Jeffrey Sanders, principal planner for Omnni Associates. “A Wal-Mart store was built to be a discount retail store and unless you attract a similar tenant, it’s hard to convert it for another use.”

Omnni recommends that the existing and largely vacant retail buildings in and around Taylor Heights be replaced by multi-story buildings with retail space on the ground floor.

“You may to do some type of dense development to make it pencil out,” Sokolowski said.

Representatives for the owner of Taylor Heights, Gateway Monroe Inc., and the owner of the former Wal-Mart building, Milwaukee-based Boulder Venture LLC, did not return phone calls seeking comment.

On the west side of Taylor Drive, Omnni is recommending no changes to Memorial Mall, despite the high number of vacant spaces there.

“The owners of the mall (Lakewood, N.J.-based Lexington Realty International LLC) say they are in it for the long haul,” Sanders said. “We are taking them at their word on that.”

A representative for Lexington Realty did not return a phone call seeking comment.

Looking further south on Taylor Drive, outside of the master plan area, a major new development is being proposed. DeForest-based Main Street Builders Inc. is planning to build a 81-room Hampton Inn & Suites hotel on the south end of Taylor Drive.

Mequon

Gateway Plastics Inc., an injection molding firm, plans to expand its 120,000-square-foot headquarters at 5650 W. County Line Road by adding a 162,000-square-foot warehousing addition.

Lakeside Development plans to build 23 row house condominiums, a 14,000-square-foot building with retail space on the first floor and office space on the second floor and a 9,000-square-foot retail building on a 6.5-acre site at 6809-35 W. Mequon Road. The site is located within Mequon’s Town Center area.

Concord Development Co. plans to build an 8,000-square-foot multi-tenant retail building on a one-acre site at 10800 N. Port Washington Road. A vacant building, once occupied by a veterinary clinic, will be torn down.

Town of Somers

Chicago-based First Industrial Realty Trust plans to build an industrial park on a 310-acre site near the northeast corner of Highways S and H in the Town of Somers, just outside of the city of Kenosha and near the Kenosha Regional Airport. “It’s very preliminary,” said First Industrial regional manager Peter Ginn. First Industrial plans to building about five buildings on the site for distribution, office and manufacturing. The buildings would have a total of about 5 million square feet of space. The company plans to purchase the property from Charles Tunkieicz Inc., although that deal has not been finalized yet. First Industrial wants to develop the industrial park to take advantage of the steady growth in Kenosha County, fueled by sprawl from the Chicago area. “We’re still very bullish on Kenosha,” Ginn said.

Town of Yorkville

Racine Motor Sports plans to move out of the city of Racine and build a new Honda motorcycle dealership southwest of Highway 20 and Highway 45 in the Town of Yorkville. Racine Motor Sports would leave its current location at 2005 Lathrop Ave. in Racine.

Brookfield

Artos Engineering Co., a manufacturer of wire processing equipment, is moving its headquarters from Waukesha to 21605 Gateway Ct., Brookfield. The move is expected to be complete by the end of the month. “As we continue to grow, this new state-of-the-art facility will better meet our needs,” said John Olsen, president of Artos Engineering. “Our new location provides Artos the opportunity to follow the ambitious growth plans we have put in place. This facility offers the expandability we require in order to continue to meet our growing customer demands.”

Franklin

City officials recently approved Devo Properties plans to build a pair of multi-tenant retail buildings, a 6,700-square-foot building and a 33,000-square-foot building, west of the Sendik’s store in the Fountains of Franklin development at West Rawson Avenue and South 51st Street. No tenants for the buildings have been announced yet.

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