Super Kmarts on north, south side left in limbo
Redevelopment of commercial centers on Milwaukee’s south and near north sides will be delayed after the anchor retailer for both developments – Kmart Corp. — filed for bankruptcy protection on Jan. 22.
Kmart is hoping to emerge from Chapter 11 in 2003.
The discount chain and local developers are working toward the opening of two Super Kmart locations in Milwaukee. The stores combine a grocery supermarket with Kmart’s typical discount department store offering.
Affected by the retailer’s reorganization will be one project already under construction: a 165,000-square-foot store that will co-tenant a building with Michael’s Arts & Crafts at the intersection of 27th Street and Loomis Avenue.
The project is being developed by Continental Properties of Menomonee Falls. Continental Properties officials did not return phone calls regarding the status of their arrangement with Kmart.
The general contractor for the building is Amcon Corp. of Burnsville, Minn., which also has offices in Waukesha.
Amcon project manager Bill Seemeyer said the firm still has personnel on site. The extended timeline will likely affect the budget.
"My understanding is that we need to have a meeting with Kmart to see what extras they want to approve," Seemeyer said.
Other contractors, including Edgerton Contractors and the Tyler Company, both of Milwaukee, are still on site completing demolition and site work.
North and Fondy on hold
In the planning stages is a Super Kmart on 15 acres at Fond du Lac and North avenues. The 156,000-square-foot store would include 30,000 square feet of leasable retail space.
It is expected that the discounter’s presence would trigger 30,000-40,000 square feet of outlot development. Construction on the project was expected to start this year.
The project is also intended to leverage a recently-completed $4.3 million reconstruction of Fond du Lac Avenue between 19th and 35th streets, and help spur satellite development elsewhere in the near-north-side neighborhood.
While Kmart is using its situation to get out of some leases – including some for now-defunct Builder’s Square stores – Larry Kilduff of the development firm Endeavor Co. said the north-side location is attractive and fits in with the direction Kmart was trying to go before its bankruptcy.
"We had hoped for a spring 2003 or fall 2002 opening," Kilduff said. "That is probably unlikely now. It will probably be more like fall of 2003 or spring of 2004 depending on how long it takes them to come out of Chapter 11."
Despite Kmart’s bankruptcy, Kilduff is confident of the project’s success, stressing the fact that the location would be very attractive to Kmart once it comes out of reorganization – or to other retailers.
"It is a challenge to the project," Kilduff said. "This is the largest retail bankruptcy in history. The reality, though, is that the site that we have assembled with the help of the city and the county is an outstanding retail location. It is probably the finest retail site available in the city of Milwaukee. More than 26% of the population of city lives within three miles of the site."
The closest big-box discount retailer to the Fond du Lac Avenue site would be a new Wal-Mart going up at the former Capitol Court site at 60th Street and Capitol Drive. That’s about 3.5 miles away. Another Wal-Mart occupies a former Builder’s Square facility on East Capitol Drive at Holton Avenue, about 4.5 miles from the Fond du Lac Avenue site.
February 15, 2002 Small Business Times, Milwaukee
