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Building Retail Relationships

One Moment of  Confidence can Change Fears to Strengths

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Renovated center fills 'black hole'
Northern Nevada Business Weekly
John Seelmeyer, 6/6/2005

A Reno shopping center that was in trouble a year ago is nearing completion of a multi-million dollar facelift and a leasing campaign that’s filled its vacancies.

The center at Kietzke and Peckham lanes was nearly dark two years ago after Kmart moved out, leaving only Jo-Ann Fabric & Crafts, King Buffet and a service station at the high-profile center. Within about 90 days, however, the center renamed Peckham Square should be vibrant again as Grocery Outlet, Import Warehouse and Furniture Expo and Savers open new stores.

They’ll join Harbor Freight, which opened in the center in 2004, and a spa and backyard retailer is soon to follow.

“Blowing life back into these boxes is a critical part of keeping the southeast part of Reno alive,” says John Mulder of Premier Realty, who brokered the center’s new leases. “The neighborhood is starting to pick back up.”

While developers and property owners often shy away from redevelopment projects, Mulder says the potential returns warrant a second look.

“They’re good profit centers if you look at them the right way,” he says.

The Kmart building, a concrete tilt-structure built in the early 1970s, is being divided into five retail spaces by general contractor Groves Fischer Inc. of Sparks. The building’s depth — 210 feet — presented a challenge as Mulder worked on leasing.

Retailers, he explains, usually want as much frontage as they can get. They’re not interested in spaces that are deep. He resolved part of the problem with a wraparound design on the building’s south end.

The 5,000-square-foot spa and backyard store will be tucked into a corner, and an L shaped, 26,000-square-foot Savers store will wrap around it. The tenant mix put together by Mulder is heavy on destination retailers — the sort of stores that can stand on their own without relying on other traffic.

The Savers location, for instance, will be the second outpost in the Truckee Meadows for the 200-store chain. It partners with nonprofits in the region to buy and sell donated merchandise.

The company does best in locations where it can draw middle and upper-income customers, says Robert Coron, its Assistant Director of Real Estate, and Savers was looking for a lease in south Reno.

He described the company’s customers as “moms with kids.” “Our stores are treasure hunts,” Coron says. “People go with the anticipation of finding something they didn’t expect.” A similar motivation typically draws shoppers to Grocery Outlet, another of the new stores in the center.

The grocer draws a middle to upper-income customer who likes the thrill of the chase for bargains in close-out and manufacturers overstocks. Import Warehouse and Furniture Expo likes the center’s high traffic counts — 120,000 vehicles a day on Highway 395 behind the center, 9,000 a day on Kietzke Lane in the front — for its store selling imported furniture and electronics.

“It’s all location,” says owner Scott Reid, who also plans a café in the store.

The Jo-Ann Fabric and Harbor Freight stores, meanwhile, serve as what Mulder calls toy stores for grownups that stand on their own as destination retailers. He said the property owners also may build about 12,000 square feet of pad space along the Peckham Lane side of the property.

Already, Mulder says, the renovation cost has reached $3.5 million, with another $500,000 or so expected before the project is completed this summer.

That work, he says, included a new roof, new wiring and new plumbing along with interior remodeling and a new façade. At the same time that he was leasing the Peckham Square space, Mulder was finding a new tenant for the former Premiere Home Furnishings location at Kirman and Plumb. Resco Restaurant Equipment & Supply Co. purchased and now occupies the space.

“I like filling in the black holes,” Mulder says.