Sears’ Future Is Cloudy

0

SearsSale_051116_front pageLast July, the Sears store on Broadway in Hicksville was sold to Seritage Growth Properties (SGP), a real estate investment trust and spinoff of Sears Holdings, Inc. With the ailing retailer facing an uncertain future, SGP is seeking to maximize the real estate potential of its 266 Sears/K-Mart properties. Recently, SGP representatives met with a select group of Hicksville residents to present very preliminary plans for the property. A report about the meeting was made to the Hicksville Community Council on May 5. 

Community Hears Of Possible Plans At Sears Property

In the not too distant future, travelers on Broadway will see, where the Hicksville Sears now stands, an entirely new vista. There will be a high-end supermarket, retail shops, a promenade and most dramatically, a two-story apartment complex with up to 350 units.

Perhaps.

“It’s still very preliminary,” warned Harry Single, president of the Hicksville Community Council at its May 5 meeting.

Attendees had just heard from Tom Pfeifer of the Midland Civic Association, one of the groups represented at the monthly meeting. Pfeifer, along with Single, had been one of several people invited to meet with the property’s corporate owner to hear about the plans.

“They showed us photo [renderings]. It looks very nice,” Pfeifer related. “They’re really maximizing all the possible uses of that property. They brought to us an initial idea [and told us] ‘We want to bounce it off you guys and see what you think.’ It will affect water, fire, schools…I don’t know what impact it will have on taxes. It’s still too early to tell.”

Louise LaGatta makes a point about the existing traffic problems in the area around the Hicksville Sears store, while Mary Garone, behind her, waits her turn to speak at the Hicksville Community Council meeting on May 5. Both speakers foresaw even worse congestion if the plans proposed by the owners of the Sears property came to pass. (Photo by Frank Rizzo)
Louise LaGatta makes a point about the existing traffic problems in the area around the Hicksville Sears store, while Mary Garone, behind her, waits her turn to speak at the Hicksville Community Council meeting on May 5. Both speakers foresaw even worse congestion if the plans proposed by the owners of the Sears property came to pass. (Photo by Frank Rizzo)

Single said, “They’re talking about high-end apartments. Young people would be able to live here and commute to the city.”

He added that another idea floated was a shuttle service to the train station for apartment dwellers, eliminating the need for more parking spaces at that already crowded area.

Reportedly, current tenants TD Bank and Chipotle’s will remain as part of the 26.4-acre property.

“They haven’t approached the town,” said Pfeifer. “My feeling is that they are a little nervous about announcing these plans. Sears is still going to be open for some time.”

“It’s probably still a year or two down the road,” Single agreed.

Resident Louise LaGatta didn’t like what she had heard. “Didn’t anybody think of the traffic situation?” she wondered. “You have 350 apartments. Someone in each is going to have a car. Traffic is going to be horrendous.”

Chimed in Mary Garone, “We have all the trucks on Broadway, and coming through all the little side streets…it’s terrible.”

“It’s so congested already in that area,” Garone told the News after the meeting, adding that no, she does not shop at Sears anymore—and neither does LaGatta.

The loss of a once faithful and plentiful consumer base and changing shopping patterns has ravaged what was for many decades the country’s largest retailer, a former member of the elite 30 companies that make up the Dow Jones Industrials (it was dropped in November 1999).

According to what the owners indicated, the 156,000-square-foot department store, erected in 1964, will be razed. The Sears Auto location next to the store will also be knocked down.

Change In Ownership

Last July, Sears Holdings, Inc. spun off a real estate investment trust named Seritage Growth Properties and sold to it more than 260 Sears and K-Mart stores, translating into about 40 million square feet. The Hicksville store was one of them.

In a televised interview, Seritage CEO Benjamin Schall told REIT.com that half of the company’s properties “are very valuable free-standing sites. Demand from retailers [looking to lease] has been very strong and what we’re looking to do is to tap into that demand…to unlock the underlying value of our real estate portfolio.”

He went on to say that Seritage has the right “to downsize Sears [stores] up to 50 percent at each of our 266 sites, which allows us to take single-tenant buildings leased by Sears at about $4 per square foot and convert them into multi-tenant shopping centers at significantly higher rents.”

Seritage made news last December when fabled investor Warren Buffet bought an 8 percent stake in the company.

In an emailed statement to the News, a Seritage spokesman wrote: “While we are unable to share specifics at this time, we aim to transform the property into a highly productive destination that adds value to the community. We look forward to sharing our plan in the near future.”

Single has invited Seritage reps to the next meeting on June 2. He hasn’t yet heard back from them.

Meanwhile, at the May 5 meeting, residents continued to express concerns about the traffic such a planned development would bring.

“Before everybody gets all upset about this, it’s all very preliminary,” said Pfeifer, who went on to remind the crowd about the meetings associated with the Hicksville Downtown Revitalization Plan—and how long they’ve been ongoing without any evident progress.

“And now something like this [can potentially] happen,” stated Pfeifer. “Compared to putting in a Starbucks or Chick-Fil-A [at the Broadway Mall] this is a [big] change in Hicksville.”

On that, everybody at the meeting could agree.

Leave a Reply