Two major retailers with long-term plans to construct new stores in Kalispell’s north side have recently backed out, due to factors including the deteriorating economy and the city’s deliberation over adopting traffic impact fees.
Kohl’s Department store, which was scheduled to begin construction this summer, and PetSmart pet supply store will not be building in Spring Prairie Center, according to its developer Mark Goldberg.
Goldberg said he learned two weeks ago Kohl’s, the anchor retailer for the third phase of his development, wasn’t moving forward. With its departure, other smaller tenants that would only build if there were an anchor store opted out as well. The result is that the entire third phase of the development is essentially shuttered until a new anchor tenant can be located, Goldberg said, and his reaction to the news was succinct: “Disappointment.”
Several reasons led to Kohl’s decision not to come to Kalispell, Goldberg said. Chief among those was Kohl’s recent purchase of 27 Mervyns department stores, a chain that filed for bankruptcy in July of last year and which closed many of its locations. The deal gave Kohl’s the option of opening new stores in bigger markets, and in stores that were already built. The increasingly dismal retail environment, coupled with the acquisition of these new locations, decreased the incentive for Kohl’s to build a new store in Kalispell.
And while Kalispell City Council’s recent vote to adopt transportation impact fees may not have been the chief reason Kohl’s opted out, Goldberg said it played a large role, given that Kohl’s bought the Mervyns locations when debate over the traffic impact fees – and uncertainty over whether the fees would be adopted and their cost – was at its height, adding a big unknown to a decision to open in Kalispell.
“It certainly has a great deal to do with the impact fees,” Goldberg said. “It’s not the only reason, but it’s certainly a very central part of it.”
“We could have executed it last year, but the impact fee thing held everything up,” he added.
Since Kalispell City Council’s March 9 vote to adopt traffic impact fees, which charge developers fees to pay for road improvements necessitated by the increased traffic generated by the new construction, the development community has been taking a wait-and-see approach to assess what the effects of the fees, coupled with the recession, will be on Kalispell’s economy.
Goldberg was among the more than 120 people to put his name on a petition submitted to the city council Monday asking it to reconsider its decision to adopt the traffic impact fees.
Speculation has also been rife that someone in the business community will challenge the impact fee policy in court, though Goldberg said he wasn’t planning such a move at present.
“We’re certainly not preparing a lawsuit at this time, but we are looking at everything there is,” he said. “I think that myself and others who signed that petition would like to see reasonability in these fees.”
As for what happens next for Spring Prairie Center, Goldberg said he is not planning to wait for the economy to improve to begin searching for a replacement for Kohl’s, but instead has begun looking for a new anchor tenant immediately.
“We’re going to work at it urgently, very urgently,” Goldberg said. “We have no choice.”