Cities Are Afraid of The Dark
Feb 1, 2004 12:00 PM, Patricia Kirk
The growing problem of big-box castaways is so widespread that cities are forcing retailers — even before they move into an area — to agree to move-out terms. Ordinances prohibit the owners from shutting down operations until the building is re-tenanted, or demolish it entirely. These “go dark” ordinances could be good or bad for owners, depending on the requirements, notes Mike Wesley, managing principal of the Chicago office of Edgemark Commercial Real Estate. On one hand, requiring retailers to keep the lights on until a box is re-leased could benefit owners — a house occupied is easier to sell than a vacant one — but forcing owners to knock down structures would make it difficult to get financing and result in significant loss of capital associated with the value of the bricks and mortar.
Such ordinances are still few and far between, but as the problem of vacant big boxes grows, more cities are likely to get on the “go dark” ordinance bandwagon. Thompson notes the more aggressive retailers such as Wal-Mart are moving quicker than in the past and are cutting corners on construction materials and finish-out, in anticipation of a shorter stay than the traditional 30 years. The downside is the longer buildings are occupied, the more maintenance and repairs they will require. How the proliferation of inferior buildings will affect future re-use of vacant boxes is an unknown, but it is likely to make more governments sit up and take notice. (For more on redeveloping dead big boxes, see story on page 34.)
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