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What's the future of empty big-box stores? F-M will soon have vacant spaces equal to 10 football fields

FARGO - On the tile floor of what was once a home-improvement store here is a 120-foot-long area covered with netting where baseball players can replicate throwing from about second base to home plate.Mike Skogen, owner of the Ball Yard indoor pr...

Former Sam’s Club store in Moorhead
Former Sam’s Club store in Moorhead. Michael Vosburg / Forum Photo Editor

FARGO - On the tile floor of what was once a home-improvement store here is a 120-foot-long area covered with netting where baseball players can replicate throwing from about second base to home plate.

Mike Skogen, owner of the Ball Yard indoor practice facility, said he managed to squeeze into the 16,000-square-foot space another 11 practice cages for pitching and batting, three with pitching simulators.

When the former F-M RedHawks assistant coach was planning to expand his business in 2016 from an industrial space with only enough room for four cages, he said the old Menards near Interstate 29 and West Acres proved to be just about perfect in terms of rent and space available.

"We needed a big open-space building," he said of the structure that also houses Savers thrift store. "At the time it was kind of the only one that was available."

All he had to do was hang up his nets and roll out the turf, he said.


What Skogen's done is an example of how big retail spaces can be repurposed when the supply of such spaces exceed demand.

That's something Fargo-Moorhead will likely see more of over the next several months. Already, Gander Mountain, a portion of Sears, a Sam's Club, a former grocery store in Southmoor Plaza and a Family Fare are vacant. Toys R Us, both Herberger's stores and the current Best Buy building are expected to soon join them; Best Buy is moving into a portion of Sears.

Altogether, that's about 549,000 square feet of space, a little more than half the size of West Acres mall, going dark. Put another way, it's just shy of 10 football fields in total vacant space.

While demand for small and medium retail spaces is strong, that's not at all true of big retail spaces, according to Rick Flacksbarth, a Realtor with Cityscapes Development and listing agent for the former Gander Mountain building. "As commercial realtors, we have to get creative. We have to go find people that can take and repurpose a building perhaps not for retail use. That's always a challenge, especially in a market our size."

But don't expect repurposing to happen quickly.

"The vacancy rates always run higher in commercial and industrial than, say, apartments, and part of that is the users all have different requirements," said Kevin Swann of Swann Real Estate. "It just takes more time."

Vast spaces

Fargo-Moorhead isn't alone in this apparent glut of retail space.


Nationwide, Sears and other department stores have announced hundreds of store closures since the beginning of 2017, the year Google Trends says the term "retail apocalypse" saw widespread use. Smaller retail chains such as Rue21 also closed hundreds of stores.

In their scope, these sweeping changes have been unnerving to many observers who blame the boom in online retail, the overbuilding of mall spaces and nimble "fast fashion" retailers.

But the shuttering of big retail spaces, those exceeding 20,000 square feet, and the need to repurpose them is nothing new.

Here in Fargo-Moorhead, it's not hard to find many repurposed spaces.

The Ball Yard and Savers are in a 52,000-square-foot building that was Menards' home until 1998 when the home-improvement giant moved to a bigger store in West Fargo.

Hobby Lobby, Kirkland's home decor and Dollar Tree are in a 95,000-square-foot building that started life as Builders Square, then became Ernst Home & Garden and then Kmart, which closed in 2003.

Noridian Healthcare Solutions has offices in a 156,000-square-foot building that had been home to a factory outlet mall in the early 1980s, which later became home to local stores, a hair salon, a bank and a night club.

The concern around the country with so many big retail spaces going dark is that they may become blighted, attracting vandals and harming small businesses that had depended on traffic the big boxes had brought, according to the Institute for Local Self-Reliance, which focuses on community development. Strong Towns, a group opposed to costly sprawl, said big retailers require a lot of costly infrastructure, and when they go dark, they pay less taxes to support that infrastructure.


Jim Gilmour, a top Fargo city official in charge of planning and economic development, said he doesn't believe these problems will afflict Fargo-Moorhead.

"If we were in a weaker economy, I think I would be concerned. But some of these locations are really good and tend to turn into some other use," he said. "You might change from a big box into an apartment complex or an office park. We haven't seen them stay dark that long."

Different directions

There are many ways a big retail space can go.

The most worrisome from a community development perspective would be if it stayed dark for a long time.

Sometimes a retailer will quit before its lease expires, and the landlord need do nothing, according to Flacksbarth. There are a couple of locations in Fargo-Moorhead like that, he said.

Sometimes the landlord worries that lowering the rent might lower the building's value, which can affect the use of the building for financing, according to Swann.

Stopgap uses are also possible.

Swann, who was hired by Axis Clinical to look for appropriate real estate, said there were several temporary tenants at the former Dilworth Walmart before his client bought the 115,000-square-foot space for use in pharmaceutical testing. During the five years the building was empty, it served as a warehouse and a training facility for what's now Sanford Health, he said.

Around the country, repurposing has been even more creative. There's a library in McAllen, Texas, that used to be a Walmart; an ice rink in Rosemount, Minn., that used to be a grocery store; apartments in what used to be a mall in Providence, R.I.; and a megachurch in Tulsa, Okla., that used to be an outlet mall.

Flacksbarth said repurposing for more permanent uses does bring challenges even when the building is a generic big box. He said he's thinking a lot about that these days as he's marketing the 66,000-square-foot former Gander Mountain building.

The building is right by Interstate 94 and very accessible from 45th Street South, an increasingly well-traveled corridor, he said. "It's got great things going for it except for one thing - its sheer size," he said. "Can you find one user that's going to take the entire space?"

When heating and cooling equipment, restrooms and loading docks are designed for one tenant, for example, it's hard to divide them up for multiple tenants, he said. The restroom might be at one end, and there might be two thermostats, meaning two heating and cooling zones, for the whole building, he said.

The presence of lots of pillars and low ceilings might prevent a building from being used as an ice rink or volleyball courts, he said.

Retail future

With 549,000 square feet of retail expected to flood the market, it's hard to imagine all of it will ever return to retail use again.

Swann doesn't seem to think so.

Brick-and-mortar retailers are hurting too much from competition with online retailers, he said. The rents for some retail spaces have gotten cheap enough that they're comparable to industrial spaces, which typically rent for much less, since location and high visibility is a lot less important, he said.

Flackbarth said he worries about the health of the retail market, too. "I hate to say it, but someday kids are going to say, 'Grandpa, what was it like to have to go out and actually have to buy something instead of having it delivered to your door?'"

For now, he said he expects the challenge will be subdividing big spaces for multiple retailers because big retailers are a rare breed these days.

In the last 12 months, none of the 10 commercial properties that sold in Fargo were larger than 20,000 square feet and only one of the 44 commercial leases was larger.

For Ball Yard owner Mike Skogen, the market has been pretty good to him.

Business is good, and he feels like he's tapped into some pent up demand, he said. There's room to grow here, and the rent per square foot isn't much more than what he paid in the industrial park, he said.

"Originally, I thought it was a little bit of a leap of faith to be as big as we are," he said. "But once people learned what we could offer them, it's definitely grown."

Big-box revival

As the retail market continues to shift, a lot of big retailers, such as Sears, are leaving behind empty buildings that many worry will stay empty for good. The good news is that many can be reused, sometimes as new retailers and sometimes as something totally different.

Here's a comprehensive if not complete list of big retail spaces in Fargo-Moorhead that had gone dark at one time, and what's happened to them since.

- Former Builders Square, 4427 13th Ave. S.: The home-improvement store, a subsidiary of Kmart, opened in 1991 and closed in 1995. It reopened as Ernst Home & Garden in 1995 and closed in 1996. Kmart opened in 1998 and closed in 2003. Hobby Lobby opened in a part of the building in 2003. Hancock Fabrics opened in another part in 2005 and closed in 2007. Kirkland's opened in Hancock's space in 2013.

- Former Kmart, 1305 19th Ave. N.: The discount store opened in 1981 and closed in 1994. The Skills and Technology Training Center, which later became a branch of the North Dakota State College of Science, opened in 1998.

- Former Kmart, 3000 U.S. Highway 10 E., Moorhead: The discount store opened in 1979 and closed in 2016. Runnings opened in 2017.

- Former Kmart, 4305 13th Ave. S.: The discount store opened in 1980 and closed in 1994. Noridian opened in 1997 and closed in 2006. Burlington Coat Factory opened in 2006.

- Former Linens 'N Things and Old Navy, 1500 13th Ave. E., West Fargo: These stores opened in 2001 when the Westgate Commons strip was built. Linens closed in 2008, replaced by Big Lots in 2010, which closed in 2013, replaced by Marshalls in 2014. Old Navy moved down the road in 2012 and was replaced by HomeGoods in 2014.

- Former Menards, 1623 38th St. S., Fargo: The home-improvement store opened in 1984 and moved to a bigger building in West Fargo in 1998. The Fargo building was subdivided and became home to various stores, including Savers, which opened in 1999; Big Lots, which operated from 2000 to 2006; and Ball Yard, which opened in 2016. Several spaces remain vacant today.

- Former Office Depot, 4517 13th Ave. S.: The office-supply store opened in 1999, closed in 2002, reopened in 2005 and closed in 2014. The company had merged with Office Max and chose to rebrand the Office Max on 13th as Office Depot. Natural Grocers opened in 2015.

- Former Sportsman's Warehouse, 4901 13th Ave. S.: The hunting and fishing outfitter opened in 2004, later becoming Wholesale Sports after a buyout. The store closed in 2011. U-Haul self-storage opened in 2017.

- Former Sunmart, 828 30th Ave. S., Moorhead: The grocery store opened as Buttrey Food in 1974 with Osco Drug, which later became CVS. Sunmart moved to the nearby Brookdale Shopping Center in 1999; the Brookdale store, rebranded as Family Fare, closed earlier this year and is now vacant. Loopy's Dollar Store opened in a portion of the Sunmart space in 2002 and closed in 2012. True Value opened in another portion in 2006 and closed in 2012. The space remains vacant today.

- Former Sunmart, 1321 19th Ave. N.: The grocery store opened in 1982 with Osco Drug, which later became CVS. Sunmart closed in 1997, suffering from low traffic when the Kmart nextdoor closed. The Sunmart space remains vacant.

- Former Sunmart and CVS, 1240 25th St. S., Fargo: The grocery and drug stores opened as Buttrey Food and Osco Drug in 1974. Sunmart closed in 2009 after losing its lease. CVS moved to a nearby building in 2012. Fargo Cass Public Health and a police office opened in 2015.

- Former Village Square outlet mall, 900 42nd St. S., Fargo: The mall opened in 1984, but high vacancies soon forced management to turn to non-outlet businesses. Among its tenants were Great Plains Software, later purchased by Microsoft, a nightclub and Noridian, which took over the entire space by 2008.

- Former Walmart, 1711 U.S. Highway 10 W., Dilworth: Walmart opened in 1992 and moved to a bigger building nearby in 2008. Axis Clinicals opened in 2013.

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