Toys ‘R’ Us closure may ease redevelopment

Having the parcel’s three large anchors all vacant may make a deal for the site easier to reach; interest picking up for site


   In the parking lot between 200 and 300 E. Bellis Fair Pkwy., weeds burst through the cracked asphalt, rusty light standards reach into the gray sky, and mangled parking lot signs struggle to stand atop the buckled ground beneath them. The lot, shared by two large, vacant retail spaces, is slowly being reclaimed by the natural world. And, with the recent announcement of neighboring Toys ‘R’ Us closing this spring, another empty giant will soon join the former homes of Good Guys and Home Base.
   At first glance, getting successful businesses back into the retail complex, soon to be three empty shells with signless facades, looks to be a challenge. The impending absence of all business in the area has, however, actually increased interest in the area, and it looks as though the parking lot may be paved over again.
   “In an odd way, Toys ‘R’ Us’s closing has attracted a lot of interest for the site,” said Brian Finnegan, president of WestCom Properties Inc. and real estate agent for the former Home Base site. The national reputation of a struggling Good Guys, which closed in August 2005, combined with the vacant Home Base site, which hadn’t been occupied since summer 2001, and the suffering Toys ‘R’ Us location kept interest in the area low, he said. With all the tenants gone after Toys ‘R’ Us leaves, things can start anew, and the area will not be hampered by a weak tenant, said Finnegan.
   Much of the renewed interest, according to Finnegan, is coming from developers, local and national investors, and brokers who are now looking at his property and the immediate commercial area. He said interest to buy and lease this property has really jumped lately.
   With a fresh start in store for the area, Finnegan said there are several possibilities for the site as a whole.
   “There seems to be a lot of interest by developers wanting to come in and redevelop the entire property,” he said. Finnegan said he wouldn’t be surprised if at least one, if not all three buildings, were redeveloped or the whole area was redone. He said the location could potentially be used for offices, storage, entertainment, hospitality or even residences.


   The likelihood of the site becoming three large retailers again doesn’t seem probable to Finnegan. Although retail may be a part of the area’s future, he said, the location does also have some drawbacks.
    “I don’t think that the way it was developed and designed was very effective,” said Finnegan. According to Finnegan, the site is unique in that it is unusual to find such a large area, which is visible from the interstate, across the street from a million-square-foot shopping center and next to a major mall. For retail purposes, however, he said the area is hurt by being backed up off of Meridian Street, and set on a slightly higher elevation than the main street.
    Ken Oplinger, president of the Bellingham/Whatcom Chamber of Commerce and Industry said while the site isn’t the best retail location, he doesn’t attribute the past exits of the tenants to the plaza’s location or to Bellingham’s ability to retain larger retail stores.
    Oplinger noted that Bellingham is a unique market in that it not only supports the 175,000 people in Whatcom County, but populations in British Columbia and Island and San Juan counties. In all three closings, struggling corporations played a key role, said Oplinger. Home Base and Good Guys no longer exist as corporate entities, and in the case of Toys ‘R’ Us, the company closed many stores along with the Bellingham location, he said.
    Home Base closed in 2001 when the company decided to leave the home improvement market after being overwhelmed by competitors. In the move, the company closed all 89 of its stores, transitioning 42 of them into House2Home locations, specializing in home décor. Before long, House2Home filed bankruptcy and closed its remaining locations.
    As part of a broader plan, CompUSA, owner of Good Guys, closed 46 stores, including the Bellingham location, which closed in August 2005. The company, which cited a decline in consumer interest in high-end electronics stores, has consolidated both businesses and now offers electronics and computers in one store.
    Toys ‘R’ Us recently announced the spring closing of its Bellingham store along with 72 other locations nationwide.
    Only time will reveal the new landscape of the site, but the role of the buildings’ owners is key, and a complete redevelopment would require a coordinated effort. According to the Whatcom County Assessor’s Office, the Home Base site is owned by Norman Chang and BR LLC, Toys ‘R’ Us owns its building, and Naim Burnaba, a retired veterinarian from West Covina, Calif., owns the former Good Guys location.
    According to Finnegan, Chang is not yet ready to sell the Home Baseproperty, despite the surge of recent interest. A spokesperson for Toys ‘R’ Us did not want to comment on the issue. And, while he is receiving proposals from investors and those looking to enter joint ventures, Burnaba said he has not made any decisions yet.
    Complicating matters, the Good Guys building could potentially sit vacant for a while, as the company still has eight years remaining on its lease with Burnaba. Good Guys, which Burnaba said didn’t notify him until after leaving the space last summer, has been trying to sublet the space, without success. Although he is working with a local real estate agent, whom he did not name, to explore other possibilities for the site, he has not decided on his next move. As long as the rent is collected, Burnaba said that he is content holding his investment until the right opportunity — if any — comes around.
    The intentions of the area’s property owners and interested developers are yet be seen, but increases in population density, something currently happening around Bakerview Road and Meridian Street, is something that drives interest in nearby commercial areas, said Finnegan. Although not every tenant needs dense population nearby, the adjacent retirement home, area condo projects, and The Reserve at Cordata being built by D.R. Horton, will all be positives for potential commercial developers in the area, he said.
    “I think it is a prime redevelopment area,” said Finnegan.
    As for when it will happen, he said action in some form will likely happen sooner rather than later; stay tuned.


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