No takers yet for Rainbow space
Leasing agent hopes to secure tenants by late summer, early fall
It’s likely that space at WestLake Plaza that once housed Rainbow Foods will remain vacant for some time.
That’s the word this week from the company that owns the 100,500-square-foot shopping center at 119 SW 12th St. in Forest Lake. Early in January the shopping center was left with a big hole when Roundy’s, the parent company of Rainbow Foods, shuttered its 47,000-square-foot grocery store operation.
A grocery store has filled that bay since WestLake Plaza was built in 1988.
Dick Kvanbeck, vice president of retail asset management for IRET Properties, a Minot, N.D.-based company, said this week he has had meetings with several prospective tenants who have expressed interest in locating in the shopping center. Kvanbeck said he was not at liberty to reveal names or the types of businesses that might move there, but said retail would be involved.
It may be months before the space is leased, though, he said.
“The reality is these [lease negotiations] take longer than they should,” Kvanbeck said. “I am hoping by late summer or early fall.”
It’s not likely that a retailer can be found who will lease the entire 47,000 square feet, Kvanbeck said.
“More than likely we are going to have to subdivide the space,” he said.
Rainbow Foods closed Jan. 9 and more than 50 jobs in Forest Lake were gone. The company liquidated store equipment at an auction in mid-January.
Kvanbeck said his company worked hard to keep Roundy’s on a lease, but the company elected to vacate when its lease expired.
“We made numerous attempts to encourage them [Roundy’s],” Kvanbeck said. “We wanted to see upgrades to the store. Unfortunately it didn’t work for the other side.”
Although not claiming to be an expert on the grocery business, Kvanbeck said the move by Roundy’s to leave Forest Lake was probably tied to changing market priorities and increased competition.
But the departure did come as a surprise to Kvanbeck for a community that once supported three full-fledged grocery stores.
“Everybody has been getting into it,” Kvanbeck said of the grocery business. Walmart in Forest Lake expanded two years ago to become a full grocery store. Target in Forest Lake also stocks a large supply of groceries.
The economic pressure on grocery stores continues to intensify, he added.
Looking at Forest Lake with a city population of 18,000 and a school district with 45,000 residents, Kvanbeck said he was surprised Rainbow could not make it.
“I have to believe they can function here,” he said, referring to multiple grocery stores. “There are other issues involved.”
The closing left Forest Lake with Cub Foods and Walmart as the major grocery retailers in the community. Bruce’s Foods in Wyoming is a large-scale grocery operation four miles north of Forest Lake.
Kvanbeck has been involved in the property management business for 35 years. He was on board when T.F. James Co. built WestLake Plaza in 1987-1988. About 10 years ago the company was acquired by Minot–based IRET Properties. Regional headquarters remain in Eden Prairie. IRET Properties has holdings in 12 states and manages retail, industrial, medical, office and multi-family properties.
When WestLake Plaza opened in 1988, the grocery operation was a Festival Foods. A number of ownership changes for the grocery store followed. The grocery end of WestLake Plaza was expanded from 34,000 square feet to 47,000 square feet in 1996 when Festival Foods was sold and the name changed to Rainbow Foods.
OfficeMax and Northern Tool and Equipment, located on the north end of the shopping center, are the current major anchors. Kvanbeck said the 2360 square feet once leased to a travel agency remains unoccupied.