Friday, March 05, 2010
Chain passes up chance to buy Roanoke Ukrop's
A chain that purchased several Ukrop's sites says it is not considering buying the former Roanoke store.
ERIC BRADY The Roanoke Times
Ukrop's Super Market in Roanoke closed in October. The city has expressed great interest in attracting a new retailer but is unsure of the developer's plans.
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There are more questions than answers surrounding the future of a shuttered grocery store in Roanoke, the former home of Ukrop's Super Market.
A city official tried to market the vacant real estate on Franklin Road to a grocery company that will convert Ukrop's stores in Richmond and Williamsburg to the Martin's Food Market brand this spring.
But the former Roanoke Ukrop's isn't part of that deal, and representatives with the Giant-Carlisle division of Ahold USA, which operates Martin's, reiterate that they are not considering the empty Roanoke structure for a new store.
Ultimately, the decision about what will happen to the 58,000-square-foot retail building is not in the city's hands. Its future falls to the site's owner, IMD Investment Group.
City officials said Bland Painter of Troutville, who heads IMD, has not informed them about his plans for the site, which features underground parking, a grocery cart conveyor and a contemporary look.
Still, the store's closure may benefit the city in some ways, from a financial perspective.
Ukrop's closed its doors in Roanoke on Oct. 24, while an in-store branch of First Market Bank left in December. The grocer's signs are down and a stoplight on Franklin Road, leading into the empty parking lot, is covered in plastic.
A public auction in December to sell the structure, which was in foreclosure, was postponed and has not been rescheduled.
Painter did not return calls and an e-mail for comment within the past week.
IMD's ability to recruit another retailer for the site will determine whether its performance agreement with the city remains alive. Through the 2004 agreement, Roanoke promised to pay IMD up to $600,000 annually for 15 years, based on tax revenue generated by Ukrop's and an adjacent Walgreens drug store, which opened in August.
This agreement will stay intact if Painter finds a retailer that is not already in the city to take Ukrop's place, according to its terms.
It's unclear what will happen with this agreement if a new store does not land at the Ivy Market retail center by September, which is the date that IMD can request its next grant, said Brian Townsend, assistant city manager.
IMD received $522,542 in its first grant year and $506,447 in the second year. Ukrop's opened in 2007.
"Mr. Painter's got to come forward and say what the status is," Townsend said.
In December, with the hope of drumming up interest in the Ukrop's site, Robert Ledger, manager of economic development for Roanoke, contacted Ahold USA. The Dutch company Royal Ahold purchased Ukrop's stores in Richmond and Williamsburg this year, under its Giant-Carlisle division in Pennsylvania.
Ledger suggested that the grocery company consider the former Ukrop's site in Roanoke, which he described as an "amazing development," in an e-mail obtained by The Roanoke Times.
"The city of Roanoke has a high level of interest in filling this building and invites Martin's to investigate this as soon as possible," Ledger wrote.
Todd Robinson, director of real estate for the company, responded on Dec. 22, explaining that the Roanoke store is not part of the Ukrop's acquisition.
Also, last week, Tracy Pawelski, a spokeswoman for Giant-Carlisle, reiterated this stance, explaining that the company is "focused on ensuring the success of our business with the stores that we did purchase," and that does not include the Roanoke site.
Ledger said his inquiry to the company was "a pure cold call on my behalf to see if there was any interest."
He said he doesn't plan to contact other retailers, because the city is "at the mercy of the owner to instruct us as to how to market that."
And since Painter has not responded to the city's inquiries, "We're hesitant to market something we don't know anything about," Ledger said.
Though the closed grocery store is not generating sales tax for the city, Roanoke is not necessarily losing money. The development essentially is revenue neutral, because the city receives less tax revenue and therefore will pay less back to IMD, Townsend said.
Also, Ukrop's closure likely has sent former shoppers to other Roanoke supermarkets, said Ann Shawver, Roanoke's finance director. That's an added revenue boost to the city, compared with sales tax revenue that was generated by Ukrop's but paid back to IMD through the agreement, she said.
A revenue boost isn't yet evident, however. Tax revenue for the city's grocery retailers declined 16 percent in fiscal 2010, through December, compared with fiscal 2009, Shawver said.
