U-HAUL CLOSES ON PURCHASE OF PROPERTY
AT 2019 N RICHMOND ROAD
Many
of you may have read the article in the Northwest Herald, stating U-Haul was
purchasing the former Wal-Mart building and site at 2019 N Richmond Road which
is 115,600 square feet on 12.77 acres of property. Additionally, many of you read in my post
dated February 10, 2016 http://mchenrymarketpulse.blogspot.com/2016/02/despite-city-councils-unanimous.html when I reported U-Haul terminated their contract
with Wal-Mart and decided not to purchase the site at 2019 N Richmond
Road. This is all true.
On Friday February 26, 2016 I was
informed by both U-Haul and the real estate broker for Wal-Mart U-Haul
officially closed and purchased the former Wal-Mart site.
What happened? As I had stated
previously, even though the City Council approved the zoning request which
enables U-Haul to operate their business at the former Wal-Mart site the
private real estate transaction between U-Haul and Wal-Mart still needs to
occur. The initial contract between
U-Haul and Wal-Mart was terminated a couple of weeks ago however following the
two parties began talking again.
What
changed? I am not sure but the bottom line is Wal-Mart and U-Haul resolved their
differences and entered into a new purchase contract, and U-Haul officially
purchased the site and closed on the property on February 26, 2016. Therefore, as explained below, a once vacant
115,600 square-foot building which had been vacant since 2010 will be occupied
which is a tremendous benefit to the City of McHenry, residents and other
businesses!
Many have also commented positively
and negatively about this transaction via social media and having an interactive
vibrant discussion is very healthy. I realize U-Haul is not what many
would have imagined nor it may not be your first choice at that location but consider these facts:
- The biggest impediment to the
redevelopment, purchase and occupancy of the former Wal-Mart site is land
use restrictions Wal-Mart has placed on the property including: property cannot be occupied by a grocery
store user larger than 35,000 square feet or a general merchandise user
greater than 55,000 square feet.
Even if sold to another user or developer by Wal-Mart, these
private deed restrictions will run with the property for 25 years. The
City had no leverage with Wal-Mart to change or alter these restrictions.
- Others have been interested in
purchasing the site, including a grocery tenant. Wal-Mart would not sell. Mariano’s was mentioned in one of the
Facebook comments. Great suggestion
however Wal-Mart would not sell to
Mariano’s and secondly Mariano’s is focusing their efforts more on the
inner ring suburbs with greater population density ensuring a greater
chance of being successful.
Will Mariano’s ever locate in the City of McHenry? Maybe
however following their acquisition by Kroger, the nation’s largest grocer,
dynamics of where they fit in the Kroger profile may change; priorities may
shift and it’s not inconceivable to think they may consider the City of
McHenry sooner. However the grocery business is extremely competitive and retailers,
now more than ever, want to almost guarantee they be successful before they
open a new store.
- Many
may have read Woodman’s is planning on constructing a 240,000 square foot
store at Route 12 and Route 120. Why didn’t Woodman’s consider locating on
Richmond Road in one of the large vacant buildings or somewhere else in the
City of McHenry? As previously
stated Wal-Mart would not have sold their building to Woodman’s; secondly
the new U-Haul store is 115,600 square feet; Big R is less than 100,000
square feet and the former Sears/K-Mart, currently vacant, is less than
90,000 square feet so practically Woodman’s could not fit in any of those
buildings.
- In an 2010, in an effort to keep Wal-Mart in the City of McHenry several options were considered including constructing an addition onto the existing Wal-Mart store at 2019 N Richmond Road; and even potentially a new building in another center on Richmond Road if the whole center was vacant. For example, hypothetically speaking, even if a center such as McHenry Commons (Goodwill; Hobby Lobby; former Sears, etc.) was vacant property Wal-Mart could not fit their store on the site-it was not deep enough. Woodman’s needs at least 20 acres to build a new store; the U-Haul site is less than 13 acres.
- Additionally, Route 12 and 120 is on the edge of the City of McHenry’s market trade area therefore it’s far enough from existing Woodman’s locations in Carpentersville (21 miles) and Kenosha, WI (28 miles). While the distance from North Richmond Road to both of these locations is similar to 12/120 other factors also have to be considered including: daily traffic counts; drive-time; population density; accessibility; co-tenancy; site/building costs; visibility as well as special demographic and socioeconomic data also known as psychographic information about consumers and shopping patterns. Traffic counts on Route 12/120 are approximately (20,000/day on Illinois Route 120) and (27,500 on Route 12) whereas on Richmond Road at McCullom Lake Road the traffic counts are (23,500 on North Richmond Road) and (6,400 on McCullom Lake Road). Woodman’s, when I spoke with them a few years ago, stated they wanted 200,000 people within a five-mile radius.
- At Richmond Road and McCullom Lake Road the population within a five-mile radius is approximately 65,000 people. While these factors are certainly are taken into consideration companies are continually evaluating their business models; markets are constantly changing; retail is continually evolving and competition is fierce and businesses want the best chance to be successful and only they know exactly what provides them the best chance to do so.
- To wrap-up the U-Haul
discussion, another alternative to U-Haul purchasing the former Wal-Mart
site which was considered immediately following the closing and relocation of Wal-Mart was dividing the building. While this may be a viable option, it is
extremely costly and was
considered by others interested in the subject property in the past
but did not materialize into a viable project due to the difficulty of
balancing cost, with appropriate tenant mix and complying with the use
restrictions Wal-Mart has placed on the property.
- An
interesting fact: U-Haul has not closed a store in its
75-year existence. Many other
serve-oriented uses are located and accommodate large traditional
“retail-oriented” spaces on Richmond Road including Centegra Rehabilitation
Center and Immediate Care as well as smaller outlot and inline spaces
which were once almost guaranteed traditional “retail-oriented” spaces. The
market has changed and service-oriented uses are certainly more common
along major retail corridors, provide economic diversification, stability,
and increase the viability of the corridor.
- An additional benefit is the
City negotiated with U-Haul to reserve 45,000 square-feet (just over one
acre) of outlot space along Richmond Road which will be subdivided and
sold a third party user. There is a great demand for outlot space
along Richmond Road, as staff has spoken with parties seeking outlot space
for restaurant/retail uses!
MINOR DETAILS!
MCHENRY RECREATION CENTER OPENED ON
FEBURARY 29, 2016 AND HAS 750 MEMBERS ALREADY!!!!!!!
THANK YOU TO U-HAUL AND EVERY OTHER
BUSINESS WHO HAS MADE A COMMITMENT TO LOCATE THEIR BUSINESS, EXPAND THEIR
BUSINESS OR KEEP THEIR BUSINESS IN THE CITY OF MCHENRY!!! EVERY ONE COUNTS!!!
As I’ve stated in a past post, even if
all buildings were occupied economic development would nonetheless always
remain a top priority due to its dynamic nature.
I mean this as economic development in a holistic sense: business growth, expansion and retention,
community events and festivals, (eco, heritage and agri) tourism, education,
healthcare-all of which contribute to an environment conducive to sustaining
and growing a healthy local economy!!!!!!!!!!
CONTINUE THE DISCUSSION…EVERY ONE
CONTRIBUTES!!!!!
Please help us keep our community vibrant and strong to the greatest
extent practical for businesses, residents and visitors alike! The City Council is continually evaluating
ways to assist in promoting business, tourism, community events and
service! Economic development is an
ongoing effort the City is committed to and is a community-wide effort. At the end of the day the entire community
and everyone who is a part of it benefits!
Douglas P. Martin
Director of Economic
Development
City of McHenry
333 S Green Street
McHenry, IL 60050
815.363.2110 (d)
815.363.2173 (f)
815.790.4752 (c)
Awesome! Thanks www.youtube.com
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