Nearly a decade later: Old Ames department store remains vacant in Dover
DOVER, May 21, 2012 (Menafn - Foster's Daily Democrat - McClatchy-Tribune Information Services via COMTEX) --When former retail giant Ames Department Stores went out of business, the owner of the Central Avenue building where it was located didn't expect it would be difficult to find a new tenant for the space.
Located in a bustling commercial strip in the heart of Dover, the large, brick building that once housed Ames boasts ample free parking. Each day, some 38,000 vehicles pass by the lot, which is sited near stores and restaurants that draw a mix of customers to the area.
The building at 831-833 Central Ave. is also a short drive from the Maine border, making it attractive to retailers who hope to lure customers with the promise of tax-free shopping.
So when Ames declared bankruptcy nearly a decade ago, a spokesman/spokeswoman for grocery store chain Hannaford Brothers, the owner of the building, was confident a new tenant would be found quickly.
"I don't think it will have a significant adverse impact," Caren Epstein told Foster's Daily Democrat in August 2002, after Ames laid out plans to liquidate its merchandise within three months and close up shop.
Today, the 67,710-square-foot unit formerly occupied by the department store remains vacant, filled only with boxes, benches and a handful of Ames check-out counters.
Several retailers have expressed interest in leasing the space since Ames departed, but none has successfully negotiated an agreement with Hannaford, which occupies the other half of the building.
It's debatable whether the lingering vacancy has had negative effects for the city; Hannaford, which is based in Maine, is still paying property taxes on the vacant space.
But city planning officials say they'd obviously prefer to have the building filled, bringing new economic activity and potential job creation to Dover.
"We would love to see some more activity in that area," Dover Planning Director Christopher Parker said this week, "but it comes down to Hannaford has the lease, and I'm not sure what the terms of it are, and I'm not sure under what scenario they would lease it."
In the past three years alone, at least four or five businesses have expressed interest in leasing the space from Hannaford, according to Dover Economic Development Director Daniel Barufaldi. He said negotiations with Hannaford fell through each time because the prospective tenants planned to sell a range of products that included "maybe one or two small things" also available at Hannaford, a grocery store.
Barufaldi said he's been marketing the property at monthly business development meetings at Pease Tradeport, but word has spread that businesses "really have to fit a tight mold" to be accepted by Hannaford.
"From time to time we have various people looking at it," he said. "The real problem is that Hannaford will not have any business in there that will compete with them in any way."
While the city isn't losing any property tax revenue as a result of the vacancy, having the space filled is desirable because in addition to economic benefits, it would improve the image of the city's business corridor, Barufaldi said.
"It's like looking at a smile with a tooth missing," he said. "You don't like to see a vacant lot in a prosperous community."
During her seven years on the Dover Planning Board, Chairwoman Marcia Gasses said she's never seen a retailer have enough success during negotiations with Hannaford to bring a proposal before the board's Technical Review Committee. Gasses said she would personally like to see a business move into the former Ames space, but the Planning Board's role is not to seek tenants.
"People have rights when they own property, and if they choose not to do anything with it, there's not much you can do about it," she said.
Hannaford, which has 181 grocery stores in five states, including 37 in New Hampshire, doesn't have an official policy to determine suitable tenants for its properties, Hannaford spokesman/spokeswoman Michael Norton said on Monday. Several Hannaford stores are already "co-located" with competing retail establishments, he said, including a grocery store in Skowhegan, Maine, which is next to a Walmart.
Dover isn't the only city in New Hampshire with a lingering vacancy created by the collapse of Ames. Among a few statewide, the space formerly occupied by an Ames store on Route 1 in Seabrook also remains vacant today, according to an employee in the office of the Seabrook Planning Board.
Norton said there "definitely have been inquiries" from prospective tenants since Ames closed its Dover store, but "nothing has come together." He said the prospect of finding a tenant was better before the financial collapse in 2008, which sent the real estate market into a tailspin.
"I think we would have expected that it wouldn't have gone this long, but it has," he said, "so that's the nature of this particular space. It's large, and it has not been easy to find a tenant."
The lot is currently zoned as a "thoroughfare business" area, according to Parker. That means it's already permitted to house retail stores, restaurants and offices. The zoning also allows for residential use on the upper floors of buildings.
Hannaford owns the entire 7.1-acre lot, including the portion leased to the Papa Gino's restaurant nearby. The Hannaford building, which includes two units, straddles the border between Dover and Rollinsford, and a portion of the taxes on the building are paid to Rollinsford.
The portions of the building and the property located in Dover are currently assessed at a combined 5.3 million, according to the city's property records.
Kent White, of CBRE New England, the real estate broker selected by Hannaford to market the property, said the company is seeking to lease the space for about 7 per square foot, plus the cost of operating expenses, taxes and utilities.
Parker recalled various retailers inspected the site in the last few years; one person had the idea of creating an indoor mall in the property. Another client was seeking to set up a call center inside the building, according to White.
It's unclear exactly when the unit became available on the retail market. Neither Parker nor Hannaford company officials could provide the exact date Ames shuttered its operation and moved out of the building.
Parker said he would not be surprised if the owner of the Ames brand continued to pay rent on the space for a period of months or years after declaring bankruptcy, due to a long-term lease agreement. It's likely that Hannaford is now absorbing the full cost of tax payments for the vacant unit, Norton said.
A message left on the answering machine at Ames' remaining corporate office in Connecticut was not returned.
White said the retail sector was hit particularly hard on the Seacoast after the 2008 economic collapse, which has inhibited the process of finding a new tenant.
"We're encouraged that over the remaining year, we'll have more interest in the space," he said.
Even if a business moves in, Parker said the city wouldn't see a measurable difference in tax revenue, since property assessments are already calculated using the "highest" and "best use" of a property. However, the benefits of maintaining full retail occupancy in the city are obvious, he said.
"It's never welcome to have an empty storefront," he said, "especially one in a prominent location such as that strip, but we're not in the position of filling it ourselves, so short of that, our goal is to work with the property owner and help them when they need to find users."
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