Redevelopment reigns on Willmar’s First Street amid flurry of commercial construction

Redevelopment reigns on Willmar’s First Street amid flurry of commercial construction

September 18, 2018

Redevelopment reigns on Willmar’s First Street amid flurry of commercial construction

WILLMAR — It has been a good couple of years for new development in Willmar. From 2016 through 2017, there was approximately $103 million worth of new residential, institutional and commercial construction projects approved by the city. “It is a good number, especially compared to five or six years ago when it was $30 million,” said Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.

First Street South saw nearly one-fifth of the commercial development in that time period, Backman said, continuing its reign as the heart of Willmar’s retail sector, ranging from new businesses moving to town to the construction of new retail buildings by developers seeking to lure additional business. “That is a significant portion” of the city’s commercial development, Backman said.

Tearing down and building back up has been a common sight along First Street, with many old structures removed to make way for new, modern, multi-use facilities.

“I think it is a smart move on part of the owners. Most of the projects have been redevelopment projects,” Backman said. “I see redevelopment as investing in the future of the community.”

The appearance of Kwik Trip on the scene is a perfect example of a business taking challenging sites and turning them into something new. The First Street Kwik Trip, which is slated to open later this month, is on the location of an old car dealership. The U.S. Highway 12 store that opened in August was an old gas station and the third Kwik Trip store to be built in downtown Willmar will also be on the site of an empty car dealership.

“That was like solving three of my problems,” Backman said. “That is impressive.”

Older buildings, left empty when a business moves or closes, can be a challenge to remake for a new tenant. Backman said there is actually a limited pool of open spots that a business could retrofit to fit its needs. Most businesses would rather have new construction than try to fit themselves into a space that might not tick all the boxes.

“It makes it difficult,” Backman said.

An example of such a project succeeding is PetSmart, which remodeled the old Best Buy to sell fish and dog food instead of televisions and computers.

Finding tenants

There have been some questions raised in the community regarding vacancies along First Street. For example, the building in front of Kandi Mall that houses Starbucks Coffee and Aspen Dental, developed by RockStep Capital which owns the mall, is still waiting for its third tenant, months after opening. 

While there are empty spaces in new retail buildings along First Street, Backman said it is not uncommon for developers to start construction once the anchor tenant(s) are in place. For instance, Legacy Commons on First Street South, between Minnesota Avenue and Monongalia Avenue Southwest, will be anchored by Domino’s Pizza, but so far no additional tenants have been publicly announced.

“There are things in the works,” said co-developer of the project Blake Graves.

Graves said now that the building is starting to take shape, and potential tenants can see what the building will be and what it can offer, he has been seeing more interest in the project.

“The phone is ringing a lot more,” Graves said.

First Street Station, which will soon be taking shape on the site at First Street South and Willmar Avenue Southeast, is slightly different, with no publicly announced tenants for the four-unit commercial structure. Owner Dan Goetzman said he isn’t concerned about the lack of tenants and wants to find the best combination of tenants he can for the site.

“I have had a lot of interest,” Goetzman said.

Goetzman said the location of 1st Street Station is one of the best intersections in the county. He believes the building, which should be completed in early spring by Marcus Construction, will be filled with a combination of retail and food.

“I wanted to do something Willmar could be proud of,” Goetzman said.

When it comes to leases between a building owner and a retail tenant, Graves explained it is not as easy as renting an apartment. There is a lot of back and forth negotiations and it can take weeks, if not months, to work something out.

“It takes a long time to get a lease done,” Grave said.

Bright future

Another major piece to the continued success of both First Street and the overall retail health of Willmar is Kandi Mall. Backman said the closure of the Herberger’s department store took many people by surprise. 

While Kandi Mall currently has massive empty spaces on both ends — the Herberger’s space and the Kmart space that’s been vacant for several years, Backman said there have been discussions with major retailers.

“They’ve had discussions with Kohl’s, TJ Maxx,” Backman said. “The retail patterns are evolving. We’ve done things to help the mall, but they need to perform.”

Graves, whose family has owned the Domino’s in town for 35 years and is also involved in other Willmar retail development, said being on First Street has been a dream for decades. In the past few years things started to fall into place to make the move possible, and once the Domino’s opens on Nov. 5, it will be a marquee location for the pizza business.

“Most of the business (in Willmar) is done on First Street,” Graves said. “It was the right time. We are really excited.”

Improvements and additions in Willmar’s housing market and employment opportunities would also assist in bringing more retail business to First Street.

“All of those things are related,” Backman said.

Overall, Backman sees a bright present and future for First Street, as Willmar’s main commercial zone.

“I think it is a diamond in the rough,” Backman said. “It has seen significant developments, but there is room for more.”

Article by Shelby Lindrud,  West Central Tribune, September 18th, 2018.