Attention Kmart Shoppers: There’s an uncertain future for big box retail in Riverhead

“Attention Kmart shoppers.”

It’s a phrase entrenched in all our memories, but one that will soon be extinct in Riverhead and dozens of other communities around the country.

The imminent closing of Riverhead’s Kmart, once a beacon for shoppers seeking blue-light specials, layaway items and the hot new toy of the year, reflects a larger, more troubling trend toward declining big-box retail in Riverhead. 

The Route 58 store, which opened in February 1995, is among more than 100 Kmart stores nationwide that have already closed or will close in 2018. On Nov. 25, Riverhead Kmart employees will seek your attention one last time.

According to a filing with the New York State Department of Labor, 65 jobs will be lost with the Riverhead Kmart’s departure — and a 104,000-square-foot building will be left empty.

Kmart’s demise follows that of nearly a half-dozen other large chain stores on Route 58, as more new stores come to other parts of town. The pattern begs the question of when town officials should have foreseen the collapse of big-box retail in Riverhead.

In an exit interview with this newspaper as he left office last year, former Riverhead Town supervisor Sean Walter said the future of the corridor was the most pressing issue town officials must address — more pressing than the sale of EPCAL.

“We have not been hit as hard as some other municipalities have with box stores going out of business,” Mr. Walter said a year ago. “But it’s coming.”

Route 58 near the traffic circle in the 1950s. (Courtesy of Gail Evans)

TANGER SPURS DEVELOPMENT

In a 1995 column about holiday shopping in a new big-box era, former News-Review editor Sue Miller referred to Caldor, Kmart, BJ’s Wholesale Club and Toys ‘R’ Us as Riverhead’s “Big Four.”

Twenty-three years later, only one of those stores remains.

Tanger Outlets, which opened the first of its three sections in 1994, is the center most closely linked to jump-starting retail development along the once-quaint Route 58 corridor.

“I think [town officials] realized at that point that Route 58 — because it’s sewered — could be used to really generate economic development for the town,” said Dawn Thomas, a former town attorney who administers Riverhead’s Community Development Agency.

Shoppers flocked to the 90-acre Tanger complex, located at the terminus of the Long Island Expressway.

The town’s comprehensive master plan was adopted in 2003, and Route 58’s fate was sealed when “Destination Retail” zoning was adopted along the corridor.

“[Town officials] came up with this theory of destination retail — that people would travel great distances if you had high-end retail,” Mr. Walter said in a September interview. “It started with Tanger and blossomed from there. The intent is: Here is your destination and here is your retail.”

Ms. Thomas said that while the master plan called for development, it helped the town avoid the “strip mall” look and feel that characterizes western Suffolk County towns. “All of a sudden, you have this influx of applications, so you want to make sure the things that develop there are what you want to see there,” she said.

With the promise of more dollars being spent in Riverhead, job creation and increased tax revenue, more applications than ever before were approved.

Residents have been voicing concerns about development on Route 58 since the early 1990s. When Tanger II was announced in 1995, public opposition made the front page of the News-Review, as Main Street merchants hung signs asking the Town Board to “Say No to Tanger Phase II.”

The expansion doubled the size of the factory-outlet center. At the time, Town Board members defended the outlets, citing job growth and tax base stabilization. Between 1994 and 1995, Tanger had 700 employees, paid nearly $800,000 in property taxes and generated $8 million in sales tax revenue for Suffolk County.

Today, the outlets draw, on average, 13 million visitors each year.

Kmart staff at the Feb. 10, 1995 Riverhead store opening. (Courtesy of Barbara Simon)

STABILIZING A LOCAL ECONOMY

In a 1989 bid for Town Board, former town councilmen Vic Prusinowski and Jim Stark called for measures to encourage new business in Riverhead.

“We need to encourage a healthy tax base growth of environmentally sensitive business to create meaningful jobs and economic growth,” read a Stark-Prusinowski ad that was published the week of the 1989 Riverhead Town election.

Reached by phone earlier this week, Mr. Prusinowski said the push for development resulted from preservation efforts begun in the 1980s by Suffolk County and Riverhead Town that removed huge swaths of land from the tax rolls.

“We have more land preserved than any other town in Suffolk County,” he said, adding that the tax base must then be balanced by growth. “It’s harder to keep the tax base growing to avoid tax rate increases to the general public.”

Looking back on two decades of burgeoning development in Riverhead, Ms. Thomas said balancing development with other town goals, like farmland preservation, helped stabilize taxes.

“Those properties go off the rolls,” she said of preserved farmland.

The loss of revenue was offset by stimulating development along Route 58, which in turn kept taxes lower than in western towns, Ms. Thomas said.

Mr. Walter said that without the box stores, residents could have faced daunting tax bills.

“If we didn’t add the big-box stores, we would have gone to negative valuation and the couple percent tax increases we did every year would have been much steeper,” he said.

Aside from the empty buildings they leave behind, shuttered big-box stores leave cavernous holes in the town’s tax base.

“The owners of these stores are coming in and asking for reductions in their assessed valuation, and they very well might be entitled to them. That starts the death spiral,” Mr. Walter said. “The town has got to figure out how to grow its way out of that.”

In January, the former Walmart on Route 58 will have been boarded up for five years. (Credit: Grant Parpan)

BRICK AND MORTAR IN AMAZON ERA

The problem is not unique to Riverhead.

Over seven years in office, Mr. Walter said the seismic shift in how people shop happened “unbelievably” quickly.

“When I got elected, I had a flip phone,” he said. “Everything you can buy in a box store, you can buy on Amazon or other online services.”

He attributed the change to generational behavior.

Millennials don’t shop [in brick and mortar stores.] They are not coming to the store to buy anything,” Mr. Walter said. “They are going to buy it on their phone and have it shipped.”

As revitalization efforts progress on Main Street, where new restaurants and hundreds of apartments are planned to create a more walkable district, will Route 58 become a ghost town?

“I don’t think Kmart will be easily filled,” Mr. Walter said. And the will-they-or-won’t-they saga of a movie theater at the former Walmart has continued for several years.

“[The vacant buildings] are going to be a stranglehold around the town’s neck, both economically and [from] a quality of life standpoint,” Mr. Walter said, adding that the answer lies in updating the town’s Master Plan for the first time since it was adopted in 2003.

Since Kmart announced in August that it was closing, Modell’s has also said it will close early next year. Along with the old Walmart and previously closed Toys ‘R’ Us, Sports Authority and Radio Shack franchises, that makes six stores and over 325,000 square feet of space that will soon be vacant — with no publicly known tenants in the works.

Riverhead Toys ‘R’ Us sits empty today. (Credit: Grant Parpan)

ADAPTIVE REUSE

Some current town officials believe the answer for the future of Route 58 lies in updating the town’s zoning code.

“We’re going to have to learn how to repurpose [vacant buildings],” said current Supervisor Laura Jens-Smith. Zoning would have to be put in place to allow for that, she said, adding that it may take a bit of creativity.

In McAllen, Texas, officials undertook a multimillion-dollar project to transform an abandoned Walmart into a sprawling public library.

In Coon Rapids, Minn., a vacant Sports Authority was turned into an indoor adventure park with trampolines and a zip line.

As land uses change, traditional zoning may not apply.

Euclidean zoning — which most municipalities use — segregates land based on use: residential, commercial, industrial, agricultural, and so on. But it often lacks foresight.

Ms. Jens-Smith said repurposing in Riverhead could allow for assisted living, educational space or even a mixed-use industrial and commercial office complex. Current and former town officials interviewed for this story unanimously agreed that Riverhead could use an assisted living facility that would allow residents to “age in place.”

Municipal buildings — like Town Hall or a Justice Court — are also candidates for relocation.

But the vacant stores are often sprawling.

“It’s 100,000 square feet of open space,” Ms. Jens-Smith said. “Most things don’t require that much space anymore,”

In the downtown area, the Town Board is exploring form-based zoning, which favors physical form over intended use as its methodology. Form-based codes focus on buildings as they relate to the streetscape and adjacent uses, encouraging mixed uses intended to preserve the character of a community. The supervisor said that approach would help existing buildings adapt to market changes and is environmentally friendlier.

Ms. Thomas would favor a similar zoning approach. “I’d rather have property that’s less restrictive so [the owner] can have creative thoughts about reuse,” she said.

Kmart will close its doors on Nov. 25. (Credit: Grant Parpan)

LOOKING AHEAD

As big-box stores boomed, town officials likely couldn’t have foreseen having to deal with their closures less than 25 years later.

But it isn’t all doom and gloom.

Close to 10 development projects are currently in the works for Route 58. Three of those involve plans for medical offices, one would bring a new gas station to town and two others would lead to new fast-food spots.

As for big-box stores, ShopRite recently opened in the former Waldbaum’s at Riverhead Centre, Harbor Freight is coming to the former Home Goods location, West Elm will soon open in the former OfficeMax at Tanger and up to two more stores could be coming to the Brixmor retail center anchored by Costco, where Home Sense recently opened.

In her November 1995 column about holiday shopping at Riverhead’s new big-box stores, Ms. Miller described a circus-like buzz in the air and said she witnessed shopping cart gridlock that required the presence of a traffic cop.

Of the experience, she wrote: “I’ve seen the future.”

It’s an uncertain future the current Town Board must now contend with.

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