Real estate investor Rich Baranzano says he’s sitting on a gold mine.
But for almost five years, that gold mine – the Kauffman Center retail complex at Fourth Plain Boulevard and Kauffman Avenue – has sat empty.
A fire destroyed the 14,500-square-foot secondary building in 2001 that was then home to a thrift store, Laundromat and deli. Rebuilding took nearly two years and cost more than $1 million, and the result is an attractive brick and cement building with plenty of windows and space for up to nine tenants.
During the rebuilding period, a 99 Cent Store and flea market that were leasing the 23,700-square-foot anchor building vacated the space, and it has sat empty since.
Baranzano envisions a specialty grocery in the anchor space and a variety of other uses – restaurants or a shipping store – in the secondary building.
He claims the area around the center is ready for upscale development, and – using suspiciously lofty employment and population demographics – Baranzano suggests the West Vancouver location is better than that of Tigard’s upscale Bridgeport Village.
“(Kauffman Center) has the strongest captive demographic market in Clark County,” he said. “Tell me, where else in Vancouver is it better?”
In reality, the neighborhoods around the complex have rather odd demographics.
Within one mile of Kauffman Center, 13,529 people lived in 5,502 households as of 2005, according to demographics prepared by the state of Washington and provided by the Columbia River Economic Development Council.
The household income is all over the board, with 42.5 percent of households earning less than $30,000, 30 percent earning between $30,000 and $60,000, and 27 percent earning $60,000 to more than $100,000 annually.
In the next five years, the lower income households are not expected to change much, but the number of households earning more than $75,000 a year is expected to increase 31 percent.
But the number of renters versus homeowners is also expected to increase from 54.8 percent in 2005 to 56.2 percent in 2010, and the number of homeowners is expected to decrease from 45 percent in 2005 to 43 percent in 2010.
So why is Kauffman Center still empty?
Baranzano said he has not actively marketed the space because it wasn’t costing much to keep it empty.
“I was holding off because rent kept going up,” he said. “The building value is going up because Vancouver rents are going up. I was riding that value.”
Baranzano, who owns the center with his brother, said he has fielded hundreds of calls from prospective tenants.
“I’m not interested in discount stores,” he said.
“Because our holding costs are low, we’ve had the luxury of keeping it empty. It’s the same reason people hold onto their land. I’m waiting for the right anchor to come along.”
Kauffman Center is one of the few shopping centers in West Vancouver.
Baranzano said he is open to national and local retailers, but said he’s not looking to create another Uptown Village – a nearby area that has a wealth of smaller independent businesses, many of which are the ventures of first-time business owners.
He wants those with a track record of local success.
“It doesn’t make sense to me that you wouldn’t want to take advantage of every asset you have,” said Brian Boothe, co-chair of the Hough Neighborhood Assoc. “That seems like poor management…if your space isn’t rented, you don’t have any income.”
Kauffman Center sits on the border of the Hough and Carter Park neighborhoods.
“It’s disappointing every time we drive by and it’s still empty, and it’s disappointing to hear he’s chosen to keep it empty for this long,” Boothe said. “No one really understands why.”
The density is there, but the neighborhood’s income generally won’t support higher quality retail, said Pam Lindloff, associate vice president of NAI Norris, Beggs & Simpson, specializing in retail leasing and sales.
The right operator could be quite successful, she said.
But the longer the center sits empty, the tougher it may be to attract interest from retailers, said Gerald Baugh, manager of business development for the city of Vancouver.
“Activity begets more activity,” he said. “It’s been quite some time since the fire, and any time you’re redeveloping, the quicker you show activity, the more likely you’re going to get people excited. The longer you wait, the tougher it is to get something going on for a project.”
Baranzano claims filling the newer, smaller building is no problem, but said he would prefer to fill the anchor building first, then perhaps match the retailers to the anchor.
The anchor tenant may have a say in which retailers come into the secondary building or decide a theme for the center.
Once an anchor tenant is secured, Baranzano plans to upgrade the storefront of the larger building, where he hopes an upscale grocer will locate.
Midlevel grocers tend to look at areas where they will have about 5,000 dedicated shoppers who will spend about $40 to $70 per person per week, Baugh said. They look for an average household income of $50,000 within a one-mile radius.
National big boxes look for high traffic counts and “huge” demographics like those found off of Highway 14, 164th and 192nd avenues and Mill Plain Boulevard east of 205, Baugh said.
The anchor building is likely not large enough to attract a major grocer, and specialty grocers have not shown interest. Baranzano is hoping that Fred Meyer’s move from Fourth Plain to Grand Central (along Highway 14 at Grand Boulevard) will make Kauffman Center more attractive for such businesses.
Because there is such diversity in grocers now, Baranzano ought to really examine the area demographics and look at what would fit there before drawing up a marketing plan, said Jan Gee, president and CEO of the Washington Food Industry.
Boothe has heard the lease rates Baranzano is asking for the center are “ridiculously high for the area.” Baranzano would not disclose the rates. They will depend on the type of business and location they lease, he said.
Because of the mix of incomes in the area, Baugh said the end product is going to need to have appeal across the board – a business that will draw upper incomes but still be inviting to lower incomes.
Boothe said he’s crossing his fingers for a video store or grocer, as he and fellow neighbors don’t like the Safeway – one mile from Kauffman Center on Main Street – and would prefer to walk to something “a little alternative.”
The up and coming demographic for the neighborhood is young singles and families, and they’re tired of driving and having little choice, he said.
Familiar with the area, Baugh recommended a kid-friendly business, such as a bike or toy shop and one-of-a-kind local boutiques.
Once space in both buildings is leased, Baranzano is thinking of expanding the center.
The reconstructed building, which he said is “built like a bridge,” was constructed with a concrete roof that may be used for parking or a second story. Baranzano also is considering adding another building directly to the north, in which case, the rooftop parking would be especially handy, he said.
Baranzano is in the process of buying another retail center to renovate in Vancouver, which should close within the next two months, but he declined to discuss details. After he acquires the new property, he said he will begin marketing Kauffman Center full-time.
Lee McCallister, chairman of the Fruit Valley Neighborhood Assoc., said he certainly has questions as to the vacancy of the center, and said the neighborhoods are hurting for services.
“There used to be so many things there that the neighborhoods used,” he said.
His suggestions for beneficial uses included a beauty parlor, grocery that’s not a Minit Mart, drop-in medical clinic, decent restaurant or tackle shop.
“Anything,” he said.