In the age of the internet the future of the American department store has grown increasingly uncertain.
Earlier this year, Toys "R" Us—a company with nearly 900 stores across the country— filed for bankruptcy. Kmart and Sears underwent another round of store closings—from nearly 1,600 last year, to just over 1,200 this year.
Whenever these so-called “big box” stores close, it can often stifle development in the communities they once served, and hurt the bottom line of nearby small businesses. BPR’s Davin Eldridge takes a look at the little-known phenomenon of “ghost box stores”, and how these stores impact Western North Carolina in their own small way.
It used to be that Holly Springs Plaza was the place to go shopping in Macon County.
Nestled prominently alongside U.S. 441, it had a little bit of everything—from big chain restaurants to a locally-owned pizza place, to a dollar store, a beauty supply shop, bank, nail salon and an Ingles grocery store. At the center of it all was the local Walmart.
But all that changed back in 2010, once it was announced Walmart would be closing its current location, so that it could open up a Supercenter a few miles down the road.
“It’s not as vibrant as it once was,” that’s town planner Justin Setser. “It’s not completely died out. There’s still an Ingles and a few little stores in there, but it’s not as vibrant.”
Today, the shopping center is a shadow of its former self. Over the years, the shops that were open there have either relocated (many of them now at the location of the 'new Walmart'), or eventually succumbed to the downturn in traffic and went out of business. Ingles Markets, Inc., purchased the property in August of 2015. So far, little has been done with any of the other vacancies in the plaza, outside of upkeep. To date, only the Ingles remains in operation.
Where the Walmart once stood is what some in economic development now call a “ghost box” store —or, just the big vacant site of a former department store.
Critics maintain these sites are a growing problem in the U.S. Also referred to as "black boxes", these stores are big and empty, and they're designed to accommodate a high volume of 'in-and-out' traffic. They're not designed to be a destination, so in the event there is need for, say, housing in the area, ghost box stores present planning and development professionals with an obstacle.
According to Julia Christensen, author of Big Box Reuse, whenever one of these big boxes opens, they require a great deal of development, infrastructure, and resources. So whenever one of them closes—whether it’s due to relocation, bankruptcy, or any other reason—the result is the same, and the ghost box store is born. In short, critics say ghost box stores impose blight, reduce property values and tax revenues, and serve as little more than an all around an eyesore for any city planner.
With Franklin's new Ingles now just weeks away from a highly anticipated grand opening, Setser is wary of not just one, but possibly two more Super Walmart scenarios for the town.
“We have another one, it’s not dead, it’s still very vibrant where Kmart is, but with all the concern of Kmart and Sears how they’ve not been doing well financially, there’s a concern that it can close and we can have two potentially the same way," Setser said.
Just a few years ago it was announced that Ingles was building a brand new Super Ingles down the road from the new Walmart. So, in turn, the nearest existing Ingles would have to close down—one located at Westgate Plaza, next to the local Kmart.
The new and improved grocery store has become the talk of the town. Just weeks away from its grand opening, it will provide an additional 130 new full and part time jobs, and will usher in Franklin’s very first Starbucks. But along with its opening, and the hundreds of jobs it promises to bring, Setser says the town of Franklin is haunted by the possibility of multiple ghost box stores--even if only for a brief period.
“As a town planner, I want to have a vibrant town," Setser continued. "These shopping centers in sense that are dead or dying, that is a major obstacles because it looks like a town doesn’t look like it’s a vibrant town. So engaging the landlords, see them, make sure that they keep the maintenance up on the facilities, keep them nice so other retail businesses want to go in there. That’s the issue with some of them.”
But the ghost box phenomenon isn’t as widespread in Western North Carolina as it potentially is in Macon County. There are just four others in the thirteen westernmost counties, and next door, in neighboring Jackson County, there isn’t a single one. According to the director of its planning department, Mike Poston, this is one instance where a county like Jackson is lucky to lack land that can be easily developed.
“We don’t have many big box retail stores, but I don’t know that there’s anything policy-wise that’s lead to there not being any vacancies. Obviously the challenge we have is finding an area big enough for a big box store, it’s going to be very limited. Much like it is with large scale industry or any large scale uses finding land. It’s not impossible but it’s challenging, especially with water and sewer.”
Sylva’s Town Manager Paige Dowling agrees that topography has saved Jackson County from ghost boxes, however she points out in an email that existing box stores can come with their own set of problems as well. She said that big box stores are more likely to appeal their tax values to try to get their valuation reduced, in order to pay less in property taxes.
This April, the town of Sylva found that the local Lowe’s had appealed its tax value to the county. Dowling explained that the reduced value resulted in the town having to reimburse Lowe’s for $20,000, since the home improvement chain paid its taxes while it was under appeal. This sort of thing imposes budgetary hardships on municipalities like Sylva, she added.
“This is a growing issue with box stores nationwide,” said Dowling in an email. “They try to appeal their value to pay less in taxes and argue that their store was built for a specific purpose.”
Next door to Jackson, there is just one ghost box in Haywood County. It’s a former Belk’s department store, and just like in Franklin, it’s owned by the nearby Ingles. Mark Clasby has been the director of Haywood’s Economic Development Council for the last fourteen years.
“It’s difficult. Ingles has certain plans. They don’t have to share those, necessarily, with me or anyone else, being a private organization. Personally, it’s a great location, and I would love to see some kind of retail in that building. I think it would be good.”
Clasby says Haywood is fortunate that it never holds onto such vacancies for very long. He feels ghost boxes can be a kind of double-edged sword - they’re indicative of growth, despite all their negative externalities. In this case, he points to Haywood’s six percent increase in retail sales over the previous year.
“I think it’s growth in the region, as well as the overall economy. There’s definitely interest as increased as the overall economy has improved since the great recession. Companies tend, for competitive reasons, to keep their plans secret, and not publicize them. They have the ability to do further expansion. I’m confident that they have a long range plan what they want to do with all that property, which I think will be a benefit to us.”
According to the city planners and economic development officials contacted by BPR News for this story, it is none other than the 'growth and desirability' of Western North Carolina which accounts for the overall lack of ghost box stores in the region. In short, none of these stores stay vacant for very long... At least for the most part.
Asked what its plans were for the multiple ghost box sites in Macon County, Ingles was not specific, however its Chief Financial Officer, Ron Freeman, said the company is sensitive to the needs of its customers, as well as those of local small businesses.
"We constantly evaluate our store base to bring the best possible shopping experience to our customers," he said. "As part of that process we try to find the best use for vacant properties, which can include securing complimentary tenants or re-purposing the building. This process takes time. We have been in most of our communities for a very long time, have made significant financial investments, and have provided a lot of jobs.
Back in Franklin, the town has already adopted some adaptive re-use policies, and is looking to the future for an answer to the ghosts of retail past.
*** AUTHOR'S NOTE: Critics maintain that ghost box stores can impose negative externalities on nearby municipalities. The online version of this article reflects more of the details and background information regarding Holly Springs Plaza in Franklin, NC. An earlier version of this story reported that Ingles Markets, Inc., purchased the plaza at the beginning of last year, according to officials from the Town of Franklin. It was actually purchased in August of the previous year, according to county tax records. ***