A full-service grocery store for Tacoma's downtown core is just a few signatures away.
Dan Putnam said this morning that he and his partners, owners of Pacific Plaza at 1250 Pacific Ave., have a lease agreement with Tyler Myers of The Myers Group, a Whidbey Island-based company. The group owns and operates four other grocery stores in Washington, including the Kress IGA near Pike Place Market in Seattle.
After the lease is signed, Putnam said the 16,000-square-foot store will open on the south side of Pacific Plaza in May or June. When it does, the building that was redeveloped through a private-public partnership with the City of Tacoma will be almost fully leased. A 2,800-square-foot retail space on the north side of the building is all that's left.
The as-yet-unnamed store will be similar in size to the Kress IGA, Putnam said. The Kress IGA has operated in the basement of a historic building since 2008. According to its website, almost half of the store is dedicated to "grab-and-go" prepared food. The store also has organic produce, meat, baked goods and frozen food.
The Myers Group operates three additional IGA stores, in Camano Island, Ocean Shores and Snoqualmie. It also owns hardware stores and gas stations, as well as providing real estate and property management services. According to its website, the group employs 350 people.
Myers wasn't immediately available for comment. But he told the Puget Sound Business Journal in 2008 that his company is able to compete with major grocery chains because it chooses its markets carefully. "All the locations are smaller, tight-knit communities where an independent grocer can come in and meet the needs of an underserved area," the paper reported.
The terms of the lease reflect shared risk by Myers and the Pacific Plaza ownership group, Putnam said. The building's owners will pay to finish the space. The lease is for five years, with five additional five-year options to renew. (Typical commercial leases are 10 years with five-year options.) And Putnam and his partners have devised a rent structure that ties the rental rate to the grocery's sales volume.
"From a financial side the grocer isn't a big plus," Putnam said. "If it does well, we'll get decent rents. If not, we won't cover our costs. But from a civic pride point, it's the best lease we have in our building."
"In my heart of hearts, bringing a grocery store to downtown Tacoma is one of the biggest retail wins in memory," he said. "I know from that store and the activity, if we really get the foot traffic, it will fill some of the dark holes around us as the economy rebounds in the next couple of years."
Putnam said two market studies show the potential for a store in Pacific Plaza. Supervalu, a wholesale food distributor who has a warehouse in Tacoma, did the first. Then Myers did his own, Putnam said.
"The studies came in very similiar," he said, though he didn't have the numbers in front of him. "We hope to do better than the study. I'm hoping downtown residents and workers really support this store."
The census tract that includes Pacific Plaza shows a population of 1,400. By comparison, the census tract around the Seattle Kress IGA shows a population of about 4,200 3,400. Census tracts are designed to be relatively similar.
Putnam said the studies were conservative.
"I think the studies have underestimated the worker-customer," he said. "The second study indicated only 20 percent of volume would come from workers." He thinks they can do better than that.