Murdoch's sets sights on former King Soopers building

Anchor store vacant for one year could come back to life

Posted 6/7/18

In the words of Councilmember George Teal, it's been one of the worst-kept secrets in town. For several years, according to a town document and a company representative, Murdoch's Ranch & Home …

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Murdoch's sets sights on former King Soopers building

Anchor store vacant for one year could come back to life

Posted

In the words of Councilmember George Teal, it's been one of the worst-kept secrets in town.

For several years, according to a town document and a company representative, Murdoch's Ranch & Home Supply has wanted to break into the Castle Rock market.

And true to speculation, the Montana-based chain — which operates 31 stores spanning five states — has closely eyed a location in the Milestone Center at 188 Founders Parkway. The next nearest Murdoch's locations are in Parker and Highlands Ranch.

On June 5 the town council approved an incentive agreement to help Murdoch's move into Castle Rock. The deal entails a 25 percent sales tax shareback for Murdoch's, not to exceed four years or $300,000, and requires they sign a 10-year lease at Milestone.

The town estimates Murdoch's sales would generate $240,000 of net taxable revenue for Castle Rock in its first year.

The approval did not come without scrutiny from town council, but the need to fill a vacant anchor store at the shopping center ultimately trumped concerns. Council approved the deal in a 4-2 vote with Mayor Jennifer Green and Councilmember Jason Bower voting no.

Milestone Center is home to an assortment of shops, including a liquor store and dry cleaners.

However, its anchor space, a 70,000-square-foot box store, has stood vacant since May 2017, when King Soopers moved roughly a mile away to its new location at the Promenade, becoming a bustling supercenter complete with a deli, grocery store, clothing, home goods and more.

Mark Challis, who owns a Papa Murphy's in the Milestone Center, said he heard talk well before King Soopers moved that Murdoch's may replace it.

Still, a year went by. The former grocery store and its parking lot served as little more than a ghost town since King Soopers' departure, which took with it the traffic an anchor tenant provides neighboring businesses of any shopping center.

Over the seven months remaining in 2017, sales in the area declined more than 11 percent. The center lost several tenants, including a Massage Green, Mattress Firm, Le Peep and Starbucks.

“We knew it would not be good for business. We were disappointed,” Challis said of King Soopers' move, adding he owns eight Papa Murphy's locations in the south metro area. With King Soopers, the Milestone Center was one of his busiest locations.

“It went from being incredibly busy to the next day having an empty parking lot,” he said.

Same-store sales still managed to grow by 20 percent at Papa Murphy's, Challis said, but that didn't guarantee the store's future.

“We know that we can never reach our potential in that particular location without a store anchor being there,” Challis said. “People have to become far more intentional about visiting our location.”

Under the incentive agreement struck June 5, Murdoch's would fill 50,000 square feet of the old King Soopers, leaving the remaining space for a to-be-determined tenant.

The cost of turning a former grocery store into a Murdoch's, or any other retailer, is significant, said Marcus Notheisen, vice president of the Castle Rock Economic Development Council, during the June 5 discussion with council.

Namely, the grocery store's air conditioning ran through its coolers, not a traditional HVAC system. That would need to be replaced, in addition to other changes. The work is one reason Murdoch's requested an incentive.

“I would be remiss if I didn't mention that there are drawbacks,” Notheisen said in his closing comments on the agreement.

Castle Rock already has a saturated retail market and stores with similar goods and services to Murdoch's, he said. Additionally, about 500,000 square feet of space is still expected to be built at the town's Promenade shopping center, Councilmember Bower said.

Mayor Green noted the property's previous owner, Kroger, in May sold the old King Soopers building to a company owned by Gary Dragul, who was recently charged with nine felonies related to his conduct in the real estate industry.

Although the town's deal would be with Murdoch's, Green said, the connection left her “really nervous.” A spokesman for Murdoch's told Green the company had similar reservations, but still wanted to proceed with leasing the space.

Prior to voting against the agreement, Bower questioned why the recently sold King Soopers store was not first listed for sale publicly, allowing the free market to potentially fill the space.

“I would rather see a property like this be put up for sale before we subsidize it,” Bower said.

But with enough council support, the agreement got the green light. A timeline for Murdoch's to move into the store was not immediately clear.

Those are questions Challis said he still wants answered, but regardless, he's hoping Murdoch's can bring life back to Milestone Center.

“I'm not going to say it will be the same as having a King Soopers, but boy, it will be nice to have a well-known brand,” Challis said. “I'm actually excited about their coming.”

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