Some local businesses are eagerly anticipating the arrival of Costco and Lowe’s in a 700,000-square-foot urban redevelopment project, but others are cautious about the effects of the big-box retailers on their businesses.
While the project will bring wider roads, improved access and new retail opportunities, businesses along the North Nevada corridor are mixed in their review of the project, which the city hopes will revitalize a “blighted” area.
Doug Groninger, second generation owner of Groninger Concrete, said the development will create a better gateway to downtown.
“North Nevada has been an eyesore for a long time,” he said. “It’s just not attractive right now.”
Groninger said his business will not benefit from the retail development because it relies on commercial customers.
“We don’t work from drive-bys,” he said. “But the name recognition is always nice. Redevelopment of the area will bring more people.”
The new development will be popular for new business, Groninger said.
“I expect it to lease up fairly quickly,” he said. “Central locations are hard to come by – especially build-to-suit. The anchor stores will draw first, then smaller retail stores will follow. People in downtown and Pinecliff have been waiting for some of these services.”
But Ace Hardware owner Derek Barnes is concerned. He owns two stores, one at the Bon Shopping Center and the other at Garden of the Gods and Centennial roads, which could be affected by Lowe’s arrival in west Colorado Springs.
“We’re a niche business, a neighborhood store,” he said. “We don’t really make a difference to Lowe’s – we don’t even register on their radar screen. But I do think that people will continue to come to Ace, if they want a hometown hardware store instead of a big-box retailer.”
Barnes said people who “vote with their dollars” could see higher prices as a result.
“I’ve watched Colorado Springs in the past 25 years, and I’ve seen the push for big-box retailers,” he said. “We used to have True Value Hardwares here, and they are all gone. Once Home Depot and Lowe’s push the local businesses out, they can raise their prices. They have, according to their annual reports. They’ve increased their profit margins by 10 percent over the last five years. There’s no competition.”
While not in direct competition with Lowe’s, the Harley-Davidson dealership is looking forward to completion of the project, which includes a state effort to improve access from Interstate 25. Because construction on the Colorado Springs Metro Interstate Expansion project includes a six-week closure of the off-ramp on north I-25, Jim Ware said the dealership is going to suffer.
“Ultimately, we are very excited about the development,” he said. “When it’s all done and everything is working, we’ll benefit from additional traffic. But now, the frontage road is torn up, and they’ve limited access from I-25. Our customers are having a hard time getting to us.”
Ware said that the inconvenience is short term, and the long-term benefits of the development will help the dealership.
“It’s our flagship store,” he said. “And we know that once people start coming in for the big-box stores, they’ll come here, too.”
Officials at the University of Colorado at Colorado Springs are looking forward to the development, saying that it leads the way for school expansion.
“It’s a good thing for the community; it’s a good thing for the school,” said Dave Schnabel, director of facilities at UCCS. “For 25 years, the area has been under the eye of various planners, and nothing’s really happened. We’re excited about the improvement, because it lets us develop our property on the east side of North Nevada.”
Schnabel said that rapid growth in enrollment has left the main campus squeezed, and developing on the east side of North Nevada is the university’s only option.
“We expect our enrollment to go from 7,500 to 9,000 by 2012,” he said. “So, we’re looking forward to additional businesses and redevelopment of the area. The retail, large big box anchors will provide student employment opportunities they currently don’t have. There will be new businesses, new places to go that they don’t have right now.”
With Costco’s entry into the Colorado Springs market and Lowe’s signed on for a third store, the development at North Nevada is moving forward, said Kevin Kratt, owner of Kratt Commercial Properties and one of the developers creating the project.
“It’s an underserved area,” Kratt said. “It has its own market and it’s a growth area. The people in the western part of town don’t have anything like this. We’ll have a little bit deeper market penetration because of I-25 – it’s accessible at two interchanges.”
While stores have signed agreements to anchor the site, Kratt and his partner, Tom Cone, still have work to do, including finalizing the purchase of some of the 90 acres to be used in the development.
“We have the green light so far,” Kratt said. “We’re moving ahead with purchasing the land, and working to finalize the development. We’re still recruiting other businesses as well.”