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Retailers' Loss of Revenue Hammers City and State Budgets

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USA Today has a story exploring the implications of troubles in the retail sector. It looks at potential shortfalls on City and State Budgets, as well as exploring what could happen to shopping centers that fail during this downturn. Also, the chart in the story is adapted from the running list of closures we've been posting to this blog.
He predicts up to 3,000 shopping centers, mostly smaller strip centers but some larger malls, will close this year.

"If that economic activity is taken out of the community, that's a tremendous blow," says Bieri, president of The Bieri Co. in Detroit.

So what to do with all the empty retail space, especially the vacant so-called big boxes dotting the landscape with the liquidations of Linens 'n Things and what's in progress at Circuit City?

Kohl's recently announced it will take over the space in several of the liquidated Mervyns stores. In Connecticut, Texas and elsewhere, empty big-box stores are sometimes turned into haunted houses at Halloween and other kinds of seasonal stores.

Some city officials talk of turning them into community centers, but few communities have the money to run them now that their retail and residential tax revenue is so depleted. Other areas have tried subdividing them into spaces smaller merchants would use, almost like a bazaar.

Retail brand and design expert Ken Nisch jokes that given their size, some could become "evangelical churches," but short of that, the best hope for many may well be the seasonal store. Or they can be taken over by one of the only retailers doing well these days — Wal-Mart.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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