Nampa's Karcher still angles for an anchor

By Lora Volkert

IDAHO BUSINESS REVIEW

When Emporium folded last spring, vacating a 77,000-square foot anchor storefront in the Karcher Mall, it exacerbated the mall’s already high vacancy rate.

There are 172,693 empty square feet in the 466,000-square foot property, according to a Gunstream Commercial Real Estate report published in winter.

Two major store chains made offers in recent years to the mall’s owner, DLC Management Corp., which might have eradicated the problem if they offered enough money.

Steve Ifshin, DLC’s principal, said that before Home Depot announced plans to build next to the Nampa Spectrum entertainment center, and before Costco staked out a lot by the planned Karcher Interchange and Midland Boulevard for a 2006 store, both chains expressed interest in taking space at Karcher.

Other big box chains, which Ifshin wouldn’t identify, made offers too, and continue to do so. Ifshin said he would still take a deal from a big box that offers enough money.

“They all came to us first. We turned them all down,” he said. “They all have different schemes as to where they wanted to go on the mall property, and they all presented woefully inadequate economics for us.”

The stores’ projected size was the basic problem.

“Some wanted to take down part of the mall,” he said. “I think some of them had unrealistic expectations as to what they could do with the mall.”

Ifshin said the mall’s 60-plus acres are “the best property to be on” relative to the proposed interchange and Nampa-Caldwell Boulevard.

“But since there are tenants in the buildings, that’s a completely different economic picture,” he added. Karcher is able to lease space to the tenants it has at much higher rates than the big box chains could find at nearby vacant lots. While a store with smaller space requirements might find it more feasible to operate in the mall, the big box stores would have taken up so much leased or leasable space that the chains preferred to build elsewhere.

Although the former Emporium space remains empty, DLC Management is still collecting rent. An investor called the Alamo Group purchased several of Emporium’s leases during the bankruptcy proceedings, among them the Karcher lease. Alamo pays rent to DLC while looking for a tenant to sublease it.

Beyond that, Ifshin said he has prospects for tenants, but gave no details. When asked if the mall is profitable, he declined comment.

If a big box store were to locate in Karcher, it would dramatically change the character of the mall, which dates from 1965. But the mall’s character is already changing.

Two of Karcher’s most recently added tenants – Ross Dress for Less and Big 5 Sporting Goods – are in buildings adjacent to but separate from the mall, much like a strip mall. DLC owns 40 strip malls, and Karcher is its only indoor mall, but Ifshin said he wasn’t intentionally changing Karcher Mall into a strip mall.

“It’s just the way the deals were presented to us,” he said. “That’s the way the tenants wanted. We thought that we needed to make those deals.”

Ifshin didn’t express optimism that the proximity of Home Depot, Lowe’s and Costco will help his company’s shopping center.

“I don’t know if there’s any synergy” between the mall and the home improvement and grocery chains, Ifshin said.

“They fill up their car and they leave,” he said of shoppers at big-box stores, such as Lowe’s, which opened in January across Nampa-Caldwell Boulevard from Karcher Mall’s main entrance.