This is the golden age for retail in Idaho, whether that’s a chain store or an independent, downtown or in a mall.
National and regional retailers continue to discover the Treasure Valley, local merchants are thriving, downtowns are being energized by new construction and new visitors, and Boise Town Square and The Village at Meridian are 95 percent occupied.
Upheaval is the norm in the retail world these days, with legacy retailers disappearing, department stores leaving vast vacancies in their wake, and national media reporting the pending death of malls.
But the retail world in Idaho is proving nimble in finding new uses for vacancies and coming up with new ways to build shopping centers. This is leading to a number of interesting twists in retail. Large shopping centers without anchor stores are finding new life as paintball businesses, trampoline parks, libraries and churches move in next door to shoe stores and bookstores.
The new-format Albertsons at Broadway and Beacon Street has an upstairs bar and other innovations unseen elsewhere in the huge grocery chain. The Broulim’s supermarket in Ammon has a Korean barbeque booth. Boise Towne Square staged a Cirque Italia in its parking lot in July. Boise Spectrum in spring added the region’s first food hall, a concept capturing the nation’s fancy in the past 10 to 15 years.
Some new shopping centers veer entirely away from strip centers and big boxes. Others are mixing office and residential with retail.
Food trucks are innovative retailers on two fronts. A bit over 10 years ago, they were seen mostly as taco trucks at construction sites. Over the decade, they have evolved into mainstream high-end dining options that are now universal around the country. In the meantime, many Boise food trucks now have storefronts.
“That’s a wonderful example of operators starting out small, getting the business going, to go into a brick and mortar scenario,” said Holly Chetwood, retail brokerage services at Thornton Oliver Keller in Boise.
“I think that’s the coolest thing downtown,” said Brianna Miller, also TOK retail brokerage services. “These are people who have a cult-like following.”
Idaho retail flourishes because it has a captive audience and fairly limited options, unlike bigger metros with multiple malls that predominantly serve just a section of their cities. Any of Idaho’s malls have customer bases stretching hundreds of miles into neighboring states.
The retail hubs of Boise, Twin Falls, Pocatello and Idaho Falls draw shoppers from as far off as La Grande, Oregon; Elko, Nevada; Jackson, Wyoming; and West Yellowstone, Montana. They also serve the booming Idaho population.
“We’re seeing traffic increasing steadily at the mall,” said Darren Howard, general manager at Boise Towne Square, which for the past two years has supplemented shopping with various events including choir concerts and car shows outside. “There’s a direct benefit to be part of the community, to have people come in and utilize the property. A very large percentage of people say, ‘I’m at the mall, might as well check it out.’”
Idaho falls in line with the Pacific, Southwest and Mountain regions as the top three U.S. regions for retail net operating income gains, according to Trepp, a New York City commercial real estate research and analytics firm.
For the last several years, pundits have closely watched online shopping to see if it would damage traditional brick-and-mortar stores. So far, the online threat is still a ways off. The U.S. Census Bureau reported first-quarter e-commerce sales at 9.3 percent, though that is more than double the 4.1 percent in 2010.
“It’s not a competition with online,” Miller said. “They blend their sales online with the store. It’s about West Elm. It’s just a showroom (in downtown Boise). You have to order online.”
“We do see people who have online businesses that want to be brick-and-mortar,” said Kelly Schnebly, retail brokerage services at Colliers International in Boise. “It’s the opposite of stores that supplement by online. The big thing in retail is how do you create an experience. It can’t be something you do online”
Creating an “experience” is the buzzword that rings loudest in retail circles now, a concept unheard of in the 1970s and 1980s when malls had no food courts and, often, not even public restrooms.
The Village at Meridian brought an upscale mix of retail and office space to the Treasure Valley in 2013 with the equivalent square footage of a 10-story-tower that offers offices on one or two levels above the stores.
“We don’t have the traditional department store anchors,” said Hugh Crawford, The Village’s general manager. “The retail stores (typically found) between the anchors are the attraction. The formula we follow is ‘entertainment is our anchor.’”
The Village has the outdoor fountain and also entertains with fine arts, RV shows, the movie theater, restaurants and yoga on the green. The Village will keep drifting away from old-school retail with plans to add a hotel and housing.
Modern town square
Hawkins Companies, a Boise commercial developer in 23 states, pretty much abandoned 20th century retail concepts at its North Pointe and Bridges at Lakemoor mixed-use developments in north Boise and Eagle. Its intention was to lure people “off the couch and away from Netflix,” in the words of Beau Manwaring, senior leasing manager at Hawkins.
North Pointe presents a modernized town square setting with a main entrance boulevard flanked by the first four retail buildings built around a town square intersection. The buildings are small, 5,000 to 7,400 square feet, with limited angled parking in front and more parking in the rear.
Black Bear Diner is in a fifth commercial building off to the side and four more North Pointe commercial buildings are planned. None of the retail buildings will be more than 7,460 square feet.
Hawkins partnered with Bach Homes of Draper, Utah, to pair the retail with 323 units in 27 one-, two-, three- and four-story structures called Kensington Apartments at North Pointe. Neither Hawkins nor Bach had ever done such a mixed-use development.
“We’ve been very picky on our (tenants),” said Shaun Greear, Hawkins’ leasing director. “We’d like to see more service-type uses (in the next two buildings to be built). We also want to provide services for people living there.”
North Pointe already has a chiropractor, nail salon and masseuse among the fast food and fast casual dining.
With all the new retail centers emerging, perhaps the ripest opportunity for retail innovation and experimentation is with the largely vacant Nampa Gateway Center. It could be seen as hailing from another era; 2007 is a very long time ago in the retail world.
Nampa Gateway wins for location. Right on the freeway, the year-old Saint Alphonsus Medical Center Nampa I-84/Garrity is across the street, WinCo is at the edge of the center, the 256-unit Station Apartments at Gateway is neighboring to the south, and Meridian and Nampa have become the state’s second and third biggest cities.
Yet Nampa Gateway never recovered from opening a few months after the Treasure Valley Marketplace, which snagged all the ripe fruit from the retail tree. Nampa Gateway’s developers, DDR Corp. of Beechwoood, Ohio, held on to the property until finally selling it in November to RCG Ventures of Atlanta, Georgia.
“It’s going to take someone with the right vision,” said Chetwood, suggesting a redesign to the center’s layout, possibly multifamily housing in a portion of the center.
Retail loves Twin Falls
Retail is hitting all pistons in Twin Falls, a newly anointed metropolitan statistical area after reaching 100,000 residents in Jerome and Twin Falls counties.
The Magic Valley Mall took a punch in the gut when Macy’s and Sears announced store closures, but before Macy’s even shut down in March, Hobby Lobby announced it would fill Macy’s anchor space.
“The thing that surprised me was the speed that Macy’s filled up with Hobby Lobby,” said Dan Wilhelm, retail brokerage services for Thornton Oliver Keller in Twin Falls. “That shows the strength of the market. The interest is so strong, particularly at the canyon. There’s a lot of interest by Walmart at Blue Lakes and Washington.”
Department store closures didn’t discourage the mall’s Magic Valley Cinema from expanding from 13 to 20 screens, converting to luxury recliner seating and adding a large-format screen.
Suburban retail has been the no-brainer in U.S. retail for the past 40-plus years. Suburban retail just caught fire in Twin Falls in the past few years, and downtown retail has been red hot barely since last Christmas.
“I was just in Twin Falls. What they are doing downtown is really neat. It’s moving back to local retailers,” Schnebly at Colliers said.
Local retail instantly responded to the $20 million downtown redevelopment blitz that the city has undertaken over the past few years. The city entirely rebuilt Main Street and its sidewalks, conjured a sleek new city hall out of a half-century-old furniture store structure, and gave downtown Twin Falls its first gathering place for hundreds with the July opening of the Downtown Commons plaza.
“What’s really exciting is what’s going on downtown,” Wilhelm said. “City Hall really spurred downtown. There is a lot of boutique retail. The young crowd is finding a foothold in downtown and helping it explode. Twin Falls can draw young people now.”
Retail development heads east
Farther east, Idaho’s most expansive development is just getting started with the Northgate Development, a public-private collaboration among Utah developer Buck Swaney, the cities of Pocatello and Chubbuck, Bannock County and the Idaho Transportation Department.
A new freeway overpass set to open in October 2019, partly funded by Swaney’s group, will serve Northgate and give freeway access to northeast Chubbuck and the newest section of Pocatello.
Road work, curbs, gutters and the utilities for the first 100 acres were set for completion by the end of September, but ultimately Northgate is master-planned as a 4,500-acre community with as many as 10,000 homes.
Construction of the first 54 homes by Portneuf Development in a gated development was expected to start in September with the first 16,000-square-foot retail/office building possibly starting in November, said Don Zebe, a Colliers International commercial broker based in Pocatello and leasing agent for Northgate.
“We definitely will have commercial buildings going up in 2019,” Zebe said.
Swaney told the Idaho Business Review earlier in 2018 that he envisions the first 300 acres including a 60-acre lifestyle center/outdoor mall with potential office and retail; 65 acres for a tech/office park; a 20-acre medical campus, where Portneuf Health Trust plans to build a surgery center; and 150 acres of other mixed use, including single-family homes, condos and apartments.
“It’s going to bring opportunities to our community that we have never seen here,” Chubbuck Mayor Kevin England told the IBR in February. ”It will create jobs that will keep our children here.”
Farther east, the second and third largest shopping centers for eastern Idaho are in early and later phases of construction in a region already stocked with abundant retail, said Brent Wilson, commercial real estate broker in Thornton Oliver Keller’s Idaho Falls office.
Wilson looks at Sandcreek Commons, which since 2015 has brought Ammon a Broulim’s supermarket, Hobby Lobby, Cabela’s, Broulim’s and other retailers to Sunnyside Road and 25th Street.
“Adding 300,000 square feet in a market our size is very ambitious,” Wilson said. “The project is doing very well.”
Also on Sunnyside Road but at Interstate 15, local developer Matt Morgan started construction on a 100-room Holiday Inn hotel to launch his 44-acre Jackson Hole Junction mixed-use development. Morgan expects a second hotel and 18 retail structures with only three larger than 20,000 square feet and the bulk smaller than 10,000 square feet.
Meanwhile, Wilson in August represented the sale of two former Kmart properties in Idaho Falls and Ammon to U-Haul, the moving and storage company.
“Taking 200,000 square feet off the (retail) market is very significant,” Wilson said. “Otherwise, mid-box and big-box will have to race to the bottom.”
Northern Idaho has had less robust retail development since WinCo opened in Coeur d’Alene in November 2013.
“We haven’t had much in the way of new retail in a while, probably in the last five years,” said Chris Schreiber, associate broker at Spokane-based Kiemle Hagood’s Coeur d’Alene office. “We are waiting to see what will happen with the old Kmart (which closed in October 2017). We heard rumor of Hobby Lobby. It looks like it will be retail. The nice thing is it’s an existing building. It has a great location. My guess is it will be broken into at least two pieces.”
Retail was not the answer for the former Sports Authority at Coeur d’Alene’s Silver Lake Mall, where Philippines-based SPi CSM opened a call center in November.
Treasure Valley: 750,000 residents
Magic Valley: 220,000 residents
Eastern Idaho: 255,000 residents
Retail lease rates
Downtown Boise: $20/SF
Caldwell Blvd: $15/SF
Older strip centers: $10 to $15
New construction: $30
North Pointe: $25 to $30 per square foot
Idaho Falls – Grand Teton Mall area: mid-$20s
Idaho Falls – elsewhere: $10 to $12
Retail Projects of Note
Village at Meridian – 220,000 square foot expansion and remodel/expansion of movie theater
North Pointe – nine retail buildings, 323 residential units
Lakemoor – seven retail buildings, two office buildings and an 11-screen cinema
Costco Meridian – 165,000-square-foot store planned for Chinden Boulevard and Ten Mile Road
Albertsons Main Street – under construction at Fairview and Eagle in Meridian, same concept as new Albertsons on Broadway in Boise
Magic Valley Mall – movie theater expansion and renovation, Hobby Lobby filling Macy’s space
Twin Falls downtown – numerous local retailers opened this year
Northgate Pocatello – first 100 acres of mixed-use development starting on a potential 4,500-acre project
Sandcreek Commons Ammon – 12 retail structures have been built at eastern Idaho’s second largest shopping center
Jackson Hole Junction Idaho Falls – construction just started on a 100-room hotel at what will become eastern Idaho’s third largest shopping center