It’s been nearly 11 months since Kroger, the parent company for QFC, announced they were closing their Wedgwood and Capitol Hill stores. Two stores that Kroger claims were “underperforming” but whose closure was “accelerated” due to the city’s “hero pay” mandate for grocery workers. Seattle was one of several cities where Kroger closed stores and blamed “hero pay” legislation. Whether or not their stated reasoning was true is for others to say. But, the store did close on April 24th with a nice send-off to QFC staff and the store has basically sat empty – apart from fixtures – since.
“So, what’s going on with QFC?” is something we get asked a lot since the news initially broke. We’ve been providing monthly updates – or at least what we know – at our board meetings (via Zoom and all are welcome!). But, we haven’t yet provided an update on our website. Largely, there’s very little to update people on, but perhaps that’s an update in itself.
What we know and think we know…
Kroger has a lease still for the property for approximately 2-ish years with a 5-year option. Perhaps it’s safe to assume that Kroger is unlikely to take up their 5-year option? Assuming they do not take up their option, the store can theoretically sit unused for 2-ish more years until Kroger’s lease expires. Yes, the property owner could terminate the lease with Kroger, but since Kroger pays a significant share of the rent for the entire “Wedgwood Center,” which extends from QFC to Homestreet Bank, the property owner is understandably not motivated to do this. Yes, Kroger could terminate their lease early too, but we believe there would be a financial penalty associated with that. Therefore, the reality (Reality 1) where QFC sits empty for 2-ish more years is one we should be prepared for.
Other realities that we should be prepared for are:
- Reality 2: The site sits until another grocer makes an offer to the owner to lease the space, hopefully sooner than 2-ish years. However, this reality is unlikely (conjecture to follow) as the building is pretty small for some grocers and the age of the building means it is likely near the end of its designed life.
- Reality 3: The site sits until another grocer makes an offer to the owner to bring grocery to the site contingent upon significant repairs and/or a new building being built. However, this reality is unlikely (conjecture to follow) as the QFC store site is actually only part of the “Wedgwood Center” property spanning from NE 85th St to NE 82nd St. Building a new grocery store at the QFC site when the remaining Wedgwood Center (Homestreet Bank-Wedgwood Broiler) remain untouched seems unlikely from a financial, land use, and real estate perspective.
- Reality 4: The loss of the anchor tenant from the Wedgwood Center and the high appraisal (e.g., expensive property taxes) forces the property owner to either redevelop the entire property or sell the site to be redeveloped. While this would be a change for Wedgwood, we should be prepared for this as a reality as well.
While we have spoken to the property owner several times, they have never told us what they plan to do. The conjecture provided above is just that based on our understanding of the situation.
A few realities we don’t believe we need to prepare ourselves for.
- At this point, we don’t believe we need to prepare ouselves for a future with no grocery service at the site. In all of our communications with the property owner, we have been explicit that we want a grocery at that site under every scenario, whether it be a replacement grocer who fills the current building or a grocer as the anchor tenant of any future redevelopment. For their part, in all that they have shared with us, all scenarios described to us by the property owner included grocery service.
- At this point, we don’t believe we need to preapre ourselves for a future with a Red Robin. This was apparently a rumor on Nextdoor. While the property owner has never explicitly said Red Robin wasn’t coming to that site, we are aware that they have no agreement with anyone except their current lease with Kroger. Further, Red Robin doesn’t seem to fit in any of the potential realities we describe above.
To prepare for the four potential realities described above, we have been regularly communicating with the property owner and conveying a clear message (we actually started this communication prior to the QFC announcement in anticipation of this kind of change). Our message has been that whatever happens, we want grocery service to return to the site. Further, if the situation forces the owner or future owner to redevelop the Wedgwood Center, we are clear that we want a grocery store to be the anchor tenant. And if the Wedgwood Center site is to be redeveloped, we intend to be constructive and supportive of any redevelopment that is consistent with the Future 35th Ave NE Plan. We also hope to be a collaborative partner to the extent possible to maximize the potential benefits and mitigate the potential impacts to our community.
Whatever happens, grocery service isn’t likely to return to the site for a couple of (or more…) years.