Putting Unused Retail Space To Work

A class of Head Start pre-schoolers ready for story time in Hastings. (Photo by Jackie Sojico, NET News)
One of the many photos Deb Ross took while the Kmart was being renovated. (Photo by Jackie Sojico, NET News)
From the outside, Head Start in Hastings still looks a little like the Kmart it once was. (Photo by Jackie Sojico, NET News)
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March 4, 2014 - 6:30am

In 2010, empty big box stores accounted for 300 million square feet of empty retail space in the United States. In Nebraska, those big box stores have changed the state’s landscape, economy, and job market. Some Nebraskans are reusing these spaces in new ways to serve their communities.

If you visited one of the 14 classrooms at Head Start in Hastings, you would never know it used to be a Kmart stockroom 15 years ago.

The Head Start program moved here in 2001 after severe winds tore the roof off their old building.

“It destroyed the sprinkler system in the building and took an 8-inch pipe and split it and emptied about 8 inches of water in the rest of the other 16000 square feet of building. So basically everything we had was gone,” Executive Director Deb Ross said.

To make the space usable, Lexington divided up the inside of the old Walmart into individual classrooms and offices. (Photo courtesy Jen Wolfe)

It took two years for Head Start to buy, renovate, and move into the building. Outside, you can still picture a Kmart from the building’s shape. But inside, there’s no sign of the iconic blue lights, cash registers, and big red Ks that used to fill the aisles.

Instead, there are lots of toys and tiny furniture.  Ross designed the whole interior of the building. The building is a “one-stop shop” – it’s a place that provides multiple services like preschool, GED, and ESL classes.

For Head Start, the whole process of renovating the old Kmart was faster than building a brand new building. And it was cheaper. “It worked out to less than 4 dollars per square foot. To purchase and renovate,” Ross said.

Retail in Nebraska

Big box stores go empty for a couple reasons. Some, like Walmart, build a bigger supercenter down the street and abandon their old store. Some, like this Kmart, just go out of business. In both cases, it can lead to fewer retail jobs overall in an area.  

Eric Thompson, the director of the Bureau of Business Research at the University of Nebraska-Lincoln, worked on the Long Range Economic Forecast Report for the state of Nebraska. He noticed since 2001, retail sales in Nebraska have increased while retail employment has decreased.

“This could reflect this trend towards larger big box stores. One way to look at it is they’re more efficient and have fewer employees per dollar of sales,” Thompson said.

When a store goes out of business or moves to a new space, they leave behind more than just an unemployment problem. The building that’s left behind can often sit unused for years. In Nebraska, there’s about 1.1 million square feet of empty big box retail. That’s like eight Targets put together.

One reason the former Kmart building in Hastings was so cheap was because nobody else wanted it.

“It sat empty for 10 years. The community was always very happy to have it used and developed and updated,” Ross said.

Besides county offices, the Opportunity Center also houses classrooms for ESL, distance learning, and job retraining for Central Community College students. (Photo by Jackie Sojico, NET News)

Big retailers usually don’t want a former big box because the location isn’t heavily trafficked anymore.  And smaller retailers have a hard time figuring out how to adapt their business to so much space.

One-stop shops

But some Nebraska cities are part of a small trend across the country to reuse these empty buildings in non-commercial capacities, from churches to museums to community centers, like Head Start in Hastings. In Lexington, the city waited four years for someone to buy an empty Walmart on the south side of town. In 2008, the city made the decision to buy it.

The 60,000-square-foot building is now the Dawson County Opportunity Center. It houses a lot of stuff: classrooms for Central Community College, a pre-school, the Lexington Chamber of Commerce, the Department of Labor, and Dawson Area Development.

Having all these things in the same place isn’t a coincidence. They all work together. When the Tenneco Automotive plant in Cozad closed in 2012, the Opportunity Center played a big role in helping those laid off find work.  

“Tenneco was our second largest employer in the county at the time. There was about 500 employees and so when Tenneco announced that they were closing, I think everybody kind of scrambled,” said Jennifer Wolfe, executive director for Dawson Area Development.

On the inside, Dawson County Opportunity Center now looks very little like a Walmart. (Photo by Jackie Sojico, NET News)

The Opportunity Center provided free re-training and job hunting workshops to Tenneco employees through a federal grant at Central Community College. Dawson Area Development and the Chamber of Commerce contacted businesses in the area to let them know about the newly available workforce. And Wolfe says that collaboration paid off.

“We were able to absorb them for the most part in our existing labor force.  Actually our unemployment rate spiked just a tad during that time when those people were being transitioned from Tenneco. But for the most part, we’re just a tick above the state average for unemployment,” Wolfe said.

Two areas of the building are still unfinished. The Opportunity Center plans to convert one into an industrial training area and the other into a low-rent office space for new small businesses.

The exterior of the Opportunity Center, before and after renovation. (Left photo courtesy Jen Wolfe; right photo by Jackie Sojico, NET News)

“So those are our next two goals for the building and then after that we’ll be full,” Wolfe said.

While it seems like these huge stores would be hard to fill, these multi-agency organizations seem to have adapted. The Head Start in Hastings ran out of space in 2006 as they added more services and classrooms to meet the needs of their community.

“I thought we’d have space for 10 years. Well, it’s full. It was full in 5 years,” Ross said.

But that doesn’t mean they’ve stopped growing. As they added more services, they also needed to hire more staff. About 30 percent of Hastings’ Head Start employees started out as Head Start parents, like Roberta Karabel.

“I am an assistant teacher. And I got the job by being a parent here. I volunteered pretty much every morning before I had to go to work. Towards the end of the last year, I got asked to if I wanted to come on working as a Head Start employee, so I took advantage of it and now I’m here,” Karabel said.

Big box stores may have taken away some retail job opportunities, but places like Hastings Head Start and the Dawson County Opportunity Center have found a way to create new jobs and opportunities for their communities under the very same roofs.



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