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Tuesday, Mar 26, 2019
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Tampa’s last Sears survived bankruptcy closings, but Westshore Plaza is dropping Sears anyway

Sears’ long-foreshadowed bankruptcy filing Monday came with the blow that more than 140 of its remaining 700 locations would be closed in a bid to save the once robust and venerable chain of department stores.

But some locations not even on the list — like the Sears at Tampa’s Westshore Plaza — have already decided to give up on the 132-year-old retailer.

Washington Prime Group, which owns the Westshore store (the last Sears remaining in Tampa), negotiated to terminate Sears’ lease early and has taken ownership of the space with plans for something new.

"Tenants which have failed to evolve in order to satisfy an increasingly savvy consumer do not belong in our assets," Washington Prime CEO Lou Conforti said in a statement.

Sears Holdings identified 142 Kmarts and Sears stores that would close by the end of the year. The Chapter 11 bankruptcy court filing lists the nearest closing stores in Lakeland and Bradenton. But as Westshore’s plans show, that doesn’t mean unmentioned locations are safe. Just that they’re open — for now.

Analysts question if Sears can make it out of bankruptcy at all. Toys R Us and Bon-Ton Stores, Inc. were forced to go out of business after they initially filed Chapter 11 reorganization. Plenty of landlords have had plans running in the background, expecting Sears to eventually topple.

The Kmart in Pinellas County has already been advertised for redevelopment and Sears Holdings announced it was selling its real estate at the Gulf View Mall in New Port Richey last week.

Previous coverage: Two Tampa locations among dozens of stores being closed by Sears

The Westshore Sears is one of two dozen failing big-box stores Conforti’s property group said it owns and plans to redevelop within its shopping centers. The timeline or details of the local project haven’t been announced. Washington Prime spokeswoman Kimberly Green said the property group is still in negotiations.

"The redevelopment opportunity at Westshore Plaza demonstrates our commitment to the community," Green said in a statement, "while illustrating our mandate to diversify tenancy and strengthen this property as the dominant town center within the Tampa area."

In Kenneth City, the greater Tampa area’s last Kmart is open on 66th Street N. It’s owned by Seritage Growth Properties — a Sears Holdings spin-off created to turn dying Sears and Kmarts into thriving shopping centers.

"All the potential is in these urban locations like Westshore Plaza," said Colliers International managing director of retail services Jim Kovacs. "But 66th Street? Somebody’s going to need to get creative with that."

Kovacs said the Kmart is just far enough outside the retail hub on Tyrone Boulevard in St. Petersburg that it can’t be a part of it, posing a challenge for developers.

Seritage has already flipped a Sears in that part of Tyrone, too, at the Tyrone Square Mall. It’s now a Lucky’s Market, Dick’s Sporting Goods, Petsmart and Five Below. Shoppers now flock to the lot, often making parking hard to find.

Edward Lampert stepped down as Sears CEO as part of the bankruptcy plan, but he’s still the company’s chairman as well as chairman of Seritage.

Seritage did not immediately respond to request for comment about the future of the Kmart development, but a broker is listed with the property on the company’s website.

There are also properties Seritage hasn’t purchased that Sears Holdings is trying to sell — like the one valued at $2 million for sale at the Gulf View Mall in Pasco County. Avison Young’s Florida Capital Markets Group was retained by Sears to sell four properties in Florida, the largest being an Ocala distribution center.

An Avison Young spokesperson said that Sears will continue to lease with the new buyer and that Sears has not said it plans to close that location.

But analysts’ confidence Sears can stay afloat has dwindled. The company has lost more than $11 billion since 2011 and was last profitable in 2010.

It’s unlikely any buyer would go into the Pasco Sears without other longterm plans. A former Macy’s and JC Penney at the mall have already been razed to make room for apartments.

"It’s a very valuable piece of land," Kovacs said. "They they could do a whole redevelopment there — retail components with other mixed-use — that could make an impact for that community."

Avison Young is also selling the shuttered Sears at the Westfield Citrus Park mall. The University Mall in Tampa owns its Sears property, which closed earlier this year. That leaves four traditional Sears open in the region: stores in Westshore and New Port Richey, and ones in Brooksville and Brandon. There is also an outlet store in Pinellas County, and a few automotive centers throughout the area.

Related story: The future of Univeristy Mall in Tampa is that it won’t be a mall anymore.

A large portion of the stores, according to the court filing made in New York, could also be purchased in a bankruptcy auction by a Florida hedged fund controlled by Lampert.

Lampert had pledged he’d lead Sears comeback after buying the company for $11 billion in 2005. His hedge fund — ESL Investment — owns just under half of Sears’ shares and is also its biggest creditor.

Sears’ already decimated stock tanked further Monday, closing at 31 cents per share, down about 24 percent.

Lampert said in a statement the Chapter 11 process will give Sears "the flexibility to strengthen its balance sheet" and find the right size for its operating model to turn a profit.

"As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers," he said.

Contact Sara DiNatale at [email protected] Follow @sara_dinatale.

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