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Red light
Blue-light specials next week
could signal Kmart’s goodbye
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Kim Bond of Enoch works as a cashier at Kmart.
Kmart plans to close by the end of March because
of structural problems, despite a promise from the
building’s landlord to pay for the repairs.
Approximately 60 people could lose their jobs.
ANNE McCONNELL / UNIVERSITY JOURNAL
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By TASHA WILLIAMS
UNIVERSITY JOURNAL
Despite commitment from the landlord to fix structural
damage to the Cedar City Kmart, the store is still scheduled
for closure by the end of March.
The U.S. Bankruptcy Court for Northern Illinois approved
Kmart’s 316 closures Tuesday as a step to help Kmart
emerge from bankruptcy.
The landlord offered to repair the cracked wall after
the company chose to shut down “under-performing”
locations Jan. 14. An out-of-state contractor estimated
the wall would cost more than $1 million to fix, said
Dick Flack, property management vice president for Barlow
Nielsen Associates, the building’s owner.
Mayor Gerald R. Sherratt said he was assured by Kmart’s
regional manger that the Cedar City store was profitable
but was slated for closure because of significant structural
damage to the store’s back wall.
The building’s landlord said the company is willing
to take dramatic steps to keep the store open.
“We have told Kmart that we will completely repair
the structural portion of the building at our expense,”
Flack said.
Susan Dennis, Kmart spokeswoman, said she was unaware
of the cracked wall. Nevertheless, as of Tuesday the store
was still listed for closure, she said. The Cedar City
store is not among the 10 stores whose status is being
reconsidered, she added.
“If it wasn’t on our list of negotiations,
then it’s probably not likely (that it will be saved),”
Dennis said. “Obviously, I’m basing that on
what information has been provided. I really couldn’t
speak about what would happen after we emerge from Chapter
11.”
When an outside firm begins clearance sales as early as
next week, it will be too late to stop the closure, Dennis
said.
Barlow Nielsen’s repair proposal was sent to Kmart’s
real estate office last week, but the office has yet to
respond, Flack said.
“We have not had any response from them,”
Flack said. “We have not heard an affirmative or
a denial; we wish we would.”
Flack said it’s obvious there is a sense of urgency
about the proposal.
“What makes the difference is that the agreement
has to be done before they would start the going-out-of-business
sales,” Flack said.
The only publicly known reason for closure is the wall,
Flack said. He said it would be logical for Kmart to accept
Barlow Nielsen’s offer if the wall is only reason
for closure.
“We have been told and understood that the reason
for the closure was not the fact that the store wasn’t
profitable,” Flack said. “It was a profitable
store. That’s why it makes no sense for them to
close it. If that’s not the reason, then it could
still close.
Until we hear from somebody we won’t know.”
Kmart declined a Journal request for financial data for
the Cedar City store.
But beyond lack of profits, competitive market, distribution
and lease were some of the things considered when closing
stores, Dennis said.
“In terms of profitability, a store could have been
considered marginally profitable and still be closed because
of other factors,” she said.
Flack said Kmart knew about the wall more than a year
ago and hired an out-of-state contractor who provided
the $1 million repair estimate. The building’s back
wall in the stock room is cracking, but Flack said he
is unsure of the exact problem and hasn’t seen the
repair plans.
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Barlow Nielsen Associates is willing to pay
for the structural repairs, even though building maintenance
was originally Kmart’s responsibility.
“We don’t want the store to close,” Flack
said. “We don’t want the vacancy of the shopping
center. It’s not going to be an easy one to replace;
there’s not a lot of people out there who are going
to be willing to take an 83,000-square-foot building.
“We’d like them to stay open, and not just selfishly,
but for the community,” he continued. “We think
the competition is really healthy. But in your community
when you’ve got limited retailers it doesn’t
help to see that store close.”
Flack said once Kmart declared bankruptcy, its lease agreement
changed.
When the court approved the closures Tuesday, the building’s
maintenance responsibilities reverted to the landlord, Dennis
said. Kmart is no longer bound by the lease.
The landlord is responsible for finding a new tenant, should
the store close, Dennis said.
Sherratt said he will help entice another store to fill
the vacancy if he can. Although Kmart’s closure is
unfortunate, he said people will gravitate to other Cedar
City stores.
“What I’ve learned is that if one goes down,
another goes up,” he said.
Sherratt and members of the City Council contacted Kmart,
asking the company to keep the Cedar City store open.
“We wrote a letter to Kmart and indicated that the
Kmart store here was profitable, and it had a good fan base
here in Cedar City, and that we’d be sorry to see
it go,” Sherratt said. “We also pointed out
that Cedar City is growing, and what is a good store now
could even be a better store in the future.”
Clark Krause, Cedar City director of economic development,
said the closure is unfortunate for the 60 people who lose
their jobs. Kmart has been a good employer, and if it closes,
it will affect Cedar City’s economy, particularly
by putting a dent in the city’s sales taxes, Krause
said.
“But the most important thing, though, is what it
does to your local community and the jobs you’re losing
firsthand,” Krause said. “That would be where
your heart would go out first.”
Surrounding businesses in the Cedar South Plaza are likely
to be affected, Krause said. Most stores are looking for
a “big-box anchor” like Kmart to share business
with, he said. While there are niche stores in the complex
that will continue to prosper without Kmart, the store brought
good energy to the complex, Krause said.
“If you lose somebody, you fill them with somebody
better,” he said. “Not that there’s anybody
better than Kmart. . . but as things happen, they happen
on a national economy level, they’re going to happen
on a local level. Things change. With that, you’re
still affecting those estimated 57 people. You never want
to put your people through that.”
Keeping in mind the tragedy of Kmart’s possible closure,
Krause said it is important to remember that retail is only
one part of the economy.
Other general merchandise stores featuring groceries, hardware,
lumber and other merchandise have been doing well in Cedar
City. In the last quarter, general merchandise sales were
up 6 percent, he said.
Despite general merchandise’s success, Krause said
he still thinks it’s unfortunate for Kmart to leave.
“You don’t want to lose anybody,” he said.
“You don’t want to lose jobs. You don’t
want to see your neighbor affected. But in a city this small
you will personally know people affected by any closure.”
But Krause said many other economic sectors that have prospered.
Manufacturing has had success, and now comprises 25 percent
of the jobs in Cedar City, he said. People generally only
pay attention to retail, since that is what affects them
most directly.
The economy works in a complicated cycle, Krause said.The
city recruits jobs that will pay higher wages. When people
begin to make more money, they will have more to spend in
retail. When demand is strong enough, retail will grow.
SUU students and Cedar City residents shopping Tuesday night
at the stores said they shopped at Kmart infrequently.
Jason Monroe, a sophomore political science major from Richfield,
and Ashley Washburn, a sophomore elementary education major
from Monroe, shopped at Wal-Mart Tuesday night. They said
when they’re at home they shop at Kmart because there
isn’t any other store, but when they’re in Cedar
City, they do the majority of their shopping at Wal-Mart.
“I don’t know if it (the closure) affects me
directly because I go to Wal-Mart, but it’s still
a loss of a job,” Washburn said.
Monroe said the first time he went to Kmart this year was
about two weeks ago to buy the jacket he was wearing Tuesday.
Steve Smith, a sophomore biology major from Salt Lake City
who also shopped at Wal-Mart Tuesday night, said he never
shops at Kmart.
“My very first year, I think I went there once,”
Smith said.
Kerrie Jones, a Cedar City resident and one of only two
shoppers at Kmart Tuesday night at about 9 p.m., said overall
Kmart is a “good place” but she doesn’t
shop there frequently.
“In all honesty, I don’t shop here that often,”
Jones said, “but I do feel bad for the employees.”
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South Hall
demolished
by summer
By ELIZABETH MILLER
UNIVERSITY JOURNAL
The state will fund a capital improvement project to create
a new facility at SUU in place of the South Hall, which is scheduled
to be demolished as soon as Spring semester is over.
“We requested to upgrade the building,” said Greg
Stauffer, vice president of Administrative & Financial Services.
“The state said because of age and condition, let’s
spend a little extra and build a fresh building.”
South Hall is scheduled to be demolished as soon as commencement
is over, said Dean O’Driscoll, assistant to the president
for university relations.
“While a building board was on campus, they saw South
Hall and any request to upgrade, they said no,” O’Driscoll
said. “They gave the money to replace the building.”
The right people saw firsthand how outdated the building was,
he said.
“We lucked out,” said Dialea Adams, Stauffer’s
administrative assistant.
President Steven D. Bennion said a new facility will be built
in its place.
“The funds came through a new category so the building
will happen quickly,” Bennion said.
There are three major projects that are in the works for improving
SUU. Funds for the South Hall project have no effect on the
new teacher’s education project or the Eccles Housing
Complex. All are from separate entities.
“There are numerous pots of funds that institutions can
access within the state government,” Stauffer said.
Capital projects are in categories based on the cost exceeding
approximately $1.5 million or costing
less than approximately $1.5 million. The South Hall demolition
and rebuild will be less than $1.5 million, so funding and approval
of the project was a quick process.
“Anytime you can expedite something, it is generally good,”
Bennion said.
SUU typically receives between $1 and $2 million each year for
capital improvements.
“We come up with a list of improvements that we would
like to use the money for,” Stauffer said.
Input from Plant Operations goes into the list of desired campus
approval projects. Then a campus planning committee, the Deans’
Council and the Board of Trustees approve the list
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and prioritize the improvements, Stauffer said.
A member of the Division of Facility Construction Management
and someone from the commissioners office came down in October
to check the items on the list, Stauffer said. Items on the
list totaled between $4 and $5 million.
Once the list has been viewed and prioritized, the DFCM decides
which projects to take care of. The South Hall was top priority
on SUU’s list and was viewed equally important by the
DFCM.
After the selection was made to rebuild South Hall, the Legislature
needs to give statutory requirements, and then SUU is ready
to start the project, Stauffer said.
Money for the teacher education building will come from a capital
facility fund, which is state appropriated money that goes through
a dozen different levels of approval before the project is accepted.
The approval process for capital facility projects is more involved
than capital improvement projects, Stauffer said.
“By the time the shovel hits the ground, you’re
mostly done,” he said, about capital facility funded projects.
The Eccles Housing Complex will be funded by donations and from
fees students pay to live in on-campus housing, called a revenue
bond.
Although financial approval has been granted for the South Hall
project, is unclear when the project will begin, as well as
be completed.
Stauffer said the architectural firm was just picked last week
and it met on campus Tuesday for the first time to examine typography,
see where utility poles are located, how the traffic flows,
and other necessary things to plan the layout.
The firm also met with current users of South Hall on Wednesday
to see what recommendations and desires they have for the new
facility. The design team and construction team will also meet
with Plant Operations and the users of South Hall to determine
the infrastructure.
There has not been a final design calendar planned yet, Stauffer
said.
“We’re going to do it, build it, get it down,”
O’Driscoll said.
Stauffer said the desired completion time for the project would
be by Fall semester, but Spring 2004 is more realistic. It’s
difficult to move offices mid-stream and expect the students
to transition after they have been in a ceratin room and seat
for six weeks, Stauffer said.
“We don’t turn down a project because of time,”
he said. “ It will be done within the fiscal year.”
The name of the new facility has not yet been decided, O’Driscoll
said.
It will be approximately the same size as the building it is
replacing, Stauffer said.
“If we keep wants and desires in check, we will replace
the existing blue print with one the same size, “ Stauffer
said.
O’Driscoll said they will do what they can with the money
they have been allotted.
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