News

ASPI Group Wanted to Help the Community

Posted on Nov 30, 2015

Marshalls Opened in The Moses Lake Town Center"Why don't we help out the community by doing this kind of project?" says Kim Foster of the ASPI Group's decision to take the old K-Mart building and turn it from an eyesore into a premium retail location called the "Moses Lake Town Center."

The ASPI Group is a real estate development company with large investments in Grant County centered around the Grant County Airport. They have three main holdings totaling approximately 700 acres, Foster explains, including the ASPI Technology Park where SGL/BMW and Fuji Chemical are located, the ASPI Air Park near the airport runways, and the ASPI Commerce Park, mostly along Patton Boulevard that is zoned for light industrial and distribution.

After a project with Boeing to bring more industry to Grant County failed, Foster says, one item of feedback was the lack of retail in the area for potential employees. Grant County has a lot of positives for industry, Foster says: the airport, the low electrical rates, the relatively low land costs, and others. But lack of retail is a negative.

According to Foster, Moses Lake doesn't have enough people in the "trade area" to attract retail through traditional methods. He explains that retailers look at the population and income demographics of an area, and project the kind of revenue they can expect to make there. Then they calculate how much rent they can afford to pay. And developers will calculate what, after all the expenses of constructing a building, what kind of rent they have to charge. The problem in Moses Lake was that the rent needing to be charged was higher than the rent retailers were willing to pay there.

This was made worse by the recession of 2008, Foster says. Retailers may plan to open twenty stores in a year, he explains, but with the recession, there might be empty retail spaces in Seattle or San Francisco with lowered rents. Retailers would go there, first, and Moses Lake would "drop off the radar." But, Foster says, if the rent was low enough in Moses Lake, retailers might take a risk on going there.

Because ASPI bought the K-Mart building "out of K-Mart's bankruptcy" and because of their "unique cost structure," Foster says ASPI was able to have a "rent structure" that was able to attract retail businesses.

In addition to the rent, ASPI worked hard to sell the community to the retailers. They showed that Grant County has a diversified economy. Foster used the example of a town comparable in size to Moses Lake that might have a Ford transmission plant where most everyone works. If Ford moves that plant to Mexico, retail in that town will suffer. But in and around Moses Lake, Foster says, there's a diversity of companies so if maybe one is having a bad year, another may be doing well. And that, according to Foster, helped make Moses Lake more appealing to retailers. "There's a vibrancy that retailers are impressed with," Foster says. For retailers, the computer may say it's marginal to come to Moses Lake, but once they see our story, "it's worth taking a shot," Foster explains.

"We've taken a negative and turned it into a positive," Foster says. "We're not long-term commercial developers, but we wanted to fix this." Now when industrial companies look at Grant County, they will see there is more retail for their employees and less need for them to drive to Wenatchee or Tri-Cities, Foster explains. Also, the stores will generate tax revenue for the city and county.

"I think the Marshalls will be very exciting," Foster says. Foster explains that the interior of the store is "first class." Also, he says, other retailers use Marshalls as an indicator of if they should enter a community. If Marshalls is doing well, other retailers may be attracted to Moses Lake. Foster points to the WinCo that is going to go in next door to the Moses Lake Town Center as evidence that the Moses Lake Town Center is helping to attract more retail. Foster says the three stores that opened earlier are seeing strong results and that word is getting out. The Moses Lake Town Center may "seed" more retail. "Definitely becoming the retail ground-zero in Moses Lake," Foster says.

"The typical developer just builds boxes and rents them out," Foster expains. But, ASPI Group is "marketing Moses Lake around the world."

It was better to divide the large K-Mart building into smaller retail space than try to rent out the whole thing to one retailer, Foster explains, because the store doesn't meet current standards for 100,000 square foot retailers. That, and nationally, retailers are "downsizing" their retail store spaces, Foster says. So dividing the building into four retail spaces made more sense. ASPI group is currently in negotiations to fill that fourth space with "a couple of great companies" and will pick one "soon." Once that fourth space is filled, Foster says, there will be "dozens and dozens" of jobs at the Moses Lake Town Center.

Foster says that shortly after the ASPI Group bought the K-Mart building, they were approached by someone wanting to put a data center in the building. But they decided that, no, retail development would be best for Grant County. "This is a one-off for us," Foster says. "Can we take that and do something with it?" Foster says, "Can we heal the derelict eyesore, increase retail, and help with industrial recruitment?" Foster is hoping that more retailers will see that their traditional models give low numbers for the Moses Lake area and will be willing to come here based on the success of the retailers at the Moses Lake Town Center.

ASPI Group has the contacts to be able to talk to retailers, Foster explains, and that helped with recruitment. "It's been a fun project," Foster says.