Sears won’t give up its dead Kmart, so a Denver leader may play hardball

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A former K-Mart at Monaco Parkway and Evans Avenue, Dec. 13, 2017. (Kevin J. Beaty/Denverite) denver; colorado; denverite; kevinjbeaty; goldsmith;

A former Kmart at Monaco Parkway and Evans Avenue, Dec. 13, 2017. (Kevin J. Beaty/Denverite)

The former home of a Kmart store in southeastern Denver has been largely vacant for nearly five years, and Councilwoman Kendra Black is getting pretty sick of it.

The site at South Monaco Parkway and East Evans Avenue represents 12 acres of largely unused space along a busy commercial stretch. The 50-year-old building itself is more than 100,000 square feet.

"It’s a crumbling, deteriorated parking lot. People dump trash and old mattresses there. It’s a regular target for graffiti. There’s people camping around the property. The windows have been broken into," Black said. "It’s a total wreck."

What they've tried so far:

Black has been trying to convince the owners to sell since she took office in 2015 -- including by visiting them in New York City during a trip with Mayor Michael Hancock.

"The owners didn’t think the property was blighted at all," Black said. "They weren’t willing to discuss anything."

Developers have made offers on the property to both the owners and to Sears, but neither party is willing to "accept a market-rate offer," according to Black.

"Kmart, which is now owned by Sears, is continuing to pay the rent on it, even though they’re in financial trouble. Go figure," she said. Sears declined to comment for this article. The owners, J&W Holdings, could not be reached for comment.

Sears announced the closing of the Kmart late in 2012. It previously was a Sears, and before that it was... another Kmart. The building dates to 1967.

City staff also have talked to the property owners. "The city has had discussions with the property owner and Sears. Both would need to be part of any transaction. The parties involved have not yet come to an agreement on price," wrote Courtney Law, spokeswoman for the Department of Finance.

A former Kmart at Monaco Parkway and Evans Avenue, Dec. 13, 2017. (Kevin J. Beaty/Denverite)
Now, Black is looking at other options.

The situation is complicated by the fact that Sears Holdings still has a 62-year lease on the property, according to Black. Her goal, she said, is to get the property into the hands of a developer who will do something "meaningful" for the area.

"I think it would be an ideal location to have some mixed-use development that would include some housing, and then some retail and/or entertainment uses, some restaurants," she said.

She's exploring whether the city could force the owners to sell through the processes of condemnation and eminent domain.

"I don’t want to condemn it and do eminent domain. I don’t want to do it. But it’s an option if nothing else happens," Black told Denverite.

She has requested that the Denver Urban Renewal Authority study the property. If it was declared a "blight," the city could condemn the property and then move to purchase it through eminent domain. Eminent domain requires the property owner to sell at a price set by a judge.

That may not work. A draft report by DURA finds that the site may not meet the requirements for condemnation, which largely shuts the door on the idea of a mandatory sale. Black may ask DURA to reconsider that finding, she said.

If that doesn't happen, she may hit a dead end. The city cannot force the transfer of the land to another developer without the appropriate finding of blight. It could, however, forcibly purchase the land for a "public purpose," according to city staff.

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