Grocery store likely coming to downtown Tacoma

The elusive grocery store for Tacoma’s downtown core is one step closer to being crossed off the wish list.

The owners of Pacific Plaza at 1250 Pacific Ave. have a lease agreement with The Myers Group, a Whidbey Island-based company. The group owns and operates four other grocery stores in Washington, including the Kress IGA near Pike Place Market in Seattle.

One of Pacific Plaza’s owners, Dan Putnam, and Myers Group President Tyler Myers emphasized Tuesday that while they have an agreement, a lease has not been signed.

“These things take time,” Myers said. “That said, we would love to be in Tacoma. We have experience with urban environments.”

Putnam said the 16,000-square-foot store would open on the south side of Pacific Plaza in May or June. If it does, the building that was redeveloped through a private-public partnership with the City of Tacoma would be fully leased except for a 2,800-square-foot retail space on the north side.

With a new Link light rail stop behind Pacific Plaza on Commerce Street, the store would be connected to the University of Washington Tacoma and the planned apartments in the Elks-McMenamins entertainment complex.

Myers said that even though the store wouldn’t be as large as a traditional supermarket, it would have products in every category and would be stocked for office workers, residents and downtown visitors.

Finalizing a lease with a grocer would be a strong move for Pacific Plaza’s owners after a controversial moment in December 2009, when they leased half of the ground floor to the Tacoma office of the state attorney general. Under the owners’ initial agreement with the city, the first floor was to be entirely retail.

But economic pressures tied to the recession led the owners to ask the City Council for approval to lease half the ground floor as office space. Over the protests of many downtown small-business owners, the council allowed the lease.

Putnam said Tuesday that without the state office lease, an agreement with any grocer wouldn’t be possible.

The grocery lease terms reflect shared risk by Myers and the Pacific Plaza ownership group, Putnam said. The building’s owners will pay to finish the space. The lease is for five years, with five additional five-year options. (Typical commercial leases are 10 years with five-year options.) And Putnam and his partners have devised a rent structure that ties the rental rate to the grocery’s sales volume.

“From a financial side the grocer isn’t a big plus,” Putnam said. “If it does well, we’ll get decent rents. If not, we won’t cover our costs. But from a civic pride point, it’s the best lease we have in our building.”

“In my heart of hearts, bringing a grocery store to downtown Tacoma is one of the biggest retail wins in memory,” he said. “I know from that store and the activity, if we really get the foot traffic, it will fill some of the dark holes around us as the economy rebounds in the next couple of years.”

Downtown Merchants Group president Whitney Rhodes, who as a private citizen spoke against the attorney general’s lease, said Tuesday that she was glad a large retailer might be on its way.

“I think that’s the ideal thing (the city was) aiming for with that space,” she said. “That would not have been retail if the city hadn’t gone into public-private partnership.”

“The addition of the light rail stop on Commerce Street and the anchor tenant will really help that area become a thriving urban walkable neighborhood,” she added.

The City of Tacoma defines downtown to include the Stadium, Dome and Brewery districts. Census data indicate about 12,000 people live downtown, and the city and the Tacoma-Pierce County Chamber estimate about 30,000 people work there.

Putnam said two market studies show the potential for a store in Pacific Plaza. Supervalu, a wholesale food distributor that has a warehouse in Tacoma, did the first. Then Myers conducted his own, Putnam said.

“The studies came in very similar,” he said, though he didn’t have the numbers immediately available. Putnam said the studies were conservative.

“I think the studies have underestimated the worker-customer,” he said. “The second study indicated only 20 percent of volume would come from workers.” He thinks they can do better than that.

“I’m hoping downtown residents and workers really support this store,” he said.

The grocery would be “very convenience-oriented,” Myers said. “People could do their shopping before they get in their car, rather than get in the car and make another stop.”

Getting in a car and making another stop on the way home is how Stadium Thriftway owner Mike Hargreaves thinks some of his customers arrive. Hargreaves has spent several million dollars in the past year expanding his store on North First Street near Wright Park, and he’s not happy with the idea of another grocer.

“There’s not enough business in downtown for another store. It surprises me someone’s doing it,” he said Tuesday.

Hargreaves said he’s particularly frustrated that the store might go into a building that was developed with the help of the city government.

“The only way that project happened is that the city worked with them to do it,” he said. “I’m all for free enterprise. If someone can put in a development on their own and can sustain it, that’s great. But (a new grocer there is) going to marginalize us.”

Myers said he didn’t think a potential Pacific Avenue store would affect Stadium Thriftway. Stores in urban markets are measured in blocks, not miles.

“The metrics on this store are office, condo and visitors to downtown Tacoma. That’s your market,” he said.

Patricia Zeeck-Hadden has lived in the Rialto Apartments on St. Helens Avenue for three weeks with her husband and two young children. They have no car, and navigating the bus with her two kids and a bunch of groceries is too difficult. She likes the idea of a store within walking distance.

She said spending a little more isn’t out of the question. “I’d probably spend $40 and $50 (more a week) if it’s closer. I’ll pay for the convenience.”

Kathleen Cooper: 253-597-8546
kathleen.cooper@thenewstribune.com