Walgreens Medford project delayed
Still, the nationwide drugstore chain plans to have a store hereby early in 2007
Days before Walgreens appeared poised to begin site work on a Medford store, the project has been delayed.
The nation's largest drugstore chain with fiscal 2005 sales of &
36;42.2 billion has coveted the Medford market for more than a decade. Walgreen Co. recently signed a long-term lease so it can redevelop the property on the southeast corner of Riverside Avenue and Barnett Road.
A review of plans for a 14,440-square-foot Walgreens was to go before Medford's Site Plan and Architectural Commission Friday, but that has been put on hold until Feb. 17.
We've run into several stumbling blocks, Jim Johnson, one of the partners who has owned the parallelogram-shaped, 1.17-acre parcel, since 1973. The city has things they're concerned about and their thinking affects Walgreens.
A Walgreens spokesperson Monday confirmed the Deerfield, Ill., company anticipates opening at the Riverside and Barnett Road location in early 2007. The publicly traded retailer intends to have 7,000 stores by 2010. As of last week, the there were 5,080 stores in 45 states and Puerto Rico.
— Sometimes cities are very anxious to have us and push along the project, said Walgreens spokeswoman Tiffani Bruce. Other times, it's not exactly a perfect location and the site itself might not accommodate our prototype store and we have to make adjustments to our plans.
Johnson, a retired dentist and developer, attorney Bill Mansfield, retired real estate agent Lee House and Bob Bills were the original partners who purchased the property, known as Office Park, in 1973. Later, retired property managers George and Sherrod Carr obtained Bills' interest.
We've known for a long time our property was obsolete and was in transition, Mansfield said. We knew somebody would come along and do something better than we could with the property because it wasn't being used to its highest and best use.
Walgreens doesn't move fast, Johnson said. But none of us is in a situation where we needed the financial income from the property to live off and that gave us good bargaining power to get a lease we needed.
Walgreens typically asks for 60- to 75-year leases.
You don't find many property owners willing to deal on that length of time, John said.
Although the lease stretches well into this century, Mansfield said the land owners were able to get a cancellation clause at 25 years.
We've had firms, from time to time inquire, but we weren't excited about selling, because the capital gain (and resulting tax) would've been so high that it would've killed us.
The group bought the property for &
36;160,000 from Jack Day, who five years earlier bought the property for &
36;80,000. The newest of the three existing buildings on the site was built in 1959.
We kept them in good repair, but they are still old buildings, Johnson said. When we purchased the property, I thought they would outlive their usefulness in 10 years. But 25 to 30 years later, they're still there.
Office Park now sits vacant, waiting to be demolished; its 26 former tenants relocated during 2005.
Until recently, rent from 26 units exceeded the return one large tenant would provide. But dwindling availability of commercial space near the freeway has pushed the value of the land to where it now will net more with a single lease.
When you get more rent per square foot, it justifies demolishing the buildings for the land, said Russ Batzer, whose company will be doing construction work on the site.
Reach reporter Greg Stiles at 776-4463 or e-mail Walgreens Medford project delayed"firstname.lastname@example.org.