By Alan Keays/VTDigger
RUTLAND—The third of three anchor stores at the Diamond Run Mall in Rutland Town plans to close, leaving local officials to wonder about the future of the regional shopping center.
Sears Holding Corp. announced Thursday plans to shutter 64 underperforming Kmart and 39 Sears stores across the country, with the Kmart store at the mall in Rutland Town on that list. The store at the mall is set to close in April.
“We are disappointed by this decision but understand that it is part of the national struggles that Sears/Kmart are enduring,” said Joshua Terenzini, Rutland Town Select Board chair, in a statement issued shortly after news surfaced of the store closing at the mall.
“We feel for the employees who will be displaced and will do what we can to help by recommending different workforce programs through the state,” he added.
“Unfortunately, this is a trend in brick and mortar retail that our country is seeing far too often with the increase in internet retail business.”
Kmart’s closing, as well as the now empty food court at the mall, leaves a great deal of the more than 375,000-square-foot facility vacant. The shopping complex remains home to several smaller retailers, dance studios, a restaurant and a church. Castleton University’s Spartan Arena is also located on the site.
The closing of Kmart comes on the heels of other anchor stores at the mall shutting down in recent years, including Sears and J.C. Penney.
The Kmart store has roughly 40 full- and part-time employees, with eligible workers receiving severance packages and the opportunity to apply for positions at other Kmart or Sears locations, the company said in a statement.
The move to close the 103 stores across the country is part of the company’s initiative to “close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members,” according to the company. Liquidation sales will begin as early as Jan. 12, the company added.
Neither company nor officials with the mall’s owner, BAI Rutland of Englewood Cliffs, N. J., could be reached for comment.
Terenzini said over the past couple of years whenever he has heard news of Kmart stores closing around the country he would cross his fingers hoping that he wouldn’t see the one at the mall in Rutland Town on the list.
“Well, finally it’s on it, unfortunately,” Terenzini said, adding, “I was encouraged over the holidays because we did some shopping there and I felt as an outsider looking in there was a pretty good amount of traffic in there.”
Terenzini said the town would likely see an impact on its 1 percent local option sales tax with the store closing. “Hopefully, it’s a minimal impact,” he added.
He said he hoped news of the store closing could help open up a dialogue between town and mall officials.
“We’ve historically had trouble getting phone calls returned and messages answered when we tried to partner with the mall and the previous management,” he said. “I understand they have a relatively new mall manager … We’d love to do whatever we could to support this building in our municipality.”
Rutland City Mayor David Allaire said Friday his first thoughts are with the employees who work at Kmart who will be losing their jobs.
He added, “Certainly for the regional economy, it’s another blow to the retail here locally.”
The mayor said he plans to contact Terenzini, his counterpart in Rutland Town, to talk about how they can work together “regionally” to address the situation at the mall.
“It’s to the point there now where it’s about 80 percent vacant. That’s going to be a large thing to turnaround,” Allaire said. “At some point, somebody has to think about repurposing. Obviously, it’s owned by a private company.”
Over the years the mayor said he has heard various “rumors” in the community about redevelopment plans or moves by other retailers to the site. One included Walmart moving from its downtown Rutland location to the mall property, he said.
“Pretty much just rumors, nothing directly from any official source,” he said. “Certainly, as you hear more and more about it, you tend to think that there may be something to it, but there’s certainly no imminent departure of Walmart (from downtown) that I’m aware of.”
The city’s agreement for $100,000 in annual impact fees from the mall allows for that fee to be reduced if an anchor store closes, based on the square footage of each particular closed anchor store.
The past two annual impact fee payments the city has received each totaled $44,828, which is far less than the $100,000 expected, according to city records.
That reduced payment reflected two closed anchor stores, Sears and J.C. Penney, at the mall. That amount is expected to drop further with the upcoming closing of the third anchor location, Kmart.
The city refers to the fund where the money goes as the Zamias fund, named for the mall’s developer in the 1990s, Damian Zamias.
Allaire said Friday that the agreement only had about three years left on it.
“At some point we’re going to have to deal with the fact that money will not be continuing to come into the city,” the mayor said. “It’s obviously a negative to some degree. Perhaps it will give us an opportunity here to have a discussion about what we think we ought do with what’s remaining in the fund.”
Lyle Jepson, head of the Rutland Economic Development Corp., said “brick and mortar” retail is evolving locally and globally in light advancements in technology and the growth of online retailers, such as Amazon.
“What technology will struggle to overcome, and what keen entrepreneurs will benefit from, is an ability to develop a personal relationship,” Jepson said, adding, “More emphasis will be placed on the ‘experience’ of shopping. And malls across the country will need to figure out how to reformat what they offer.”
He also said that REDC has had “limited interaction” with the managers of the mall.
“They have not actively reached out to us for support and have not shared any plans or suggested developing a strategy for growth,” he added. “I compliment them, in that, when we have reached out with a ‘lead’ they have been very responsive.”