Plan to break up Santa Rosa Kmart building?

A property development team last week publicly displayed plans to add a new facade to an aging big-box store in northwest Santa Rosa and to break up the interior space for at least five separate retailers.

There's just one thing: The building at Cleveland Avenue and Industrial Drive remains occupied by Kmart, which says it has no plans to move.

The property owner's representatives, who made a presentation last week to the city Design Review Board, were quick to emphasize that Kmart still has a lease and occupies the mammoth store. Outside the meeting, they were reluctant to say much on their plans and on the timing of the proposed breakup of a 49-year-old building with more space inside than two football fields.

“It's planning for the future,” said George Akel, of Newman Development Group in San Francisco.

The fact the design meeting came a day before an announcement of new Kmart store closings - albeit not including the Santa Rosa location - underscored the fact that many retailers these days are shrinking, not expanding, their brick-and-mortar locations. In such times, Sears Holdings, Kmart's parent company, is being closely watched to see whether it can avoid bankruptcy.

“Never has it been so difficult” to get retailers to commit to opening new locations, Thomas Laugero, a partner at Keegan & Coppin/Oncor International in Santa Rosa, told the design board members on behalf of the owners.

Representatives for the building's owner, Cleveland Avenue Associates, on Thursday sought the design board's initial review of architectural renderings for a proposed upgrade and breakup of the 114,500-square foot store. Further review and approval would be required should the owners wish to proceed.

The drawings showed a new facade and four “major tenant” stores with spaces ranging from 22,000 square feet to 34,200 square feet. A smaller space of 4,000 square feet might serve as an eatery.

When asked about the owner's proposal, a representative for Sears Holdings said Thursday in a written statement that Kmart has “multiple years remaining on the store lease and no plans to leave or close the store.”

Sears Holdings last week announced the planned shuttering of another 35 Kmart stores and eight Sears stores, bringing the total store closures announced this year by the company to more than 300, according to USA Today. The closure list includes a Kmart in Eureka.

Real estate analysts predict a record number of U.S. store closures this year. Nonetheless, some see opportunities for retail beyond the traditional shopping mall.

Garrick Brown, vice president of retail research for real estate company Cushman & Wakefield, noted in a May 2 report that most closures have occurred in apparel and department store chains that are concentrated in malls and urban locations. Meanwhile, vacancy rates at non-mall retail locations have declined since 2010, and “off-price” apparel stores such as TJ Maxx, Ross, Marshall's, Nordstrom Rack and Burlington are each planning to open 30 to 60 stores annually for the next few years.

While “mid-priced” stores are shrinking at the fastest pace in a decade, Brown wrote, the “off-price and discount concepts have exploded with growth.” Such stores often are located outside of malls.

You can reach Staff Writer Robert Digitale at 5707-21-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.