In the Know: What's next for those Lucky's Market locations in Southwest Florida? How about Trader Joe's?
Phil Fernandez
Lucky's Market is leaving a bit of a mess behind.
Abandoned storefronts. Half-finished buildings. Long-term leases.
So what will go in all these places after Lucky's closes its locations Feb. 12 in Southwest Florida and beyond?
Well, first, in the musical words of the late great George Harrison: "It's gonna take money. A whole lot of spending money. It's gonna take plenty of money, to do it right, child."
How costly is it for developers to outfit a 30,000-square-foot building with Lucky’s in mind and then have to do something different for another tenant?
"Usually for a large space like this, the cost can be expected to exceed $1 million," Patrick Fraley said Wednesday.
Fraley knows from experience. He handles leasing and sales responsibilities for Investment Properties Corp. of Naples, which is losing Lucky's as a tenant in Promenade at Naples Centre on the corner of Airport-Pulling Road and Naples Boulevard.
The Lucky's retreat is not the first time that's happened to him. In fact, these same circumstances were in play at the shopping center in the very same spot the grocer is vacating.
And:In the Know: Troubling news for Lucky's
Wild Oats Natural Marketplace, operating for more than a year, deserted the location in summer 2008. Whole Foods Market had acquired the chain and made plans to launch its store four miles away that September.
Whole Foods "did not want to cannibalize their sales when they opened at Mercato so they closed Wild Oats just before opening," Fraley said. "Whole Foods continued to pay rent on this space."
How long?
A decade.
"We negotiated the early termination fee that we used towards the Lucky’s," said Fraley, who declined to reveal any numbers.
Kroger, the then-financial muscle for Lucky's, had come in and cut a deal for the market, which opened last April.
Now it's Kroger getting stuck with the lease, as in many markets, that has 14 years left at Naples Centre.
"They are still responsible for the terms of the lease, which could be very expensive to get out of," said Karl M. Gibbons, president of Naples' Third Eye Management, founded more than 30 years ago to advise businesses in the United States and abroad.
Lucky's, with Kroger no longer having its back, also ditched East Naples and 31 other sites, along with a dozen or so partly to nearly fully constructed locations in Florida including North Naples, Cape Coral and Fort Myers.
So with its dough already going toward empty venues just waiting to be occupied, plus Lucky's brand new and now discarded distribution center in Orlando, would Kroger finally make a move into our area and Florida?
Maybe a Mini-Me version in an area inhabited by a built-in audience? Many of us are quite familiar with them from our frosty days up north.
Anything's possible, Fraley said, not that Kroger has publicly put that on the table yet as he considers his options. And not that Kroger is responding to interview requests.
"It would be bold to move into Publix's home territory, but if anyone can make a meaningful play for Publix’s market share, it's Kroger, which is widely regarded as one of the best operators in the industry," Gibbons said.
If not that, "potential options could be subletting the units to a third party or rebranding with one of its subsidiaries," he said.
Kroger has a lot of those in its self-proclaimed "family" including Fry's, Pay-Less Super Markets and Harris Teeter, which can be found in the Jacksonville area.
Still to Gibbons, this is a more unlikely scenario to fill the Lucky's void than those like Sprouts, Trader Joe's, Earth Fare and even Oakes' Seed to Table, barely a month old and still in its infancy.
Trader Joe's, seemingly on everyone's wish list in Lee County, and Sprouts are both in Naples, with the latter slated to make an Estero debut this year. Earth Fare has been continuing its southern march, landing in Lakewood Ranch and looking to expand more.
They "have established themselves in the Florida market so the opportunity to acquire the vacant Lucky’s properties could be appealing to those companies," Gibbons said. "A turnaround in branding would be very quick as the infrastructure at the properties is already in place."
Those grocers aren't saying, but with the strong local economy, Gibbons doesn't think developers and shopping center operators like Fraley will have to wait as long as they did last time to find a substitute.
But for Fraley and his colleagues, stores coming and going is just the price of doing business.
"Getting a healthy termination fee from the previous tenant helps," he said.
Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know for the Naples Daily News. Send tips to NDN-InTheKnow@gannett.com
