The vacant Sears building at San Luis Obispo’s Madonna Plaza will be demolished and rebuilt into three storefronts, two of which will be occupied by Ross Dress for Less and Michaels crafts, retailers that already have locations in town.
Shopping center owner Schottenstein Property Group filed plans with the city, and the proposed project was approved by the Architectural Review Committee (ARC) on Oct. 16.
The proposed redevelopment includes demolition of the existing 75,400-square-foot Sears structure and construction of a 56,257-square-foot building that provides for three new tenants, including one not yet named.
Starting from the north next to Petco, Ross would occupy a 22,020-square-feet space, Michaels is listed at 21,729 square feet, and Tenant C will be 12,508 square feet.
With the closure of Sears this summer as well as the shuttering of Forever 21 in 2015 as the anchor to the adjacent SLO Promenade (former home to Gottschalks), the two centers’ owners have been working to rejuvenate the properties at a time when brick-and-mortar retail is downsizing.
On the question of whether the two retailers would shut down their existing locations to make a move next year, Brett Oliver, general manager of Michaels’ San Luis Obispo store, said he has been told they will relocate “probably in about a year.”
Oliver said the craft store at the Marigold Center has 35 to 40 employees now and that the business is doing well.
“It’s exciting that we will move,” he added. The new location is a shopping center with more regional draw than the neighborhood Vons center on Broad Street.
The manager at the SLO Ross store downtown said he has not been told whether the company will relocate or open a second store. Ross Stores does have a sister store, DiDi’s Discounts, that is not currently in SLO and could theoretically take one of the spots.
Located at the far end of the Madonna Plaza, the two popular retailers should help revitalize a shopping center that has suffered its share of losses in recent years and is now poised for a flurry of upgrades.
A DSW shoe store is opening Thursday in the space formerly occupied by Sports Authority, which itself moved from downtown after Borders Books closed in the space. In 2014, Big 5 left its longtime home at Madonna Plaza and reopened in the Marigold Center. Ulta Beauty took over the Big 5 space in 2015.
Next door, the SLO Promenade has also suffered closures of prominent chain locations.
Forever 21 closed its 120,000-square-foot store after the holiday season in 2015. It has been vacant ever since, although Sprouts Farmers Market has signed a lease to take over 30,000 square feet of that space. It’s slated to open by early 2018.
A Staples office supply store closed a few doors down in 2014, and across the parking lot, Hometown Buffet shut down in early 2016.
Of the large Sears building, local commercial Realtor John Rossetti said the retailer had been paying a very low rental rate for years, allowing the shopping center owner to re-lease the space at an improved return even with the retail downturn.
Large spaces like those once occupied by Sears and Gottschalks have become less desirable in favor of 20,000-square-foot spaces.