Sun rises on Sunset: Waukesha commercial strip sees growth and redevelopment

Todd Ponath
An aerial photo of The Shoppes at Fox River on the west side of Sunset Drive.
Published on: 2/12/2015

Moorland Road in New Berlin, Bluemound Road in Brookfield, 76th Street in Greenfield and Greendale and Mayfair Road in Wauwatosa are all stretches that feature extensive shopping centers and are well-known around the area.

And Sunset Drive in Waukesha? Not in the same category. Or is it?

Community Development Director Jennifer Andrews knows Sunset — which includes portions of the city and town of Waukesha along its 3.1-mile stretch from Highway 164 on the east side to the west side on the corner of Sunset and Genesee Road — doesn't have the big regional draw as some of its metro neighbors.

Strips anchored by large shopping malls and aided by easy accessibility to interstates tend to draw from vast distances.

But Andrews said Sunset, which will see substantial commercial development changes in the coming years, is continuing to draw a wider audience outside its immediate Waukesha area and is catering to a growing population on the city's southwest side.

"I think it will be more of a destination, not necessarily for the entire county, but for the neighboring townships," Andrews said.

Proposed developments (No. 2-4) along Sunset Drive that will soon see its sites get redeveloped, while location No. 1 is still waiting on a developer to purchase the site from the bank and redevelop the shopping center.

East to west

This, of course, starts with The Shoppes at Fox River, located at the corner of Sunset Drive and Oakdale Road, and will continue when the Meijer 24-hour supercenter on Sunset's east side at the southeast corner of Tenny Avenue and East Sunset Drive opens in 2016.

"We see The Shoppes as an anchor on the west and Meijer and the (soon-to-be redeveloped) Kmart site as an anchor on the east side," Andrews said.

The Shoppes at Fox River site was once the site of a former Flemings distribution facility, but it's now bustling with activity. One reason: The city's population on the southwest side has increased by 27 percent over the last 10 years.


RELATED:

Redevelopment in Waukesha finds it way through many avenues

- Waukesha NOW poll: How often do you shop at The Shoppes at Fox River? 


 

Community Development Specialist Jeff Fortin said the most recent traffic studies on Sunset Drive in front of The Shoppes shows an average of 20,500 vehicles per day. That's still substantially less than the 44,800 on Moreland Boulevard by the Westbrook Shopping Center, anchoring Waukesha's other major commercial strip.

But the growth along and near the south side of the city should help increase Sunset's vehicle traffic.

Market research backs up that prospect. According to a market study done by The Shoppes' developers, the population for those within three miles of the center is expected to increase by 1.4 percent in the next five years.

A place to Shoppe

The Flemings-to-Shoppes overhaul began in 2009 with the arrival of established anchors Target and Pick 'n Save. They were followed by TJ Maxx and Hobby Lobby.

Now firmly anchored, the developer continued with smaller but popular restaurants and retail outlets along the way. In total, the center has 25 stores and totals 369,774 square feet.

The selection at the center, which is already the largest retail development location in the city, is what stands out to Andrews, as does the overall design.

The female demographic is represented with Ulta Salon and clothing stores Maurices and Charming Charlies.

The sports crowd flocks to Buffalo Wild Wings, with its umpteen TVs in its dining areas tuned almost exclusively to sports programming.

For those looking to get something fast to eat, there's Subway, Jersey Mike's and Noodles & Company.

But Andrews said establishing a good shopping center isn't about people grabbing a bite to eat and leaving. It's about keeping them here for hours and being intrigued by the options.

"It really lends itself to one-stop shopping with the mix of services it offers," Andrews said. "You can do it all in the same place."

Shoppes owner Ramco-Gershenson Properties Trust, based in Farmington Hills, Michigan, wants to give shoppers more options and it's why it is continuing to grow on its recently purchased property.

A large sporting goods store is expected to be built on the site as well as other national restaurants and other small national retail stores. Construction is expected to get underway soon there, allowing those retail buildings to open later this year.

Fortin said The Shoppes at Fox River addition will add a projected $20 million to the city's tax base.

Randy Roth, a developer who is transforming the former Kmart site on Sunset Drive, said The Shoppes got his attention.

"We like what they're doing at (The Shoppes)," Roth said. "The tenants they get there would not come to our location so we're not a competitor to them, but the fact that they're coming in and having so much growth there changes things."

Backed by major development firms — Opus Development Corporation started the project but later sold the property to Ramco-Gershenson — that have invested millions of dollars into the site, the redevelopment has happened relatively quickly at The Shoppes. Andrews said those companies have the ability to bring in national players.

However, recent history shows that other sites have not been as fortunate just up and down the road, though hope is on the rise.

Kmart site re-emergence?

The site of the former Kmart on the other side of Sunset Drive is one example.

A rendering shows development plans for the former Kmart site.

Waukesha's vacant Kmart, like others around the Milwaukee metro area, left a large hole in a shopping center, and it's a hole that has been quickly closed.

However, Roth, a developer with the Milwaukee-based Endeavour Corp. which is redeveloping the 11.8-acre site, is looking to change that.

"This part of Waukesha has always been somewhat neglected," said Roth, who has already received commitments from Xperience Fitness and Dollar Tree to move into the former Kmart building and has already begun site work there. "When you look at Waukesha, it's really well-represented from a retail perspective, but the fact that the Kmart went dark ... sort of hindered national retail interest in this area.

"However, that doesn't mean there aren't people that would go if you could just figure out how to get it started," added Roth, who along with his company's partner, Lockard, a nationwide integrated real estate solutions firm in Iowa, is investing $4 million in cash into the site.

"We love the fundamentals of the real estate, because you're kitty-corner to Meijer, which was a big deal that made our project realistic."

Revolving around Meijer

Roth said it was critical for the city to give the Meijer project its approval.

The proposed Meijer in a developer's rendering.

While there was pushback from Meijer's future neighbors who live in a residential area, Meijer officials received the go-ahead from the city last summer to construct a gas station and its nearly 200,000-square-foot food, clothing and home merchandise store. Construction will start this spring.

Meijer could add $15 million to $20 million in potential value to the city's tax base, while the redevelopment at the Kmart site could add $6 million in tax base, Fortin said.

"It (wasn't) so much on the tenant side, but from the bank and my partner Lockard," Roth said referring to his project not moving forward without Meijer's approval. "That was a really important development of this project. Pick 'n Save and Walgreens are really great co-tenants, but the Meijer store is really what triggers the market. It was a difference-maker."

Roth also said he felt it's a good time to invest in commercial real estate.

"The market has gotten better when we first started this project three years ago," Roth said. "It was still kind of a recession on the real estate side and so it was not a great time to try to do a $14 million deal. So part of those three years was waiting for the hangover from the recession to leave everybody."

Saintly blessing

Roth looks to follow a similar path as St. Vincent de Paul Waukesha County. The nonprofit charitable organization helped revitalize another blighted site on Sunset Drive.

St. Vincent de Paul moved its operations from downtown Waukesha into a former Kohl's grocery store, S30-W324836 Sunset Drive, as a way to increase its revenue.

The Kohl's grocery store, which opened in 2000, was itself a success story turned sour through no fault of its own — at least in terms of its location.

The store closed as part of the demise of the entire chain a few years later. The relatively new building sat vacant for seven years until St. Vincent moved in about four years ago.

Bill James, director of store development of St. Vincent de Paul Waukesha County, said moving into the larger space (50,000 square feet compared to 20,000) as well as the parking and traffic generated from Sunset Drive has helped the nonprofit business thrive.

"It's been substantial," James said. "We make twice as much here now (than before). We went from practically zero income to some real money here."

Similar to James, the owners of the Panos grocery store have said they closed up their store in downtown, which was struggling, to focus solely on its money-making store on 426 W. Sunset Drive.

Where sun doesn't shine

However, the Fox Run Shopping Center, which is just off West Sunset Drive and west of Genesee Road, has experienced serious financial troubles in recent years with no resolution in sight, at the moment.

Many tenants have moved out in recent years, and the center is currently in foreclosure. (A bank owns the 11.22-acre center.)

Andrews said she could see the center bringing redevelopment plans to the city later this year or next year. However, while she said the bank is discussing its options to sell to a developer, a timeline remains unknown.

"It could take time," Andrews said. "I'm not sure what the bank's timeline is to dispose of the property."

She added: "It's still a great corner as a lot of traffic comes through there. We have spoken to a few developers that are interested in the property but really it is the bank's decision about when they want to sell and to who."

When it does, it will add to the growth of Sunset Drive.