Article: Fred Meyer Eyed as Tenant for Centralia StationMarch 9, 2017
By Justyna Tomtas, The Chronicle
Special Meeting: Port of Centralia Commissioners Approve Purchase, Sale Agreement to Developer With Hopes Business Will Be Anchor for Development
Port of Centralia commissioners approved a real estate and purchase agreement with Powell Investment Co. LLC for approximately 28 acres of property within the boundary lines of Centralia Station that, if all goes well, will be home to Fred Meyer as the anchor tenant of the development.
Centralia Station is a 43-acre development near the Mellen Street interchange that would also include auxiliary shops, restaurants, offices and other businesses.
At a special meeting on Tuesday, commissioners approved the move with an unanimous vote, entering into a partnership with Powell Development.
The sale price was set at no less than $6 per square foot, totaling around $7.3 million, according to the development company. The 28 acres were previously declared surplus by the port at a January meeting.
The transfer of development rights is similar to actions taken prior to developing the port’s two industrial parks.
“The port’s mission is to create opportunities for economic development in our community and we’ve done that with Centralia Station,” Kyle Heaton, the executive director of the port, said. “Now it’s time for the port to take the next step forward with this project and transfer it to an experienced and respected developer who will bring Centralia Station from a planned project to a successful enterprise.”
The port commission interviewed at least six developers before deciding on Powell Development, a company that was in large part selected because of its relationship with Fred Meyer, according to Heaton. The commission set its sights on Fred Meyer at the request of its constituents whose “message has been overwhelmingly” in favor of bringing the company to Centralia.
Peter Powell, CEO and founder of Powell Development, said he has helped develop at least 12 Fred Meyer locations.
“I think that’s the exciting part about it is you have an accomplished developer that is well capitalized standing on the front door mat ready to do it,” Heaton said.
The 172,000-square-foot store would include a full fuel center, a drive-thru pharmacy and a garden center, according to Powell.
A representative of Fred Meyer did not immediately return a request for comment before deadline.
Heaton said Centralia Station would not look like a concrete strip mall. Instead, the buildings would have brick facades and tie in well with the city.
“We think it will complement what’s going on downtown, and give people who are at the hospital an opportunity to get away for a while,” Heaton said.
The work to bring Fred Meyer to the area has been underway for four years, but Powell cautioned the project is “not a sprint, but a marathon,” adding the process is just starting.
Although the signing of the documents has been authorized, the development company has no intention of purchasing the property if Fred Meyer is not the anchor tenant, Powell said. The store is still dependent on various things, including cooperation from the city of Centralia.
“The city of Centralia is an equal partner and just as important as the port as far as permitting,” Powell said, adding the extension of Yew Street and utilities are essential to the project — both items that would be the responsibility of the city.
“The biggest thing we have in our mind right now is making sure we have the roadway and the utilities,” Powell said. “Other than that I think barring something catastrophic, we can get under construction within a year.”
Successfully locating Fred Meyer to Centralia would also require cooperation from other parties, such as the Washington State Department of Transportation, Heaton said
“… We are confident that once these parties have had the opportunity to review the many positive economic impacts this tenant will have on our city and to see support from the community, they will pitch in and help Powell Development make bringing in Fred Meyer a reality,” Heaton said.
According to an economic impact statement completed in October of last year by ECONorthwest, an independent party, the $53 million construction of Centralia Station alone would employ the full time equivalent of 410 workers in Centralia, support 575 jobs throughout the local economy and pay $4.6 million in state and local taxes.
Once Centralia Station opened, the businesses would employ 535 people in Centralia, with 698 in the local economy, earn $118 million in annual sales and pay almost $7.1 million in state and local taxes.
Powell said he believes the development will bring in even more than that.
“We concur with those numbers. In fact, I believe it’s conservative,” he said of the economic forecast.
Fred Meyer alone is expected to bring in 200 jobs, according to Heaton.
“Fred Meyer’s wage rates are among the highest in the industry,” Heaton said. “The longevity of their employees is among the best in the industry and their corporate citizenship is also among the best.”
Port commissioners were excited to move forward with the project, which they said would add a significant economic value to the city. They thanked Heaton for his hard work and also acknowledged the vision of past port commissioners who helped bring the project to reality.
“That’s how it all started,” Commissioner Dan Keahey said. “We saw what was going on with the loss of jobs at the steam plant, the economy was terrible and we said, ‘What can we do?’ So we picked on this project.”
Commissioner Matt Evans said the commission wanted a quality development that would fit the city.
“This is really going to clean up that part of town and make it a nice entryway to our city and hopefully it will inspire other investment,” he said.
Commissioner Julie Shaffley agreed. She said it meant a lot to know a large corporation is looking to move to Centralia.
“This is such a shot in the arm for Centralia and for the whole community,” she said. “There’s always the first comers … so this is just the beginning.”
With an anchor tenant in place, interest from smaller auxiliary shops should begin picking up.
Powell said the next steps for his company include land surveys, and soil and environmental analysis. The purchase of the property can only happen after capital committee approval from Fred Meyer, he said.
“This is the start of the process and not the end,” Powell said. “I’m excited to work with both the city and the port and expect to bring out an excellent project. We have to roll up our sleeves because we still have a lot to do, but this is not abnormal.”
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