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Plans are in the works to convert the vacated BIG Kmart department store in Visalia, pictured here, into an office building. Photo by David Castellon
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The Tulare County Board of Supervisors will consider Tuesday whether to lease the former Visalia BIG Kmart and convert it into offices for the county’s Probation and Mental Health Services departments.
Last month, city officials confirmed efforts were underway to lease the 85,500-square-foot department store that closed last year and convert it into office spaces, but they didn’t disclose what groups were interested in occupying it.
A report for the supervisors ahead of their meeting on Tuesday states the Probation Department has outgrown its 25,549 square feet of space in Visalia — part of it in the Tulare County Superior Courthouse and the rest in two leased spaces in other parts of the city — “and has identified the need to consolidate staff into a single location that offers improved functionality for the department and improved accessibility and service to customers.”
It goes on to say that both sites outside the courthouse will have their leases expire next year, but the landlord of one doesn’t intend to allow that lease to be renewed.
“Over the past year, staff have explored several options for probation’s current and future space needs, including purchasing an existing building, constructing a new building on county-owned property and continuing to lease space at various locations,” the report continues.
“While initial property searches were unable to identify viable options to accommodate the business and square footage needs of a consolidated probation, recent interest expressed by the [county] Health and Human Services Agency in co-locating Mental Health Services near the probation office allowed staff to expand the scope of the search to include the acquisition of larger facilities.”
They settled on the store site in the Rancho Villo shopping center off Highway 198. The site includes a large amount of parking spaces already in place and close access for employee and clients to several restaurants, small shops and a SaveMart supermarket at the opposite end of the shopping center.
The proposed 25-year lease — with three five-year options for renewal, along with an option for the county to buy the building after the first five years at a fair market value — has a base price of $106,633 a month, along with a $12,925 monthly fee to maintain common areas.
As proposed, both would increase by 2% annually, though maintenance charges will be adjusted based on actual costs, with the county being reimbursed for any overpayments.
In addition, 5 cents per square foot will be set aside from the maintenance fees and placed in reserve to help pay for major repairs and equipment replacement needed while the county leases the building.
Because of the added square footage, the county’s General Services Agency estimates the proposed lease would cost the county more than $1.1 million more in the first fiscal year than it pays now for Probation’s and Mental Health’s leases.
“For the first five years of the lease, the county will only be obliged to pay rent on 64,626 square feet, and the remaining 20,874 square feet will remain unoccupied but available to the county at the current rental rate, should it choose to utilize the space,” states the supervisors’ report.
It adds that at year six, if the county doesn’t purchase the building, it will have to pay rent on all 85,500 square feet.
As part of Tuesday’s vote, the supervisors also will consider whether to approve plans to alter the former Kmart into an office building.
“Center Drive Partners, L.P., a partnership that includes local developer Sunny Basra and Orange County-based Paynter Realty & Investments. Inc., has proposed to design, alter, and lease to the county the former Kmart building located at 3247 W. Noble Ave.,” states the supervisors’ report.
Paynter Realty has a strong track record in the South Valley of retail development, which has included Park Place Promenade, Sequoia Plaza and Gateway Plaza in Visalia; the Marketplace at Hanford and the Marketplace at Hanford West; Plaza del Lago in Tulare; and Woodward Pavilion in Fresno.