Small-vendor concept targeted for large retail building

Terry and Trudy Naumann are breathing life into a giant retail space that sat vacant for almost six years — and it hasn’t proven to be easy.

The Naumanns are renovating the former 167,000-square-foot Kmart building in northwest Reno into Great Western Marketplace, a small-vendor concept akin to Oxbow Public Market in Napa or Chicago French Market. Unlike those venues, which primarily focus on food vendors, the Reno operation is expected to include a diverse lineup of retail tenants as well food purveyors.

The Naumanns paid $4 million for the property and closed in the third quarter of 2013. They put up their own funding for the venture and hope to have their doors open by summertime.

Here’s the concept:

The building will be partitioned into grids of small vendor stalls. Vendors can lease one or more stalls depending on the size of their operation. Minimum space is a 10-foot by 10-foot stall, but there also are larger configurations, and vendors can lease as many stalls as they need.

Great Western Marketplace can hold as many as 550 vendors if each operator rented 100 square feet. Spaces primarily will be three walls with an open roof, but vendors also can develop a multitude of spaces to meet their needs — up to a point, Terry Naumann says.

“We will have a set of architectural standards. We don’t want it to be an island market look, where it is such a visual clutter. We want to maintain continuity. We will have some standards that they have to meet.”

The Naumanns don’t consider Great Western Marketplace a flea market or giant bazaar. Rather, they see the concept a place where small retailers can set up shop with minimal overhead and explore the possibilities for growth.

“We look at this as a retail incubator,” Naumann says. “What we are trying to do is give people the opportunity to start a business that maybe didn’t have the confidence or the financial wherewithal to go out and get a free-standing shop space.

“We can provide a low-cost alternative to someone who wants to go out and test the waters. This is a launching space for someone to start.”

Trudy Naumann says “flea-market” is a bad word for the redevelopment effort.

“This is something that is going to be needed in the community; it will be practical and creative.”

Lease rates are still being defined, but they will be extremely competitive with retail rental rates for freestanding properties, Terry Naumann says. Vendors also won’t have to worry about additional capital expenditures, such a power, water and trash. Lease terms start at six months.

It took the Naumanns nearly two years of wrangling to complete purchase of the property from Sears Holdings Corporation of Chicago, which owns the Kmart chain. Kmart closed its doors in Reno in 2008. Purchase price of the building, as well as ample parking, were motivating factors in the decision to buy. The property has more than 1,000 parking spaces.

Although many parts of the building are being re-utilized, time and vandals proved costly to the Naumanns.

For example, there are 27 industrial-size air conditioners on the roof of the property — the smallest is a six-ton unit. Each unit was damaged beyond repair and was replaced at a cost of several hundred thousand dollars.

Drywall throughout the building was destroyed, and copper wiring was stripped from power and light poles in the parking lot. Vandals even lit fires on the floor.

“This building was horrendously razed by opportunists coming in and stealing stuff,” Terry Naumann says. “We have got a tremendous amount of capital repairs just to get up to capital improvements. It looked like a battleground.

“We kind of look at it like we are taking a piece of urban blight and trying to revitalize it in a way that is completely different,” he adds.

Other parts of the building are a natural fit for different avenues of business. The former garden center lends itself to a small auction area, Terry Naumann says, while the area that held the old seafood counter lends itself to a small coffee shop or café.