It is one of the most prominent vacant buildings in all Oakland County, and it may stay that way for awhile.
The former world headquarters for Kmart, 3100 W. Big Beaver Road in Troy, has been empty for eight years since the Detroit-founded retailer became part of Sears and departed for Hoffman Estates, Ill.
Originally dubbed “Fort Kresge” for its imposing look and Kmart’s original name, the old corporate headquarters is across the street from Somerset Collection, the biggest-draw mall in Michigan. The empty headquarters was once slated to be demolished as part of a $320 million “Pavilions of Troy” development, but that proposal — involving a mix of restaurants, condos, retailers, offices and a hotel — unraveled in the recession.
Today the mall and the old Kmart headquarters have the same owner: The Forbes Co. of Southfield, a developer and manager of luxury shopping centers. The Forbes/Frankel ownership group bought the Kmart site for $17.5 million in December 2009, significantly less than the $41.5 million the property sold for in 2005 to investors that included Blackrock, according to city land records.
A representative for the company, Peter Van Dyke, said Forbes intends to develop the 40-acre Kmart property “in the caliber of their other properties across the country.” But the company declined to give specifics on timing or the type of development.
Retail experts say that considering the site’s desirable location, there is no shortage of development possibilities and potential interest from commercial users. Yet under almost any foreseeable scenario, the old headquarters building, which opened in 1972, would need to come down. The building’s unconventional design involved a series of office pods and towers in a layout that has been compared to a labyrinth.
“Even though it has an interesting design, the building wasn’t so functional,” said Jim Bieri, a principal at Stokas Bieri Real Estate. “I think it would be difficult to re-lease that.”
Ken Nisch, chairman of Southfield-based JGA, a retail and brand strategy firm, said he can envision a high-end mixed use development on the site with retail and residential components.
The Kmart site could be attractive to retailers such as Restoration Hardware and Crate & Barrel, which are already at Somerset but may desire a store with more space. And it could bring new retailers to the area.
“There’s an awful lot of uses that aren’t in the market that would like to be here, but they’re not going to settle for a second choice (location),” Nisch said. “They will skip the market until they feel they have the right choice for the brand.”
For a residential component, one possibility would be premium, extended-stay lodging for business people who are visiting metro Detroit for over a month but less than six months or a year — a largely unfilled niche in the housing market.
Troy city officials say they also are hopeful about the site’s future and pleased that the owner has kept the grass mowed and not allowed the building to become an eyesore.
Troy Mayor Dane Slater said there is widespread confidence that whatever development The Forbes Co. pursues there, it will enhance the area.
“I’m sure when they do decide to do something, it will be a stellar project,” said Troy City Councilman Wade Fleming. “Of course, as a city council person and a resident of Troy, I would like to see it happen soon rather than later.”
The old Kmart world headquarters
■ Opened in 1972
■ Designed by Smith, Hinchman & Grylls and originally dubbed “Fort Kresge”
■ Was sold for $41.5 million in December 2005 and vacated by Kmart in 2006.
■ Sold for $17.5 million to Forbes Frankel Troy Ventures LLC.
