Kokomo Tribune; Kokomo, Indiana

November 27, 2013

City inks Firestone building deal

Developer hopes to lure office and retail tenants to downtown.

By Martin Slagter Kokomo Tribune
Kokomo Tribune

---- — The Firestone building that has stood empty at the corner of Mulberry and Union streets could soon be filled with offices and retail tenants, with renovations expected to begin in the next 30 days.

The city of Kokomo has closed a deal with KipCor that will allow the Memphis-based development group to begin renovations that could include five to six office spaces on the building’s second floor and possibly a “gourmet grocer,” a coffee shop and other retail options on its ground level, KipCor head developer Jeff Broughton said.

Broughton, who has purchased 10 residential properties in the Kokomo area in the last 90 days, said he hopes to bring life to the city’s downtown by luring in both commercial tenants and a larger retail store as the building’s main attraction. He said he has had discussions with some of the senior staff at Trader Joe’s, a privately held chain of specialty grocery stores with around 400 locations nationwide.

While Broughton admitted that Trader Joe’s might not ultimately end up in the building’s first level, he has put some of the chain’s “senior staff” in contact with Kokomo Mayor Greg Goodnight. Trader Joe’s currently is reviewing the site and typically requires at least three months to determine whether it will choose a particular location, Broughton said.

“I’m not sure Trader Joe’s is ultimately going to work,” Broughton said. “They’re doing their due diligence and I know some of the senior staff who I put in contact with mayor (Goodnight) and they’ve had a package (of information about the site) for 30-40 days. Even if they decide it’s not for them, as a developer, I think they would be a great tenant.

“Ultimately I feel like (the Firestone Building) would be a great place for a gourmet grocer,” he added. “We’re going to be careful. Our first choice would be some type of gourmet grocer similar to Trader Joe’s. We want to make sure we have the right tenant in there.”

The building was donated to the Kokomo Redevelopment Commission, which approved the transfer of the property to the city’s Community Development Corp.

Prior to that, the city owned the building after receiving it from STAR Bank for a $10 fee in 2009.

The CDC is working to put together a deed to transfer the building to KipCor with restrictions, Kokomo Director of Operations Randy McKay said.

“KipCor is moving forward with it and working with the CDC on this,” McKay said. “We should begin to see renovations in the next three to four weeks.”

While it remains unclear exactly what type of businesses the building will attract, Broughton said he has received two verbal commitments from customers looking to inhabit the building’s second floor office space. He hopes to finalize contracts with those businesses in the next week and is confident KipCor will be able to bring more tenants on board in the near future.

In addition to a gourmet grocer, Broughton said other prospective businesses might include a coffee or bagel shop or a frozen yogurt store on the building’s ground floor.

In the meantime, KipCor is moving forward with renovations to the building’s façade and awning to restore a “1920s” look. The interior of the second floor will be “white-walled” with a concentration on renovating the lobby area and atrium leading up to the second floor.

Broughton, who owns properties in 32 states, said KipCor was established to hold properties, but he also owns properties under different investment groups while working out of California.

Indiana, and the Kokomo area in particular, was an attractive option for Broughton and KipCor because of the city’s low unemployment rate and its median income.

“One of the most exciting things about Kokomo is there are 10,000 people commuting in the market every day,” Broughton said. “Those are customers to me.”

Broughton noted that the city’s willingness to work with him to provide the space for redevelopment has made Kokomo an attractive option, along with its downtown structure.

“The city has been great to work with,” he said. “We told (the city) we’d do all of the renovations and do our best to bring people into the building, and in turn, we wanted the building. Our ultimate goal is for the city to have a more vibrant downtown. I see an opportunity to at least rehabilitate the building, which is a start in building up the downtown.”

Prior to the agreement with KipCor, the Kokomo Redevelopment Commission received soil and groundwater testing results after engineers searched the Firestone Building and found six inches of water in the basement and potential environmental issues associated with the building’s past life as an automotive center/gas station, a machine shop and printer’s shop.

Those concerns were put to rest, however, after Phase 1 and Phase 2 environmental studies conducted with funds from federal brownfield grants passed standards, McKay said.

McKay said he is looking forward to the building’s reincarnation.

“We are certainly pleased with the design and the intent of the developers,” he said. “Hopefully they can make it look like the designs we’ve seen in the photos they’ve provided.”