Vanishing retailers leave behind vacant buildings in Snohomish County

Published 9:54 pm Sunday, April 19, 2009

Gone are the rows of electronics or linens, sporting goods or furniture.

Across Snohomish County, like much of the country, large retail stores are being shuttered, leaving thousands upon thousands of square feet of empty space.

And there are more retail vacancies on the way. Both Gottschalks and Joe’s Sports have announced the liquidation of their Northwest-based stores. Those locations join 20,000-square feet and up buildings for sale or lease: Coast to Coast Hardware in Monroe, the former Home Base store near Costco in Everett, the old Linens’N Things in Marysville and Lynnwood.

The National Association of Realtors predicts the retail vacancy rate will hit 13.4 percent nationwide by the third quarter, compared with 9.8 percent in the third quarter of 2008. With retail space flooding the market, retail rent rates are expected to drop 9 percent this year, compared to a 2 percent drop in 2008, the group said.

Empty retail space does more than gather dust. It creates shortfalls in county and city coffers, which depend on sales and business-and-occupation taxes to keep the wheels of local government turning. The city of Everett’s revenue from these two taxes was down $1.3 million in January and February over the same months in 2008. And Edmonds estimates it will face a 50 percent drop in sales tax revenues this year.

For March, retail sales dropped 3.7 percent from 2008 after two months of better-than-expected sales, reports the National Retail Federation, which excludes car and restaurant sales from its calculations. Even big box retailers, like many that have gone out of business in Snohomish County, are suffering, seeing sales drop 2.1 percent in March over last year.

And the trend isn’t expected to reverse itself soon. The National Retail Federation predicts lower sales in May for Mother’s Day — a holiday that tends to rival Easter in retail spending.

“Retailers understand that people are on strict budgets, even for important holidays,” said Tracy Mullin, president of the retail federation.

But strict consumer budgets won’t fill buildings or retain retail jobs. Snohomish County has lost more than 2,000 retail jobs in the past year, according to the Employment Security Department.

Analysts believe retail sales will improve when the county, and country, can stabilize the job market.