Springfield deal with developer seeks to transform old Kroger site

The City of Springfield has entered into a redevelopment agreement with developer Dillin LLC as both look to transform a former south side Kroger property into something that will benefit the area as a whole.

The goal is to identify interested party or parties for that space and have them be committed by the summer, according to a copy of the agreement.

The project is titled Four Corners and looks to not just simply add another grocery store in that location, said Larry Dillin, the president of Dillin LLC.

Instead, the focus is to transform the property, complete with a garden and space for additional entrepreneurs who would preferably be from the south side of the city.

“We want to redefine an area that has seen disinvestment and turn that around into an area that is seeing reinvestment,” Dillin said, noting that it is important to create an environment that will not only attract grocers but keep them from leaving.

“It wasn’t that Kroger left. It was that Kroger was the last grocery store to leave that area,” he added.

The grocery chain closed its location on S. Limestone St., in March. That led to the south side of Springfield being labeled a food desert with the closest grocery store roughly four miles away.

Springfield City Manager Bryan Heck said in September that after the store closed, the city received internal documents from Kroger showing the store “was losing money.”

“A lot of it was around products that have a shelf life,” Heck said during a Facebook live discussion at the time.

“Unfortunately they were losing a lot of products that weren’t getting turned over quickly enough,” he added.

In a statement released in February, right after Kroger announced the store would be closing, the company said the location was being closed as part of the company’s Restock Kroger plan.

Credit: Bill Lackey

Credit: Bill Lackey

“As part of the Restock Kroger plan, the company will utilize more of its capital to fund technology and infrastructure upgrades to provide its customers with a seamless shopping experience by accelerating digital growth in the region,” the statement said.

However, a concern of profitability can make finding a replacement difficult. Dillin said that is why it is important that the project ties in with larger plans of redevelopment in the area.

That includes putting together a business plan that would make the space more attractive to potential investors.

Just advertising the location alone will not be attractive, Dillin said. But, marketing it as something that would be part of a larger concept would create more interest.

That includes marketing the location that would not just be a grocer, but one that would also feature local entrepreneurs, specifically eateries. The idea would have those entrepreneurs fill up remaining space that would not be filled by a grocer.

Having a grocer in that location still remains one of the top priorities. Several community discussions between residents and representatives of Dillin LLC identified that as an important issue for the community.

Dillin added that means also being more targeted when reaching out to potential grocers, noting that the space would not be attractive to the larger, more corporate stores.

“We have been more focused on community grocers. That would include those that may have multiple locations in the grocery business,” Dillin said.

“It is very difficult in today’s world for an entrepreneurial person to start up a local grocery. Food distribution tends to go towards larger companies,” he added.

The city has been in talks and working with Dillin LLC since last year and both entered into a letter of intent over the summer.

Heck said during a Springfield City Commission meeting last week that the redevelopment agreement, which was approved during the same meeting, serves as “that important next step to continue to work towards the revitalization” of the former Kroger property and the corridor it is located on.

The agreement outlines what is expected from the city as well as what is expected from Dillin LLC. It is also broken into two phases, with the first one expected to be completed by March.

The first phase includes predevelopment work as well as hosting community conversations, looking at financing opportunities and developing a plan to market the project.

City officials say the agreement is important because the overall project is addressing food access issues in that part of the city.

Dillin said that his company has already completed most of the work that is included under the first phase. The second phase would include obtaining financing and moving forward with renovation work.

There is also a clause in the agreement that highlights steps that would need to be taken if either party decides to back out. In that case, the property would go back into the control of the city.

The city expects Dillin and his team to identify and lease the property to a qualified grocer by July 31. The former Kroger location is in the possession of the local land bank. That property is expected to be turned over to Dillin LLC by March.

Dillin is a longtime property developer. He took over the development of the Austin Landing Project in Miamisburg in 2016 until it’s sale in late 2019. He was also behind the Levis Commons development in the Toledo region.

In 2019, Dillin had plans for a proposed $130 million redevelopment at Ohio 48 between Sheehan and Spring Valley roads in Centerville, which included a vacant Kroger building and lot, according to the previous reporting.

Dillin had been working with investors and proposed redeveloping Centerville Place into a mix of office, retail and restaurant space as well as about 350 housing units.

However, the proposal was abruptly withdrawn. At that time, Dillin said in a statement that investors had the need “to focus on other parts of their business which prevented their comfort in an investment of this magnitude.”

“We thought that we had investors secured in the Centerville property and it turned out that we didn’t,” Dillin recently told the News-Sun.

He said this project will be different as his company will be in control of securing investors for the project, which he said was not the case for the Centerville project.

Dillin said moving forward, the focus would be to secure private investors as well a tap into public sources of funding depending on which direction the project goes.

He added that his company has had a dialogue with over a dozen grocers with a few expressing interest at this point.

Facts and figures

March – When the first phase of the agreement is expected to be completed

July – when an interested grocer is expected to be identified and willing to occupy part of the former Kroger location

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