Property managers silent on details as shopping mall continues to lose tenants

Milwaukie's only shopping mall within city limits has created some excitement among citizens with the prospect of a grocery store returning.

Since 2015, downtown Milwaukie has met the USDA definition of a "food desert," since the area is more than 1 mile from the nearest grocery store.

Property managers have been silent on the details of what grocery might be moving to Milwaukie, but based on a conversation, city officials released a Dec. 20 social media statement saying they expect a tenant to open "sometime in summer 2022." Meanwhile, the 16-acre Milwaukie Marketplace continues to lose tenants with the impending closure of Joann Fabric and Crafts, which has a 13,775-square-foot space that will be vacated by April.

Joann's closure will leave 103,834 square feet vacant of the marketplace's total of 185,760 square feet. Its craft store in Portland's Eastport Plaza is also closing, and the two Joann sites will merge in Clackamas at a former Salvation Army store near King Road, 10174 S.E. 82nd Ave.PMG FILE PHOTO: RAYMOND RENDLEMAN - Even on a sunny afternoon, most of the 702 parking spaces at the Milwaukie Marketplace mall are unoccupied following the exit of key tenants.

Milwaukie's shopping center has struggled to keep tenants since the 2015 closure of its largest space that had been set aside for a grocery store at the corner of Highway 224. For decades, it had been an Albertsons, but the grocery/pharmacy closed soon after being bought out by Haggen, which declared bankruptcy later that year. Milwaukie Marketplace then lost a Payless Shoes, Hallmark card shop, pet store and martial-arts studio.

Since the beginning of the pandemic, the marketplace recently lost two other longtime tenants, McGrath's Fish House in 2020 and the Salvation Army Thrift Store in July 2021. The former sites of the grocery and Salvation Army store were listed on the property management firm's website as "leased" but no other information is given about the potential tenants or their timeline for moving in.

Milwaukie Mayor Mark Gamba has identified the 42,630-square-foot space vacated by Haggen/Albertsons as a top priority for the city. Milwaukie has applied unsuccessfully for grants that would allow the city to hire a consultant to assess the market support and financial feasibility of a preliminary public market concept for the vacant grocery space in Milwaukie Marketplace.

Gamba said that Milwaukie Community Development Director Joseph Briglio heard about the grocery-store leasing in December, but the notification was a courtesy. The property manager didn't have to provide the city with any written documentation of the lease, since the property is remaining commercial.

"Unless they want to change the use, they don't have to tell us anything," Gamba said.

Marketplace Property Manager Scott Bennett wrote to Milwaukie's development director on Dec. 20, "It was good to talk to you today about Milwaukie Marketplace," but no other information was revealed in response to Pamplin Media Group's public-records request on written documentation of correspondence between the city and Kimco Realty.

"Thanks, Scott. It was nice meeting you as well. We'll be in touch!" Briglio wrote back.

Kimco representatives have not responded to requests for comment on this news story.

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