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Zombie Kmart stalls Yorktown shopping center redevelopment

Parent company willing to let store sit vacant unless landlord meets “unrealistically high” buyout price

(LoopNet, iStock, Photo-Illustration by Steven Dilakian/The Real Deal)
(LoopNet, iStock, Photo-Illustration by Steven Dilakian/The Real Deal)

A long-vacant Kmart is playing hardball with its landlord, frustrating the proposed redevelopment of a 15-acre shopping plaza in Westchester County.

Oster Properties, owner of the Yorktown Green shopping center in downtown Yorktown Heights, aims to redevelop the 90,000-square-foot Kmart into a mixed-use building with 150 apartments. But Kmart’s parent company, Transformco, has not relinquished the roughly nine years left on its lease — though the store closed in 2019, according to the Rockland/Westchester Journal News.

Transformco “has set an unrealistically high price” for Oster to buy out its remaining lease term, Yorktown Town Supervisor Matt Slater told the Journal News, adding that, according to Oster, “Kmart has expressed its willingness to leave the property vacant long-term unless it gets its asking price.”

“We recently asked [Transformco] what their intent was regarding the [Kmart] property,” Oster COO Tim Huttleston recently told the Town Board, according to the publication. “They deflected and didn’t really give us a firm answer.”

Slater said town officials would reach out to both parties “to offer our input and assistance in encouraging a satisfactory resolution to this untenable situation.”

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Last year, Oster proposed a four-story, mixed-use building on the site of the Kmart, including 150 one- and two-bedroom apartments, underground parking, first-floor retail, a courtyard and a park.

The shopping plaza also includes a long-vacant 45,000-square-foot building that was once occupied by a Food Emporium. That space will soon be filled by specialty grocer Uncle Giuseppe’s Marketplace, the Journal News reported last month.

Kmart is dying a slow death across the country after being pulled out of bankruptcy along with Sears by Transformco. Only six locations remained open in the continental U.S. as of the end of last year, according to CNN Business.

Some Kmart properties, it seems, are refusing to go without a fight.

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[LoHud] — Holden Walter-Warner

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