Home Depot takes over Kmart lease

Posted: Friday, June 20, 2003

KENAI (AP) Home Depot U.S.A. has finalized an agreement with Kmart Corp. that will bring one of the orange home improvement retail warehouse stores to the Kenai Peninsula.

Home Depot is taking over the lease of the building that once housed Big Kmart.

Kenai Mayor John Williams said the arrival of Home Depot is a good sign.

''I think this bodes very well for the community,'' Williams said. ''It will lend itself toward developing a new kind of economy. It will definitely be a help for the city.''

Once open, the new store should bring an economic boost to both the city of Kenai, which lost annual sales tax revenue of about $800,000 when Big Kmart closed, and to the Kenai Peninsula Borough, which received approximately $400,000 from the store's sales taxes.

The arrival of Home Depot could help Kenai cope with the loss of more than $226,000 of state dollars after Gov. Frank Murkowski vetoed funding for the Revenue Sharing and Safe Communities programs.

Beyond tax dollars, the store will create as many as 120 jobs including skilled positions requiring such expertise as carpentry, masonry or plumbing, for example with between a $4 million and $4.5 million annual payroll.

''That will help offset some of the job losses the city has suffered,'' Williams said, referring to unemployment created by Big Kmart's closing and layoffs from Agrium, Unocal and the Kenai Peninsula Borough School District. ''And because of some of the people that will go to work, it will fill up some of the vacancies in apartments around the city.''

Following Big Kmart's closing in March, the building was placed under the jurisdiction of the federal bankruptcy court in Chicago. In April, the court granted Home Depot permission to assume the lease, and the company took a 30-day lease on May 5, followed by a subsequent extension, to inspect the location and determine what changes would be in order.

Anticipated architectural and engineering reworks include raising the roof to accommodate the warehouse store's ''high-stack'' method of holding and displaying products, and putting in a heavier floor to support heavier merchandise.

Home Depot spokesperson John Simley said the company never had any doubts that it wanted to be in Kenai.

''Now, at some point (the building) has to stop looking like a Kmart and start looking like a Home Depot,'' he said.

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