Basalt Whole Foods construction shelved until spring
BASALT, Colorado ” Construction is shelved until spring on the Whole Foods Market building in Basalt because of the national credit crunch, a representative of the developer said Wednesday.
Tim Belinski, vice president of development for Joseph Freed and Associates (JFA), said the firm needs to line up financing before it can resume work, and that will take a few months.
“We want to start as soon as we can but suspect it will be next spring,” Belinski said.
Construction stopped on Labor Day weekend at the highly visible site at the Willits Town Center along Highway 82. Crews had excavated for an underground parking garage and poured the concrete foundation before the abrupt halt.
Belinski held out hope of resuming work this fall, but an ominous sign emerged last week when a towering boom on a crane at the site was dismantled. The firm that owns the crane is moving it to another site, Belinski said.
The construction delay will require JFA to extend its contract with Whole Foods. The developer had a June 2009 deadline to turn over the shell of the building. The grocery chain’s own crew will finish the interior. That deadline won’t be met, so JFA needs an extension.
Renegotiation of the Basalt lease comes at a time when Whole Foods is curbing its aggressive national expansion plans. The chain terminated eight leases for proposed stores and downsized plans for three additional stores during the fourth quarter of its fiscal year, which ended Oct. 31. The three stores were downsized by an average of 17,000 square feet each, according to a earnings report posted on Whole Foods’ website. The Nov. 5 report didn’t identify which proposed stores were eliminated or shrunk.
Despite those recent actions, the chain is still developing new stores. It is honoring many of the leases it signed before the national economic crisis took a turn for the worse this year. Eight new stores opened in the fourth quarter, and several more are planned through fiscal 2012.
Belinski said Whole Foods officials have assured him the company remains committed to the Basalt project. When contacted Wednesday by The Aspen Times, a spokeswoman for the grocery chain was more vague in an assessment of the project.
“We don’t have any new news on the Basalt store but if we do, we’ll definitely share it with you,” Cathy Cochran-Lewis of Whole Foods wrote in an e-mail.
The Basalt store remains designated as “in development” on the Whole Foods website.
Belinski declined comment when asked if the supermarket’s space could be decreased if the lease is extended and negotiations are reopened. “We know we’re building a 44,000-square-foot building,” he said.
Whole Foods will be on the ground floor with a footprint of 44,000 square feet. Affordable housing will be constructed on two additional floors.
The footprint of the building was initially 27,500 square feet. JFA officials and Michael Lipkin, the original developer, earned approval from the Basalt Town Council to increase the footprint size to 44,000 square feet. They reasoned that Whole Foods needed a larger space to make the economics work in the Roaring Fork Valley. Now, as economic conditions have changed, the grocery chain appears to favor smaller spaces.
Whole Foods watched its sales sag this year as people cut spending on pricey organic and natural foods. The fourth quarter was one of the worst ever for the company. Same-store sales growth slowed in the company’s fiscal fourth quarter to 0.4 percent, and profit dropped 96 percent from the same time last year to $1.5 million, according to its quarterly earnings report.
However, analysts in numerous newspaper reports have said the company isn’t in trouble financially. A private equity firm bought a $425 million stake in Whole Foods earlier this month ” brightening prospects for weathering the tough economic times.
Belinski remained upbeat about his firm’s prospects for finishing the Whole Foods building. He acknowledged that it is tough to get loans right now, but the climate shows signs of changing.
“I sense the banking community is beginning to be more confident, especially with quality projects,” Belinski said.