FALMOUTH, Maine — Almost two years after receiving the town’s approval to expand its store on U.S. Route 1, Wal-Mart has dropped the plan.
Wal-Mart spokesman Bill Wertz on Tuesday said the company has told the town it will not proceed with plans to expand the 92,000-square-foot store at 206 Route 1 into a 124,000-square-foot Supercenter.
“Construction costs were higher than anticipated and we made the business decision not to move ahead,” Wertz said. He declined to disclose the specific expenses that led to the decision.
Wertz also declined to discuss whether Wal-Mart has plans to renovate the existing store.
The expansion would have required tearing down the former Regal Cinemas, which closed in April 2012 in anticipation of the expansion. The expanded store would have included a full grocery store, pharmacy and large garden section.
Property manager Holly Malloy, vice president of G.L. Rogers & Co., said Wal-Mart now leases the entire building on the Falmouth Plaza property, including the former movie theater. But she declined to provide details of the lease and what might happen after it expires.
Wal-Mart was granted permission in 2010 to expand the store. But after waiting too long to begin, the company was forced to go to the Planning Board again and ask for an extension, which was granted.
Last fall, the town essentially banned big-box retailers, restricting stores to a maximum of 60,000 square feet. But because Wal-Mart was already working on expansion plans, an exception was made for the store, giving the company until Nov. 1 to file the appropriate paperwork and pay inspection fees.
“After the deadline, Wal-Mart will no longer be able to expand the store,” Community Development Director Amanda Stearns said, noting that only renovations would be allowed under the existing ordinance.
Town Councilor Russ Anderson, head of the Community Development Committee, said he is disappointed by the Arkansas-based company’s decision.
“It was a bit of a surprise, but on the other hand, the fact no progress had been made, you had to wonder,” Anderson said. “I think Wal-Mart would have served the town well and created jobs in Falmouth.”
He said the failure of the project to go forward is not a reflection of whether Falmouth is friendly to businesses.
“The town was very accommodating to Wal-Mart when it announced the plan to go forward with the expansion,” Anderson said. “… In the short-term, it’s a disappointment. In the long term it will open up space for other stores to use and lease, and with the new Route 1 zoning changes coming, I’m hoping that we’ll have new tenants and business in that space.”
Former Councilor Bonny Rodden, who advocated for the town’s Route 1 redevelopment plan and the big-box retail limits, said her primary disappointment is the loss of the movie theater.
“I don’t think anybody would pay attention to this if we didn’t lose the theater,” Rodden said. “I don’t think anybody is clamoring for a bigger Wal-Mart.”
Rodden said one of the reasons she advocated for the big-box ban was that the town’s research showed corporate retailers were trending toward building relatively smaller stores in areas like Falmouth, not massive, warehouse-style buildings.
“We said, ‘why should we be encouraging larger chains that are going to have these huge stores that fail? Then what are we going to do with them?’” she said. “It’s just too bad (Wal-Mart) didn’t make the decision before we lost the theater.”
After the theater closed, Falmouth resident Ben Devine, a minority owner of the Falmouth Plaza and owner of the nearby Falmouth Shopping Center, said at the time that new cinemas in the area siphoned movie-goers away from Falmouth, expediting the theater’s demise.
The collapse of the Wal-Mart expansion creates conspicuous vacancies at both of Falmouth’s large Route 1 retail centers: the plaza and the shopping center, which is anchored by a Shaw’s supermarket.
While those vacancies amount to a large amount of retail space, Theo Holtwijk, the town’s director of long-range planning, said the empty properties do not pose a threat to the tax increment financing used to fund an $11.7 million Route 1 South redesign bond recently approved by voters.
Holtwijk said the town anticipates the Route 1 South TIF District account will generate sufficient revenues to cover the borrowing costs associated with the redesign, without increasing the property tax rate. He said the projection is based on a conservative estimate for development, and that the Wal-Mart expansion was not factored into the calculations.
Only part of the Shaw’s shopping center building is included in the TIF, Holtwijk said.
Although no paperwork has been filed for the district, Holtwijk said the town expects some development work could begin as soon as this fall.