Kelsey Creek Shopping Center
14825-15063 Main Street | Bellevue, WA
In 1988, PMF purchased Kelsey Creek Shopping Center for $7million. This was an unlisted property brought to Nat Franklin’s attention by one of his contacts whom he had built a business relationship. The real estate was a tired, run-down shopping center with an aging Kmart (never remodeled or updated since its construction in 1966) as its anchor with 12+ years remaining on its lease paying well below market rent out of 106,200 square feet. The remaining portion of the shopping center was a two story retail/office building. It had 46,000 square feet of rental retail space on the first floor and 28,000 square feet of poor office space on the second floor. In 1990, ownership performed a minor facelift on this two-story building which included improvements to the common area in the office portion of the building. This began the process of increasing rents and re-tenanting the two story building.
PMF endeavored through the years to expand and add buildings but was constrained by a concomitant agreement which only allowed for such expansion and addition if ownership opened a culvert that ran under the parking area. This was a completely unfeasible option.
In 2002, the year Kmart declared bankruptcy and PMF was able to gain control of Kmart’s building at no cost to PMF. After numerous calls from both tenants and brokers including Costco, Target and Walmart, to name just a few, inquiring about the possibility of leasing the building. PMF ultimately executed a lease in 2002 with Costco. It was Costco’s intention of demolishing the former Kmart Building and constructing a smaller concept Costco building. Costco ultimately abandoned this concept.
In late 2009, PMF proposed a new development for the property if PMF could get the City of Bellevue to agree to work with them on alternative suggestions regarding the opening of the culvert. This was a period of difficult economic times both nationally and locally and the City of Bellevue and the local community deeply desired new economic activity. After numerous meetings with consultants, engineers, biologists and environmentalist PMF was able to come to a mutually satisfactory agreement.
PMF (under Nat and Brian Franklin’s leadership) ultimately expanded (13,000 square feet) and renovated both the inside and outside of the former Kmart Building. The two story retail/office building was also remodeled to help it match all the other new improvements. In addition, a pad building in excess of 8,200 square feet was added and a newly-created area was ground leased to Starbucks for a new store. PMF completely replaced the old worn-out culvert with a new culvert (keeping it covered) and added a new parking lot, rain garden landscaping, energy efficient lighting, and water treatment vaults.
The shopping center was completely re tenanted with both national and regional tenants on long term leases. Today, Kelsey Creek Center is a successful and thriving shopping center which continues to attract many local residences. The redevelopment significantly increased the value of the property and PMF, the City of Bellevue and the local community all achieved their desired results.