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Halo effect for Westgate as Costco reinvigorates neighboring retail

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The refurbished Westgate Towne Center, on Secor Road north of Westgate Village, has attracted new tenants hoping to profit from Costco-generated traffic.

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IT WASN'T the Big Bang, but Costco Wholesale Corp.'s decision to anchor a redeveloped Westgate Village Shopping Center has had a positive effect on retail in the Central Avenue-Secor Road corridor in West Toledo.

"The future of Westgate was very much in question before," said Steve Serchuk, a retail specialist with the Toledo office of Signature Associates, a commercial real estate firm.

"But with this redevelopment and the entire redevelopment of Westgate, the entire Westgate area has reestablished itself as a desirable shopping destination."

When the 50-year-old Westgate shopping center began its makeover last fall, demolition sent several Westgate retailers scrambling to new sites.

Some left the retail corridor, but several sought sites nearby to retain customers and to profit, they hope, from the arrival of Costco.

Three tenants, Gen's Hallmark, Radio Shack, and H&R Block moved to a new strip center on Secor Road, in front of Elder-Beerman.

Four other tenants - Huntington Bank, Port Royal Cigars, Life Uniform, and Stone Computer - moved to the Westgate Towne Center Plaza, site of a former Food Town grocery store.

That center, once filled with strip clubs and shady bars, now has traditional businesses and lacks tenants only for two larger spaces that were occupied by the former Food Town and former F&M Distributors.

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David Field, of Ross Financial Group, the Farmington, Mich., real estate firm that owns Westgate Towne Center, said there has been interest in the remaining space, but no takers.

"I think that the retail clients are all from Missouri - they want to see that Costco's there and Costco is operating," he said.

"But I think the area is certainly improving. It's going good, but it has got a ways to go."

The area, he added, "is on its way, and Costco is a great asset to the area and a phenomenon that is going to benefit everybody."

Two new food stores have been pulled in, a deli/bakery and a Mexican fast-food franchise.

Nazih Yaghnam, owner of Organic Bliss Deli & Bakery, which opened four months ago in the Westgate Towne Center, said he knew Costco was coming. The deli had been in Claudia's Natural Food Market, but that store moved from Secor Road to Monroe Street.

"I wanted to expand my business but I had built up a clientele around this area," Mr. Yaghnam said. So, he took a chance and opened his expanded restaurant with the expectation that Costco could increase sales by 10 percent.

The new warehouse club will have an effect, because most Costco stores draw from a 25-mile radius, he said.

Still, he said, "You can only forecast and hope for the best. But I believe that the wave [of customers] is coming. Costco is going to be like a hub."

The other new business headed for the Westgate area is Del Taco, a national fast-food chain that bought the former Krispy Kreme site on Secor at Executive Parkway.

"That will be Del Taco's first franchise in Toledo, and it's part of Costco coming here," Mr. Serchuk said.

Pete Shawaker, a partner with Michael Realty Co. in Toledo, said Costco traditionally seeks undeveloped sites for its stores, and its choosing a site inside Toledo was a huge boon for the Westgate area.

"I think it is going to do a lot more for the area than Home Depot did when it came in," Mr. Shawaker said. "Home Depot draws from the neighborhood, whereas Costco will draw from the region."

When Westfield America took over Franklin Park Mall in 2002, it added a $135 million wing, which opened in 2005.

"What the Westgate owners did is definitely not the same as what Westfield did with Franklin Park, but Westgate was an old established and mature center that could have turned to decline," Mr. Shawaker said.

"Costco will invigorate the area in the same way Westfield did to the Franklin Park area when it added its new wing."

However, George Rosenbaum, a retail consultant at Leo J. Shapiro & Associates in Chicago, cautioned retailers headed for the area not to entrust their survival to traffic generated by Costco.

Costco, he said, tends to wear a typical shopper out.

"When you go into Costco, I would guess the average time spent in the store is at least an hour. By then, you've walked maybe a mile and pushed a buggy.

"You're kind of filled up with shopping and you're not going to do a lot of other shopping."

A coffee shop or fast-food restaurant might do well, he said.

"But for other retailers who could be trying to feed off the traffic, well, that's a dangerous game in my view."

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.

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