Bealls Inc. will occupy 200,000 square feet of distribution space in a former Winn-Dixie warehouse beginning this summer, the Bradenton-based retailer's second major expansion move this year.
The lease by Bealls marks the first commitment to the shuttered Clark Road distribution center since Tampa's Meridian Development Group and a financial partner bought the building for $30 million in early 2006.
"The ability to have our operations in one facility, instead of having to break them up into multiple locations was certainly attractive to us," said Dick Judd, Bealls' chief operating officer.
The retailer's commitment comes four months after Bealls agreed to pay $10.3 million to acquire the former headquarters of Tropicana Products Inc. in east Bradenton.
The company is slated to shift about 300 workers to that four-story, 149,000-square-foot office building -- built for $33 million in 2002 -- by the end of June, Judd said.
The Meridian transaction will add space and capacity to Bealls distribution network, which will remain anchored in Bradenton.
Neither Bealls nor Meridian officials would discuss terms of the lease, which is expected to cost the chain roughly $1 million annually, based on market rates.
But the Clark Road building will allow Bealls, which operates about 560 department and outlet stores and generates more than $1 billion in annual sales, better and quicker access to points south via Interstate 75.
"Time spent on the road is costly," said Jon Kleiber, a partner in the Kleiber DeVito Real Estate Group Inc., a Sarasota brokerage firm that specializes in industrial real estate.
Meridian's founder said the lease by Bealls represents a "complete vindication" of the company's decision to acquire the vacant Winn-Dixie center in January 2006.
The troubled grocery chain abandoned the nearly 1-million-square-foot warehouse and laid off 300 workers in 2004 as part of a corporate restructuring.
"This is a Class A facility, and we knew it would be a great opportunity for a local, regional or even national tenant to take advantage of," said Steven Kossoff, the founder and managing director of Meridian, which owns 2.2 million square feet of industrial property valued at $100 million.
Moreover, the Bealls deal could be the first in a flurry of activity at the Meridian center.
An organic grocery distributor is awaiting final approval for $600,000 in state economic development incentives which, if approved, would result in 250 jobs and another 400,000 square feet of space being leased.
"We haven't had a lot of inventory for larger users to occupy, so it's been pretty phenomenal," said Kathy Baylis, head of the Economic Development Corp. of Sarasota County. "There's been a lot of interest in that building."
Later this month, county commissioners are set to vote on a Meridian plan to construct eight office condominium buildings totaling 145,000 square feet of Class A space on the 58-acre parcel.
Until then, Kossoff is hoping to continue building on the industrial leasing momentum.
"We feel that by the end of the year the building could be fully leased," Kossoff said.