The Kmart in Santa Fe may be closing in December, but what will happen with the building at St. Michael’s Village remains unknown.
Kmart has leased the 94,829-square-foot store since arriving in Santa Fe in 1976.
Under terms of the lease, Kmart would have to continue lease payments, paying utilities and maintaining an empty building, said Doug Roberts of dRoberts Realty, who represents St. Michael’s Village.
He said Kmart may want to buy its way out of the lease — or have St. Michael’s Village owner Nydes Properties buy Kmart out.
“Kmart will say this is a very valuable property,” Roberts said. “Who’s going to bend first?”
A spokesman for Kmart declined comment last week.
The wild card in the equation is the St. Michael’s Drive corridor. It is part of the city’s Midtown Local Innovation Corridor and is a state Opportunity Zone, both of which offer incentives for redevelopment — especially for higher density, multifamily housing and complementary commercial uses.
“[Kmart and St. Michael’s Village] would make a great redevelopment project for what the city would like to see in that area,” Roberts said. “[Demolition] is what the city would like to see.”