Officials: Vacancy of Ingles' Properties Stymies Economic Development

The supermarket chain's practice of holding empty stores, highlighted in a recent story by Asheville Watchdog, has an especially big impact in land-starved Transylvania County.

Former Kmart building that is owned by Ingles Market and has stood empty since 2016

BREVARD — Local business owner Nick Friedman, standing in the parking lot of Brevard’s Ingles Market, was asked to consider the long-term vacancy of the former Kmart next door.

Noting a Realtor’s sign in the old store’s window advertising it as “available,” he said, “I’m sure that if somebody had the money, Ingles would be happy to lease it.”

Or, maybe not.

Some of the longstanding questions about vacant properties in Transylvania County controlled by Ingles Markets or related companies — including the old Kmart and Bi-Lo stores — were answered in a detailed story published earlier this week in Asheville Watchdog.

The gist: The company’s business is about real estate almost as much as it is about groceries.

Unlike many supermarket chains, the story continued, Ingles tends to own rather than lease the homes of its stores. And, most relevant to its operations in  Transylvania, it has established a pattern of holding on to vacant properties.

This not-uncommon practice is likely intended, at least in part, to prevent the encroachment of rivals, industry experts said. Certainly, according to Watchdog, it “stymies development.”

Besides generating a total of about $6 billion in sales last year at 198 stores across the Southeast, Watchdog reported, Black Mountain-based Ingles and related companies own 76 parcels appraised for tax purposes at $272 million in Buncombe County alone. Some of its buildings, the story said, had been vacant for decades.

In Transylvania, the company owns its Brevard store and the adjacent 95,000-square-foot old Kmart, which closed in 2016. These stores were built on land the company bought from Brevard College in 1989 for $1 million, property records show, and its current holdings there are appraised at $10.3 million.

In 2021, Ingles Forest Gate Associates LLC bought the parcel that includes the 37,000-square foot old Bi-Lo, which closed that same year. The company paid $6.25 million for the property, which is appraised at $6.7 million, records show.

Ingles also owns the land occupied by a subsidiary, discount grocer Sav-Mor Foods, on Rosman Highway west of downtown Brevard — and that includes a smaller vacant storefront.

Though dwarfed by the company’s holdings in Buncombe, these vacancies represent a significant obstacle to economic development in Transylvania, where the scarcity of developed and developable land have frequently been cited as an impediment to building affordable housing and attracting enterprise.

The shortage of commercial property in particular was recently highlighted by the announcement of plans to purchase College Plaza, a shopping center just north of downtown Brevard, which could displace more than a dozen small businesses. Several of their owners said they faced dim prospects of relocation considering the expense and scarcity of available spaces.

“Those are huge pieces of property that are not being used at all,” Brevard City Council member Aaron Baker said of Ingles’ holdings. 

“We have very little inventory and those properties are currently underutilized,” said longtime local Realtor Jeremy Owen. “From my point of view it would be valuable to see those activated.”

Another measure of the local impact of the company’s vacancies was the response to former Brevard/Transylvania Chamber of Commerce president Tad Fogel’s Facebook post earlier this week that linked to the Watchdog story.

It generated more than 100 likes and 70 comments, most of which slammed Ingles’ practice of holding on to vacancies as a dog-in-the-manager corporate strategy.

Several called it a sign of the company’s avarice or, as one poster wrote, its “GREED.” Another said the company was “making Brevard look like a ghost town. Awful.”

Though Baker’s comments in an interview were more measured, he said the vacancies concerned him enough that he asked City Attorney Mack McKeller to explore actions to address them.

The city of Mt. Airy, for example, passed an ordinance last year that requires property owners to register vacant buildings with the city. It also mandates inspections that carry the potential for fines if empty buildings show signs of deterioration.

And a 2018 blog post by a professor at the University of North Carolina Chapel Hill’s School of Government listed a variety of options for local governments to address the presence of “vacant or neglected commercial buildings.”

McKeller did look into such options, he said, “but most of the enforcement mechanisms relate to derelict properties, the properties that are run down.”

That’s an issue with Ingles’ vacant stores in some other cities and counties, whose officials talked to Watchdog about Ingles’ properties that have been neglected or even, in some cases, become hubs of vandalism and other criminal activity.

In Transylvania, on the other hand, the company’s buildings were listed in records as being in “average” or “above average” condition. And the city of Brevard’s assistant planning director, Aaron Bland, wrote in an email he was “not aware of any maintenance deficiencies” of Ingles-owned buildings.

“We would love for Ingles to put these properties to use,” McKeller said, “but as far as requiring them to,  I haven’t found any tools that would allow us to do that.”

What are the prospects that they will be put to use?

All the company’s vacant holdings in Transylvania are in Brevard, and Bland said no redevelopment plans for them had been submitted to the city.

John Spake, of Spake Real Estate — the Asheville firm listed on the sign at the old Kmart — referred questions about plans for the vacant store to Ingles’ Chief Financial Officer, Pat Jackson, who did not respond to an email requesting comment.

Burton Hodges, executive director of Transylvania Economic Alliance, said he has talked about the future of the company’s properties with Ingles representatives, though he could not share details of these discussions.

“We would love to work with Ingles or whomever controls those properties long term to help market and develop them, but my understanding is, Ingles has other plans,” he said.

Whatever those plans are, several people said they are impatient to see them realized.

Both Baker and Fogel said that the continuing vacancy of the Bi-Lo leaves residents of Pisgah Forest without convenient options for grocery shopping.

And they both imagined an alternative for the unnamed healthcare nonprofit planning to move to College Plaza. Andrew Riddle, of the development company that plans to buy and redevelop the property, did not immediately respond to a voicemail asking if he had explored Ingles-owned buildings for the project.

The large, open former Bi-Lo or Kmart might have been better suited to the organization’s needs, Baker said, and  “you have a bunch of existing tenants (of College Plaza) that wouldn’t have to be displaced.”

Which may be just one of the impacts of Ingles’ practices.

“We like to pretend the free market is going to regulate real estate prices,” Baker said. “But when you have an actor like Ingles sort of meddling in the normal flow of transactions, I think it has a lot of ripple effects that are sometimes hard to pinpoint but can be pretty far reaching.”

Email: brevardnewsbeat@gmail.com