Legacy Lakewood retail site closing. What’s next for Tacoma Discount World property?

A familiar Lakewood retail hub has new owners and what appears to be a new direction.

As recently as 2021, the site that includes Tacoma Discount World, 11013 Pacific Highway SW, had been considered for a multifamily housing development, according to city officials and online permitting records.

Today, new owners are marketing the property as a potential neighborhood fulfillment center.

The site, which is along Interstate 5, sold in May 2022 for $17.7 million to an LLC representing Sterling Consumer Logistics Properties, a real estate fund managed by the Sterling Organization, based in West Palm Beach, Florida. The seller was an LLC affiliated with members of the Seattle family behind the Diamond Parking company.

Also in May, representatives for the new owner filed an application for determination “concerning permissibility of neighborhood fulfillment center land use.”

Sterling’s website markets the Discount World site as “well positioned for an adaptive reuse into a Neighborhood Fulfillment Center.”

The marketing notes “the former Costco building structure offers a large, open floor plate with sufficient clear heights, while also providing for an ample parking field (minimal building to land coverage), both of which should serve as a premium for potential occupiers in the land-constrained Seattle (Metropolitan Statistical Area.)“

Media representatives for Sterling Organization did not respond to request for comment from The News Tribune. The site’s property manager and leasing agent also did not respond.

Meanwhile, various Discount World businesses have told customers the venue is ending its run as home to vendors at the end of April.

Top Ten Fashion, a Discount World vendor, posted on social media a flyer announcing its move to 2410 84th St. S. at the Lakewood Cinema Plaza as of May 1.

Lee’s Dream Boutique owner Sandra Benitez told The News Tribune this week she didn’t know where she would relocate her business. Benitez said the Discount World vendors work in cooperation with each other like family.

“It works because everybody helps everybody. This is very bad news for everybody,” she said. “And it’s very hard for us to keep our business alive.”

She’s handing out business cards to stay in contact with customers ahead of finding a new location.

Lakewood city spokesperson Brynn Grimley told The News Tribune this week that city officials had not received any requests from business owners for relocation assistance.

The city doesn’t have any formal program to help in such instances, she added. However, “we certainly do our best to try and help keep businesses in Lakewood, and would offer that assistance where it might be applicable.”

Sterling’s marketing brochure includes the neighboring O’Reilly Auto Parts store parcel, which the Sterling affiliated LLC also acquired in its purchase of the 9.82-acre site.

An O’Reilly store representative told The News Tribune that the store had been informed of upcoming changes to the onsite parking configuration, but the property owner had not shared any other changes or mention any fulfillment center plans.

The representative added that the auto parts store would remain open at its present location.

Previous plans for housing

Before the latest neighborhood fulfillment center plans, the site was to play a key part in an ambitious redevelopment project in Lakewood.

Architecture firm Johnson Braund in August 2021 filed what was described in Pierce County online permitting documents as a “prescreening sewer plan triage for demolition of existing stores and impervious surfaces. Construction of various multifamily buildings, parking, and utility improvements.”

A September 2021 filing from Johnson Braund proposed 530 apartment units in 12 buildings encompassing 11011 – 10915 and 11021 Pacific Highway SW, along with site demolition.

Sewer connection charges for the project were estimated at the time at more than $2 million, according to information in the filing.

Those plans never came to fruition, and new owners came on the scene in 2022.

Becky Newton, economic development manager for the city of Lakewood, told The News Tribune via email that Lakewood “previously was working with a broker to reach out to developers to attract a mixed-used project for this site. The project would have included affordable housing.”

The work was part of a potential 30-acre redevelopment proposal known as Lakewood Landing, planned for the city’s Station District.

The total 30-acre site is on Pacific Highway between its intersection with state Route 512 and Bridgeport Way SW.

“The city’s vision for this property is to create a mixed-use development, rich in amenities for residents, businesses and the surrounding neighborhoods,” according to the Lakewood project website.

The city, in its book about Lakewood Landing for developers, said at the time, “The result of Lakewood Landing as an architectural, urban design landmark will set the bar for new development in Lakewood and thus, requires a developer befit for such a standard.”

The News Tribune reported on the project in February 2021, describing Phase 1 as focusing on property adjacent to the Lakewood Sounder Station, “which could add 760 housing units and 87,000 square feet of retail and office space with a courtyard.”

“The city’s site design includes an entertainment center, Amazon pick-up lockers and a brewery, but the private developer would make final decisions about how the area is developed,” The News Tribune reported at the time.

According to Newton, “There was some interest in residential development, however, due to land use issues, residential developers opted to focus on other areas within Lakewood over this site.”

She added, “Consequently, an e-commerce developer purchased the property. We understand that the existing building will be repurposed for a fulfillment center.”

Site history

The site has a long history of offering warehouse-type discount retail in the area from the 1960s onward.

The building dates back to the early 1960s and was known as home to Gov-Mart/Baza’r Foods, which started as Gov-Mart, a membership discount department store launched by Joe Diamond.

According to Tacoma Public Library and News Tribune archives, Gov-Mart initially was open to government workers, school district employees and members of the armed forces and labor unions and later opened to the general public. Archival information described it as “a discount department store located in a warehouse setting.”

Its October 1964 “grand reopening” saw a remodeled store, expanded by 100,000 square feet, with the new name of Gov-Mart/Baza’r, open to the general public. An estimated 20,000 people attended its reopening.

It later became home to Fred Meyer. After a fire destroyed a portion of the site, it was rebuilt and served as home to Costco until the early 1990s.

In October 1991, News Tribune archives show Costco announced plans to replace the Lakewood warehouse store with its 38th Street site in Tacoma.

In 1995, the property was briefly considered by county officials for conversion into a temporary jail to hold 500-600 low-risk inmates. The plan was seen as a way to ease overcrowding until a new, permanent jail was built, according to News Tribune archives.

That proposal was opposed by Tacoma Discount World’s parent company, which subleased at that time from Costco, and the plan was abandoned.

Tacoma Discount World has carried on the tradition of discount offerings in a warehouse-type setting, with different vendors selling a variety of items, such as bridal attire and prom dresses, as well as jewelry, shoes and more.

In various recent social media posts, customers expressed melancholy over the site’s impending overhaul.

“I have spent way over $2,000 in there for my four girls’ dresses over the years they were in HS,” wrote one.

“First the swap meet now this; man my whole childhood gone,” wrote another.

The Star-Lite Swap Meet on South Tacoma Way, located at a former drive-in, was demolished in 2019 and redeveloped into the Starlite Distribution Center. The distribution center was sold in October 2020 for $39.5 million.

Others this week lamented the loss this year of another longtime Lakewood business.

Sizzler, 10204 S. Tacoma Way in Lakewood, announced its closure with a posting at the restaurant marking the end of its run after 45 years. Its final day of operation is Jan. 20.

The Lakewood restaurant had suffered damage in February 2022 when a car crashed through the window.

The Sizzler chain itself filed for Chapter 11 bankruptcy in September 2020, citing COVID-19 pandemic sales losses.

Meanwhile, dramatic changes to longtime fixtures in Lakewood are stacking up, including the 2022 closure of the city’s library building.

Newton noted the value of the Tacoma Discount World location as it related to the city’s hopes for the Lakewood Landing proposal.

“The city was looking at this property for many years and saw its potential to create a major retail center, outlet mall or lifestyle mall with its proximity to Interstate 5 and Sound Transit,” she wrote.

“But as is the case with private land ownership, there is only so much we can do to try to encourage the type of development we think would be the best fit for our city/community.”