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Buyer has option on former Kmart

An “established national business” has tentatively contracted to buy the former Kmart building, according to the managing partner of the limited liability firms that own the property.

That national business is “performing due diligence,” working to close in August or September, said David Cohen, one of the principals in CF Altoona LLC and Altoona Associates LLP, who didn’t disclose the potential buyer’s name because of a confidentiality agreement.

Under the option arrangement, the potential buyer can inspect the property to ascertain its physical condition, determine whether there are environmental issues and evaluate whether the property meets its needs, Cohen said.

The agreement also provides time for the buyer to obtain the necessary permits to convert the property to its uses, he said.

The prospective purchaser is the third since Kmart shut down, according to Cohen.

“A deal should have been closed a couple of years ago,” he said.

Obstacles, however, intervened, including some related to COVID-19, he said.

“There was a lot of activity,” he said. “Then it all came to a grinding halt.”

In recent times, the ownership has subdivided what was a single 13-acre property into three lots — including two one-acre outparcels, Cohen said.

One parcel — a section of parking lot next to Plank Road, just to the right of the main access driveway, is being sold to Hutton of Chattanooga, Tenn., a real estate development firm that owns ModWash, a car wash chain, to become a ModWash location.

The other parcel, containing the former Kmart Auto Center, is the subject of a purchase letter of intent from a national franchise restaurant, Cohen said. That buyer plans to tear down and build new, he said.

Both outparcels had been under contract with restaurants that subsequently backed away due to COVID-19, Cohen said.

Cohen’s ownership group, based in Illinois, has possessed the property since 1966, according to Cohen.

Previously, it had leased the whole thing to Kmart.

Now it’s selling the pieces, because of the age of the four investors, Cohen said.

The first generation of the ownership group has died off, he said. And the second generation is no longer young, he said.

“You’re dealing with people in their 80s,” he said. “Risk averse.”

He lives in Florida, and development from such a distance would be problematic anyway, he said.

Still, the group likes the property, which is in an excellent location, he said. “I hope by the third quarter this year, there will be some economic activity there,” he said.

Mirror Staff Writer William Kibler is at 814-949-7038.

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