Shopko deal in works?

April 11, 2019

Watertown and Fort Atkinson Shopko properties appear to be among 75 such locations in Midwest and Western states -- Shopko’s territory -- that two New York-based investment firms are working to purchase.

According to the Milwaukee Journal Sentinel, the bankrupt retailer’s headquarters in the Green Bay suburb of Ashwaubenon is also involved and the firms will seek to lease, redevelop or sell the properties.

Jefferson County Register of Deeds Staci Hoffman told the Daily Times Monday her office saw financial activity related to the dealings in their records department in recent days. She said it pertained to both Watertown and Fort Atkinson Shopko stores slated for closure.

“Shopko had some transactions done in the last week. Watertown’s was called ‘SMTA Shopko Portfolio I LLC’ and that was transferred after some assignment of mortgage and a warranty deed,” she said. “The reason they did this is they basically gave the property back in lieu of foreclosure. They had to get the record caught up to the mortgage holder and according to them, it was assigned to 701 S. Church St., LLC.”

Hoffman said another transaction also followed, something she described as “a mortgage assignment of lease and rents’ security agreement and fixture filing.”

That went from 701 S. Church St., LLC to Column Financial, Inc.

“So they just re-mortgaged it,” Hoffman said. “It was some banking transactions and this is nothing unusual in a situation like this.”

According to Hoffman, the same business-related procedures took place relating to the Fort Atkinson Shopko property at around the same time transactions associated with Watertown’s store occurred.

A check with the Dodge County Register of Deeds Office Monday showed no activity on the property in Beaver Dam on which a Shopko store sits.

Watertown Mayor John David expressed hope Monday for the future of his city’s site as Watertown’s Shopko store prepares for closure.

“I hope that it will be reused soon,” David said. “It is in a prime location with lots of traffic and parking. I have heard that some stores are being converted to smaller retail and commercial space. Maybe something like that will happen here.”

It was announced in early February that the curtain would close on the one-time Wisconsin-based retail giant’s Watertown store -- an outlet with deep roots in the community. The chain came into being long before the term “big-box store” was even coined. The last day for Watertown’s Shopko will be May 12.

In an announcement in mid-March, Shopko Stores said it planned to close its remaining 120 department stores by mid-June. WLUK-TV in Green Bay reported those closings will affect an additional 5,000 employees.

Shopko said it will not move forward with an auction that was scheduled. A liquidation is expected to take several more weeks and a sale is currently taking place at its Watertown store.

The retailer filed for bankruptcy protection in January, citing excessive debt and ongoing competitive pressure. It then began announcing store closings.

CEO Russ Steinhorst said in a statement, “This is not the outcome that we had hoped for when we started our restructuring efforts.”

Shopko began with its first store in Green Bay in 1962.

As a hint days might be numbered for its Watertown store, a mall anchor for many years, Shopko announced early in 2019 it would relocate its pharmacy to the Pick ’n Save across South Church Street.

Shopko has been a leading operator of general merchandise stores throughout the Central, Western and Pacific Northwest regions of the U.S.

The Journal Sentinel reported that the 75 Shopko properties across the Midwest and Western U.S. include 25 in Wisconsin. At least 14 of those have been purchased, for a total of $67 million, records posted by the state Department of Revenue show. Prices and other information on the remainder of the 11 Wisconsin parcels were not publicly available. The investors also are buying Shopko and Shopko Hometown stores in 13 other states.

The Journal Sentinel reported records show $31.3 million was paid for a single Shopko store in Racine.

“That recorded price is far above that of the other Wisconsin Shopko stores, which sold for $1.5 million to $5.6 million,” the paper said.