Advertisement
  1. Business

How a closed Tampa Sam's Club became a strategic weapon to compete with Amazon

The Sam’s Club eCommerce fulfillment center at 5135 S Dale Mabry Highway was a regular Sam’s Club until it was closed in January 2018. In September it reopened as the distribution center, sans any branding or logos on the outside of the building. (SARA DINATALE | TIMES)
Published Apr. 1

TAMPA — A shuttered Sam's Club near the Gandy Bridge might just be the future of retail.

Since closing its doors in January 2018, the store has been reborn into a kind of mini-Amazon that is still serving Sam's Club customers. Not that any shopper would know by looking: The outside of the building is barren, free of any branding or logos.

Inside, there are no cashiers at registers. Instead there are workers sorting packages, surrounded by a conveyor belt system and individual shipping workstations. Sam's Club, which is owned by Walmart, calls it an "eCommerce fulfillment center." Workers are tasked with quickly processing orders to send to shoppers' homes.

Some experts think such hubs will only grow in popularity — potentially taking over the very spaces left behind by retailers that struggled to adapt.

"There's a big shift," said Ed Miller, a Tampa broker with Colliers International. "Industrial is the new retail."

The online-focused hubs are a new frontier, part of a larger urban infill movement to reuse existing structures rather than create new ones. Already in Tampa, University Mall is on its way to becoming the "Uptown District." Its developers plan to turn the old Sears and JCPenney spaces into offices or research labs.

While adaptive reuse is in vogue, Miller said retailers, brokers and developers are still figuring out how "eCommerce" will fit. The pressure to adapt is on, as Amazon leads online retail with the promises of two-day shipping and Prime Now delivery in as little as an hour.

Miller, whose expertise is in industrial leasing, poses it this way: Who wants to wait a week for something they can get in a day?

What's resulting is the creation of facilities that are not quite warehouses, but not standard retail stores, either.

"This location in Tampa supports our omni-channel shopping experience by shipping items directly to members as orders are placed," Sam's Club said in a statement. "We are also testing … opening a portion of the eCommerce fulfillment center to members to shop a curated assortment of our most popular items using Scan & Go."

That would mean shoppers could use the store's app to check themselves out without having to wait in line. Right now, the delivery center in Tampa isn't open to the public.

The once typical Sam's Club is near a new housing development and shares a parking lot with a bustling Home Depot and a Regions Bank.

Sam's Club first announced it would be closing 63 locations nationally, including the store at 5135 S Dale Mabry Highway, in January 2018. It also said up to 12 of those locations would be made into delivery hubs. The details were unclear. Largely, they still are.

The first of Sam's new online order centers opened with a ribbon-cutting in Memphis, Tenn. in June. Later that month, Sam's Club filed plans with the city of Tampa's planning and development office to retrofit the location at S Dale Mabry. It opened in September. At least one other location has been repurposed in Matteson, Ill., a village 30 miles outside Chicago.

The facilities benefit Sam's Club "Plus" members who, similar to Amazon Prime members, get faster and free shipping. The centers stock items that are the most popular and most likely to be ordered.

Developers are intrigued by the mixed-use retail and distribution hubs and are interested in investing in properties that could have such a use, according to Miller.

"But they're difficult to find," he said. "You can't just put one of these centers down anywhere."

The Tampa Sam's Club is owned by its parent company, Walmart. It had been running as a typical Sam's Club for 18 years before it closed. Its location by the Gandy Bridge, however, makes it a perfect distribution point. Drivers expected to complete fast shipping times are able to bypass at least some traffic across the bay to Pinellas County while still being in Tampa to complete deliveries throughout Hillsborough County.

Sam's Club, already a warehouse-style store with docks, storage and lot of space, makes flipping it into a distribution center simple from a construction standpoint, Miller said.

On a recent weekday afternoon, the new center was mostly quiet. Large trailers with Walmart and FedEx printed on the outside sat at the docks to be unloaded. The parking lot was scattered with just more than a dozen cars.

But not all the new center's neighbors support the change. GF Properties, the owner of the nearby townhomes, filed a lawsuit against Sam's Club last month.

The reason? An agreement among all the properties dating to 1998 that defined what Sam's Club could act as — essentially, only as a first-class shopping center. Despite amendments made over the years to the agreement, the expectation Sam's would remain a shopping center, not a distribution center, never changed, the lawsuit says.

GF Properties' founder and managing partner, Bob Gries, and his attorneys argue the delivery hub doesn't match that set definition.

"In our opinion, Sam's has breached the agreement," Gries said. "It has been unfortunate but necessary to go to court over the matter. There's a requirement in the agreement to operate as a retail operation, which it has now elected not to do."

Sam's Club said in a statement it does not comment on pending litigation.

It is likely similar discrepancies to Gries' case will pop up if other retailers follow Sam's Club lead by turning old retail buildings into online order hubs. The retail industry has transformed faster than the property and legal language used to describe and sanction it.

Bob McDonaugh, Tampa's administrator of economic opportunity, said the retailer worked with the city to ensure it wasn't breaking any land-use rules. Records show the city approved the redevelopment plans in August of 2018.

"One of the things we look at is intensity," said McDonaugh. "Is there going to be more truck traffic, more cars? In this specific case, the intensity is down. We saw no impacts on adjacent neighbors."

The city is mostly seeing conversion of old retail stores into offices, McDonaugh said. He also said he was not aware of any existing land-use ordinances or zoning laws that would even recognize the Sam's Club as a hybrid center encompassing elements of traditional retail, a warehouse and online sales and delivery.

"We're in a changing world," he said.

Contact Sara DiNatale at sdinatale@tampabay.com. Follow @sara_dinatale.

ALSO IN THIS SECTION

  1. The Southernmost Point marker in Key West. CAROL TEDESCO  |  AP
    The travel website put the Florida Keys on its list of places not to visit.
  2. Philanthropist David Straz Jr. and his wife Catherine celebrate in March after he advanced into the Tampa mayoral run-off election. Mr. Straz has died at the age of 77. TAILYR IRVINE  |  Times
    The former mayoral candidate who lost to Tampa Mayor Jane Castor earlier this year, died Monday while on a fishing trip in Homosassa. His name, and legacy, are integral to Tampa.
  3. The Chick-fil-A on Dale Mabry in South Tampa. The company announced Monday it will no longer donate to The Salvation Army and the Fellowship of Christian Athletes.
    The groups have faced criticism for their opposition to same-sex marriage.
  4. Candice Anderson, left, and Alsace Walentine, co-owners of Tombolo Books, rearrange books as attendees of the Times Festival of Reading leave the University Student Center behind them. [Jack Evans | Times]
    The shop plans to open next to Black Crow on First Ave. S before the new year.
  5. An opened capsule containing Kratom. The Clearwater City Council was confronted by dozens of concerned citizens at a recent meeting who urged them not to ban the herbal supplement. Times
    “Our recommendation right now is, we don’t think there’s a need to regulate it.”
  6. BayCare Health Systems now plans to build a $200 million, 60-bed hospital along Bruce B. Downs Boulevard. The company previously planned to build on 111 acres further north adjacent to Interstate 75 and an interchange to built at Overpass Road. Shown his the main entrance to BayCare's St. Joseph's Hospital North on Van Dyke Road in Lutz. Times
    BayCare plans a $200 million, 60-bed hospital on land it owns along Bruce B. Downs Boulevard
  7. Damian J. Fernandez, center, is introduced Monday as the new president of Eckerd College. He will succeed longtime president Donald R. Eastman III on July 1. SCOTT KEELER  |  Tampa Bay Times
    Damian Fernandez, 62, will succeed president Donald R. Eastman III, who steps down June 30 after leading the school for 19 years.
  8. [Getty Images] FLUXFACTORY  |  Getty Images
    Under the circumstances spelled out here, the advice columnist says Mom has few desirable options.
  9. Dusty Hill (left) and Billy Gibbons (right) from ZZ Top perform prior to Tom Petty & the Heartbreakers at the St. Pete Times Forum in 2010. A ZZ Top concert in 2018 was the subject of a scathing Clearwater city audit of the Parks and Recreation Special Events division. KEVIN HOWE  |  Times archives
    The Parks and Recreation Department failed to keep sales receipts, invoices and other records of a 2018 concert.
  10. Dade City wants to put its planned bicycle hub in a city park near Church and Eighth streets adjoining the trailhead of the Roy Hardy Trail. The land already has been designated as the future home of a splash pad. Dade City
    A planned welcome center for cycling enthusiasts originally had been slated for a historic train depot
Advertisement
Advertisement
Advertisement