Pace already in place as 3 clubs race for N.J. sites - Pace Membership Warehouse, Paramus, New Jersey

Discount Store News, August 17, 1992

PARAMUS, N.J. -- Three major membership warehouses are striving to open clubs in this suburban New York City market--a retailing hotbed--with markedly different results.

Pace Membership Warehouse is the winner, while BJ's Wholesale Club may or may not be in the race, with Sam's Club seeking to just get to the starting gate.

The results of the three clubs' efforts denote the challenge facing all merchants looking to grow in the Northeast--the limited availability of sites, countered by the chance to recycle stores shut by bankrupt chains, along with increasing local opposition to new stores, with opponents citing environmental considerations to stop retailers.

Pace is due to open a 110,000-sq.-ft. club here in mid-October at the southeast junction of Route 4 and Route 17, two exceedingly heavily trafficked arteries. Pace has built from the two highways to the club to draw its traffic off the two highways and reduced congestion. Most other retailers have direct access along the two roads.

Pace is across from Garden State Plaza, a major regional mall anchored by Macy's, JCPenney and Nordstrom's. The site is also diagonally across from the former three-level, 340,000-sq.-ft. Alexander's that was closed as part of that retailer's liquidation.

BJ's is eyeing the Alexander's site. It informally presented building plans for refurbishing store to the Paramus Building Department late in July for preliminary review. It hasn't made a formal application and township officials said they didn't know if, or when, the wholesale club would do so. BJ's did not respond to inquiries.

Paramus officials first learned about BJ's interest in the Alexander's site when the club ran an employment ad for the store in The New York Times in June, a move that a company official at that time said was"premature."

BJ's plans call for a 140,000-sq.-ft. club on one level, with other floors to be closed off. The club would shut all entrances to the former Alexander's except the north entrance.

BJ's deal with Alexander's is reportedly for a 10-year lease at about $1 million a year, with Alexander's allowed to ask the wholesale club to leave after seven years.

BJ's agreed to the deal because it would allow quick entry into the Paramus market, a source said. The club has a store about 10 miles away in Secaucus, N.J., that is one of its top volume units.

The club three months ago suspended plans to build a store about 15 miles from Paramus in Parsippany-Troy Hills, N.J., on Route 46. Contaminated soil and resident opposition were the reported reasons.

Alexander's, meanwhile, wanted a tenant for the site quickly to retain its real estate holdings--the objective of shutting its retailing operation--while obtaining some income. If in the future the real estate market improves, it can ask BJ's to leave and redevelop the site into a regional mall, a long-time company goal.

BJ's doesn't need zoning or planning approval for its plan as it is using an existing store. The only red tape it faces is meeting building, electrical and plumbing code approval for refurbishing.

Sam's Club, however, has run into major problems as it wants to build a 164,000-sq.-ft. store on a site that currently housed the shut Faber Cement Co., which would be torn down. Sam's Club's parent, Wal-mart, field plans in July 1991 for the club, which would be built on Route 17 North between Century and Midland Avenues just south of the highway's interchange with the Garden State Parkway.

The commercially-zoned site isn't large enough for parking for Sam's Club. It has asked for a variance to use adjacent residential-zoned land--and residents have tried to stop any re-zoning.

The residents, at hearings held by the Paramus Board of Adjustments, have said the club would increase area traffic, noise and pollution. Sam's Club representatives have claimed pollution standards would be met and that constructions of sound buffers would hold down noise.

The board has held a number of hearings on the matter and more are due. Town officials wouldn't speculate as to how long the zoning hearings would go on and when the board would make a ruling.

Compounding Sam's Club's problem are other commercial projects planned for Paramus, which has heightened residential opposition.