The City of Kissimmee closed on the $14 million acquisition of the Kmart and Big Lots property on W. Vine Street and plans to seek a development partner in 2025 for the 22+-acre site.

The City Commission voted unanimously in June to buy the property, which sits on three parcels and also includes a vacant lot fronting N. Thacker Avenue. Kissimmee hopes ultimately to convert the site from aged and blighted big-box stores to commercial and residential, perhaps including affordable housing, but believes a public purchase and redevelopment process is needed for that to happen.

The Kmart store has been closed since 2017. It’s 101,000 square feet. The Big Lots, which is 36,380 square feet, has a lease that expires in 2026 and generates $120,000 a year in rental income, which the city can use toward the holding costs of the property.

Big Lots filed for Chapter 11 bankruptcy protection in September and announced plans last month to close nearly 500 stores nationwide, but the Kissimmee store was not on the closure list.

The property is located in the city’s Vine Street Community Redevelopment Act district and was identified as having potential for mixed-use commercial and residential uses. The city will use Tax Increment Financing to facilitate the deal.

Former Economic Development Director Tom Tomerlin advised the commission to move forward with the purchase in June. He said the seller had received interest from other buyers who were looking to place another tenant in the space.

“So that is an important point,” he said. “Virtually all those conversations have centered on, what can we do to reuse that Kmart big box? However, the adopted redevelopment plan for Vine Street calls for wholesale redevelopment — not reutilizing that box.  Therefore, we believe the CRA is stepping in to help ensure that we do not lose the ability for this site to catalyze this NoVi (North of Vine) district on the entire Vine Street corridor.”

The city already has a conceptual plan that calls for retail mixed-use buildings and a hotel on the Vine Street frontage and multifamily residential on the northern half of the site.

City Manager Mike Steigerwald said the city would follow the same process it utilized for the Beaumont Street redevelopment, which took roughly three years to get underway from the time the city purchased the property. Skyview Companies was chosen as the master developer of the Beaumont site and recently completed the Allen Apartments, the first phase of the multiyear project.

Mayor Pro Tem Angela Eady said the Kmart property could create an opportunity for the development of more affordable housing. Last year the city and Osceola County joined forces to buy a Super 8 motel for $12 million and convert it into an affordable housing community called “The Haven.”

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