By Michelle Wagner | Outer Banks Voice on August 27, 2020
Lidl finally abandons plans for Nags Head store
About three years after Lidl spent $3.9 million to purchase the property and subsequently secured a site plan for a 36,000-square-foot grocery store, the five-acre site in Nags Head that was once home to Mike Kelly’s iconic Outer Banks Restaurant & Tavern is again up for sale.
Aside from the real estate sign now erected at the milepost 10.5 location along U.S. 158, the property has remained empty since the popular restaurant and nightclub officially closed its doors, with much fanfare, in December 2017. Once a prominent spot on the bypass in Nags Head, the site looks deserted and bare, and the restaurant is partially boarded up.
After purchasing the property, Lidl embarked on a long and bumpy process of trying win approval for its unique design with the town of Nags Head, with the final okay coming in the fall of 2017. However, the intentions of the German discount grocer to build the store came under increasing local scrutiny in 2018 when its site plan with the municipality expired. About that same time, industry analysts began reporting Lidl’s struggle to make a mark in the U.S. market.
Atlantic Retail, a real estate firm that has five offices on the East Coast, is listing the property and describes it as in the middle of one of Nags Head’s retail corridors and “less than one mile from Harris Teeter, TJ Maxx, Staples, PetSmart and Food Lion.” The total value of the property, according to Dare County tax records, is $3,112,200.
Lidl media relations did not respond to a Voice request for comment, however the grocer recently announced plans to open 50 stores on the East Coast by the end of 2021, including five in North Carolina. Two of those stores will be in Charlotte, along with one each in Burlington, Apex and Wilmington.
One industry expert reached by the Voice weighed in on Lidl’s attempted venture on the Outer Banks, as did the former owner, Mike Kelly, who worked closely with Lidl representatives as they worked to secure a site plan with the municipality back in 2017.
“It was a horrible idea, if you want the truth,” said strategy and supply chain consultant Brittain Ladd of the plans to open an Outer Banks location of Lidl. “The timing just isn’t good for Lidl to open a store in the Outer Banks because they need to focus on areas where they can drive more customer traffic to their store.”
He noted that what has happened at the Nags Head Lidl location isn’t uncommon. “It’s happening in locations really all over, where they have made the wrong decision and are now focused on the markets in the major metropolitan areas.”
Pointing out that Lidl had since put a new CEO in charge of U.S. operations, Ladd asserted that it was unfortunate its original U.S. team even thought of opening stores where they had selected locations.
“They have a better team in place for selecting real estate,” asserted Ladd. “So what Lidl is doing is going through all their real estate holdings and simply divesting the real estate locations where they really don’t want to open up stores, at least not for several years.”
Of Lidl’s decision to abandon plans in Nags Head and sell the property, Mike Kelly pointed to the current economic conditions as a challenge and said, “It does surprise me, and doesn’t at the same time…especially in a resort area. It’s a pretty big step to take sometimes.”
Noting that Lidl “came out of the blue” to talk to him when he put the property on the market, Kelly suggested that the distance between the Nags Head site and Lidl’s closest locations in Virginia’s Hampton Roads area and Greenville, N.C. played a role in the grocer’s decision not to move forward with plans here.
“Typically, with grocery stores…they are all a little bit closer together,” he noted.
As for the site’s future, Kelly said it’s a prime location for the right project and floated the possibility of a hotel or motel, a use that is not currently allowed in that commercial district.
“It may be something [the town] may want to explore,” Kelly said. “I’m not sure how receptive the town would be to something like that…personally, I think that Nags Head is in dire need of some shorter-term stay options.”
Kelly said he thought a hotel would create less noise and traffic than a “restaurant with a very popular late night social” atmosphere.
He added that investors interested in a property of that size typically do their homework before purchasing. “So hopefully when they make a decision to do something, they have a good project and that makes it a lot more acceptable to the community,” he concluded.
But for the time being, the property remains empty. According to Nags Head Planning Director Michael Zehner, since taking that position a year and a half ago, he’s only been in touch with Lidl representatives regarding concerns over maintenance of the property.
“Every time we’ve reached out to them to resolve issues with vegetation on the site or trash and debris, they’ve been responsive,” he said. If some other entity were to acquire the property, Zener said the new owners would typically reach out to the town to discuss any of the permitting requirements.
Responding to some rumors around town that he was interested in purchasing the property again, Kelly asserted, “Mr. Kelly is not interested in re-purchasing the site. I have a great deal of memories and most of them positive. But given my age and et cetera, it’s not worth my exposure…I’m old news anymore.”