This old Kmart was to be replaced. A California diabetes firm just leased it for 7 years
A San Diego company that makes insulin pumps for people with diabetes has signed a seven-year lease for an old Kmart store that a Boise development firm planned to redevelop.
But the lease does not mean developers have abandoned plans to replace the half-century-old building at the northeast corner of Americana Boulevard and Shoreline Drive. “Far from it,” said Derick O’Neill, a partner in Boise’s River Shore Development LLC.
It does mean the building will survive at least until 2027.
O’Neill says the lease will be good for his business and the neighborhood, because the company, Tandem Diabetes Care, will employ hundreds of workers whose presence will help create markets for the commercial and multifamily residential buildings that River Shore Development seeks to put up on adjacent land.
“Think employees who eat, drink and need to live places,” he said by phone.
Tandem, which is growing fast, has leased more than 94,000 square feet of the one-story building, according to a filing with the U.S. Securities and Exchange Commission. It plans to use the building for a call center, according to a planning application filed with the city.
As Tandem grows, it needs more employees to provide technical support to customers and insurance verification to physicians, company executives said last year in a conference call with stock analysts.
The company chose Boise because “Boise has a true sense of community, which aligns well with our culture and mission,” said Danielle Schuh, Tandem’s associate director of corporate real estate and facilities, in an email.
Tandem already has a temporary Boise office that opened last summer across Shoreline Drive in the same building occupied by Agri Beef Co. and River Shore Development. The new office, one block north of the Boise River, is expected to open this summer. The company plans to spend $257,000 on initial interior work, followed by unspecified major improvements.
About 50 people work at the temporary office, a number that “will more than double” when the company moves into its new home, Schuh said.
Tandem agreed to pay Ameri Shore LLC, which owns the building at 1500 Shoreline Drive, $544,000 in rent in 2020, $1.1 million in 2021 and an annual increase of 2.5% between 2022 and 2024, according to the SEC filing.
Rent will increase to $3.1 million in the final two years of the lease.
River Shore has a management and development agreement with Ameri Shore, which is managed by a Spokane lawyer.
Tandem is responsible for ongoing operating building expenses, which it estimated will total $1.5 million in the first year. The company plans to make improvements to the interior and exterior, O’Neill said. He referred a reporter to Tandem for details, but Schuh did not respond to an emailed question about them.
After the Kmart closed, the building housed part of Hewlett-Packard Co.. It was used for office space for more than a decade until last year by St. Luke’s Health System. The Boise Farmers Market operated in the building’s parking lot last year and leased the building for its indoor winter market.
“We’re excited about Tandem,” O’Neill said. “They’re a neat company, and they bring a lot of energy. We have property behind the Kmart building. While Tandem is a tenant, around them and around the area we’ll be able to redevelop. ... We’ll have our hands full.”
Tandem workers “will need a place to have lunch, or a cocktail,” he said, so River Shore has put some architects and planners to work developing concepts.
‘Boise’s next great neighborhood’
O’Neill still isn’t saying exactly what the developers plan. “We’re working on that now,” he said.
Atlanta developer Greenstone Properties had once planned to build a new baseball stadium on the property. The company later changed its mind and began pursuing another site at Whitewater Park Boulevard and Fairview Avenue.
Greenstone abandoned that plan after Mayor David Bieter, who championed the stadium, lost his re-election bid to Lauren McLean, who does not.
The stadium proposal in 2017 spurred city officials to consider an urban renewal district, and the City Council approved one in December 2018. The neighborhood mostly has missed out on Downtown’s boom. O’Neill sees an opportunity to change that.
O’Neill is one of two leaders of River Shore. He is a former CEO of United Way of Treasure Valley, a former Boise School Board member, a former head of the city Planning and Development Services Department under Bieter, and the son of Peter O’Neill, a developer himself. Father and son built Bown Crossing and other projects.
The other River Shore leader is Megan Rebholtz, of the Rebholtz family that owns Agri Beef.
“We’re creating Boise’s next great neighborhood,” River Shore’s website says in a pitch to potential tenants. “Join us.”
Boise Farmers Market might move, but not far
The Boise Farmers Market was happy with its 2019 season in the Kmart parking lot, its first there, said Tamera Cameron, interim manager.
“It was fabulous,” she said. “We had more customers, more sales, than at our old location” in a parking lot at 10th and Grove streets.
Cameron said the market is negotiating to use the parking lot again this year — its season runs from April to October — but has a Plan B to use another site across Spa Street, a short street adjoining the Kmart property to the northwest, if needed.
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Tandem’s lease means the market won’t be able to continue its indoor Saturday market in November and December, she said. “We’ll have to figure out something else for the indoor winter market,” she said.
Tandem seeks workers
Tandem says its insulin pumps’ ease of use have helped it grow in a competitive market of pump suppliers that include Medtronics, Abbott Labs and others.
In December, Tandem received FDA clearance for a diabetes management system it calls Control-IQ. It was built to work with the company’s existing t:slim X2 insulin pump and a continuous glucose monitor. The devices work together to adjust insulin to prevent high and low blood sugar.
Diabetes occurs when the pancreas cannot create or use its own insulin, which regulates blood sugar levels and is necessary for cell and tissue health. People with type 1 diabetes must have insulin delivered by injection or a pump, the Diabetes Research Foundation says. Some people with type 2 diabetes also need insulin.
Diabetes is a growing health problem that afflicts an estimated 30 million Americans, the foundation says. In 2012, the estimated cost of diagnosed diabetes in the U.S. was $245 billion.
Tandem currently lists five Boise job openings: three complaint-management associates, a customer service representative and a talent-acquisition coordinator. Schuh declined to say what Tandem’s jobs pay. She said the pay is “competitive.”
Tandem’s stock price has soared over the past year, rising from a low of $30 at the start of 2019 to a high of $74.81. It has been selling recently between between $60 and $70. The company faced near-ruin a few years ago, but fought its way back.
The Tandem lease was first reported by MassDevice, which covers the medical tech industry.
This story was originally published January 14, 2020 at 4:00 AM.
