Nordstrom Rack eyes Dillon location in vacant retail space left by Bed, Bath & Beyond thanks to tax incentive

The Bed, Bath & Beyond location in Dillon closed in 2023, and the empty building still bears the now online-only retailer’s logo more than two years later. The Dillon Town Council approved an economic development agreement on Tuesday, Sept. 23, though, that could help the building find a new tenant. 

Nordstrom Inc. intends to place one of its Nordstrom Rack locations in the building, according to the agreement. The department stores are sister locations of the Nordstrom chain and carry discounted goods.

Town manager Nathan Johnson explained the agreement to the council, saying town staff has been working with Nordstrom Inc. and the building’s landlord to fill the space. Johnson said the company asked the town for additional revenue to help put in a Nordstrom Rack.

The agreement will have the town remit 50% of the sales tax Nordstrom Rack generates to its parent company for 10 years or until the total rebates reach $950,000.

John Loss, the executive vice president of Miller United, the company that owns the shopping center where Nordstrom Rack would open, said his company and Nordstrom Inc. are currently working on a lease agreement. He said Nordstrom Rack coming to Dillon Ridge Marketplace is not finalized until the lease is signed.

“We are excited to be working with Nordstrom Rack to enter into a lease to have them become tenants at Dillon Ridge Marketplace,” Loss said.

Johnson told the council about other similar economic development agreements the town has signed. He said the town has agreements with Bistro North, Christy Sports, Homewood Suites and Panera Bread to remit sales taxes those businesses generate to the companies. The percentages, expiry dates and maximum rebate sums vary.

The Nordstrom agreement has the highest maximum rebate sum of the ones Johnson cited, with Bistro North’s $780,000 maximum being the closest. He said Nordstrom Inc. will use the money to help pay off “sizable improvements” needed in the building.

“It’s been vacant for two years,” Johnson said. “It needs a new roof. It needs new HVAC. It needs some interior finishes.”

Johnson also said the company would do facade improvements, move the restrooms to the back of the store and potentially add windows to bring in more natural light.

Nordstrom Rack would aim to open in the fourth quarter of 2026, Johnson said. Council member Barbara Richard asked how long REI took to renovate its space before opening. Johnson and public works director Scott O’Brien said that sort of renovation typically takes a year to a year and a half.

Mayor Carolyn Skowyra said it seemed like the REI renovations did not take that long, but she was not concerned about the Nordstrom Rack timeline.

“There’s no revenue until something goes in there,” Skowyra said. “If this is the way to get something in there, you know, it’s better late than never.”

Loss said the property owners have had companies interested in filling the vacant space since Bed, Bath & Beyond closed.

“We have, fortunately, deferred or not moved forward with (them) in order to ultimately secure what we think to be a premium tenant for the Town of Dillon and the whole trade area,” Loss said.

Council member Kyle Hendricks ended the council’s discussion by agreeing with Skowyra that “it will be great to have someone in there.” The council unanimously approved the resolution for the town to enter into the economic development agreement.